Expansion of private investment in research and development (R&D) is more critical than merely spending taxpayers' money if Hong Kong aims to build a sustainable habitat for tech firms, Secretary for Innovation and Technology Nicholas Yang Wei-hsiung said.

Think tank Our Hong Kong Foundation last week proposed a steep hike in public spending on scientific research. Citing official statistics, it said R&D expenses by the government only made up 0.4 percent of the city's GDP, while that by the private sector accounted for 0.3 percent.

The report was insightful, Yang told a media gathering on Monday which marked his first month in office. But he said his main priority was to build a sustainable business habitat by forging lasting relationships between research findings and venture capital investors.

Yang said taxpayers' money roughly accounted for 60 percent of all R&D input in Hong Kong, adding that the mainland's was about 24 percent. "If we can't reverse that ratio, it'd be difficult to sustain no matter how much we spend," he said.

An example of poor efficiency of public spending was free wireless Internet hotspots in public places. Yang said Wi-Fi.HK, a partnership with the private sector launched last August, had been proven to be more popular and much cheaper than the government's own GovWiFi hotspots.

Incentives could be offered to encourage people to convert the findings of academic papers into business proposals, Yang explained. This was necessary to generate an array of choices for potential investors.

New measures could also be devised to grow native venture capital funds. While Hong Kong was not short of capital, Yang said most investors were not ready to put their money into startups and tech firms. But he was confident a few success stories would go a long way in changing people's appetite for risk.

Yang did not reveal specific measures to achieve his goal, but assured the public his one-month-old bureau - the Innovation and Technology Bureau - was among the "most aggressive" in the race for resources to launch new initiatives in next year's Policy Address. "We must have something to show," added Yang.

kahon@chinadailyhk.com

(HK Edition 12/22/2015 page7)