Budget gaps make IT sector vulnerable to threats

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Although the government is pouring out billions to keep Hong Kong afloat, the lack of specificity in its funding won’t benefit the IT sector in the long term.

Photo: Hong Kong by Diane Robert

The government shared its strategy to provide relief to a struggling Hong Kong through Wednesday’s budget address. Some of the standout decisions include cash handouts of HK$10,000 to permanent residents over 18 years old, a salary tax cut of 100 percent for the 2019-20 year up to HK$20,000, and various rent and domestic fee reductions for businesses and individuals.

There were also a number of measures in the address tailored to benefit the IT sector. Major highlights from this year’s budget for Innovation and Technology include: 

  • Enhancing the Technology Voucher Programme, launched in 2016 to subsidise SMEs working to implement technological services and improve their businesses.
  • Extending the coverage of the Public Sector Trial Scheme for research and development activities in Hong Kong
  • Allocating HK$40 million to providing short-term internships for STEM undergraduate and postgraduate students from local universities
  • Expanding the subsidy to support hiring more technology talent

IT Legislative Councillor Mr Charles Mok welcomes many of the budget proposals, but warns that the government did not address some key issues.

“Some IT workers might face layoffs especially those jobs with temporary contracts. The government needs to assist in the upskilling of IT workers to raise their competitiveness,” said Mok.

Mr Mok also notes that while the budget addressed relief measures for the short term, it lacked in its focus on strategies to support long-term sustainable growth in Hong Kong’s innovation and technology industry. 

“The government must continue to create market demand for innovation, generate more quality job opportunities, encourage enterprises to hire and invest in their talent, in order to support the IT sector in this challenging economic environment and stimulate growth in the sector,” says Mr Mok.

Mr Joshua Chu, ONC Lawyers’ Consultant specialising in Technology Law, encourages the government to consider solutions that go deeper than throwing money at the problem. To do so the government would need to gain an understanding of tech start-ups’ real needs.

“For example, many start-ups fail not because the idea itself fails, but because not all innovators are good businessmen. And a problem that an innovator will have when receiving money without guidance is spending it all on R&D,” he explains.

He emphasises the importance of allocating money to go toward business managerial support, as opposed to facility building.

Mr Chu concludes, “[We should] apply money with surgical purpose, stating that certain portions will go toward hiring a team of business advisors for these companies, while another portion will go to provide support to other specialists so that the FinTech sector of HK can be a true incubator for innovation.”

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