Reindustrialization, for which Hong Kong has bright prospects, is a significant part of elevating the SAR’s advantages in the Greater Bay Area. Kapila Bandara reports from Hong Kong.
A gradual, structural transformation of manufacturing, or reindustrialization, where industry marries with the digital arena of information technology, is providing fresh impetus to the Hong Kong Special Administrative Region’s economic growth while also diversifying the economy.
This technological evolution draws on research and development, as well as technologies, such as artificial intelligence, internet of things, new materials, and smart production in line with the Fourth Industrial Revolution or Industry 4.0, as opposed to the First Industrial Revolution of the 1800s with the introduction of the power loom, the Second Industrial Revolution ignited by electrification, and the Third Industrial Revolution, involving microelectronics and automation.
Besides setting up the three INNOPARKs, HKSTP connects with the entire spectrum of important partners and organizations to build up ecosystems. By positioning Hong Kong as an international gateway in the Greater Bay Area, we also aim to attract investment and help companies go global.
Yiu Hing-leung, head of reindustrialization at Hong Kong Science and Technology Parks Corp
Industry 4.0 is a concept first presented by Germany at the 2011 Hannover Messe trade fair, to use digitalization and new technologies to transform industrial manufacturing. The Chinese mainland, the United Kingdom, the United States, Italy, South Korea and Japan have also devised their own strategies.
Electronics engineer Yiu Hing-leung, an Industry 4.0 professional who is also the head of reindustrialization at Hong Kong Science and Technology Parks Corp, said initiatives outlined in the then-chief executive Carrie Lam Cheng Yuet-ngor’s 2021 policy address reflect great support for innovation and technology and will help drive the development of information and technology, and reindustrialization.
“The increase in land supply for I&T and the expansion plan for Hong Kong Science Park will further support our ecosystem and contribute to the development of the Guangdong-Hong Kong-Macao Greater Bay Area as an international I&T hub. The Northern Metropolis Development Strategy will also strengthen I&T collaboration between Hong Kong and Shenzhen. For example, a government funding scheme offers up to HK$15 million ($1.91 million) for manufacturers to set up new smart production lines in Hong Kong,” he said.
In a survey, the Hong Kong Productivity Council and the University of Hong Kong’s Business School found that 184 companies in the food, health and green technology sectors had shown interest in Industry 4.0. The companies believe that intelligent production would increase productivity, reduce costs and make their operations more flexible. Fifty-two percent of the respondents flagged interest in moving to, or extending their production lines to Hong Kong, but noted that finding talent is an issue.
Reindustrialization is occurring against the backdrop of a clamor for tax depreciation allowances or deductions for research and development by Hong Kong companies in the Greater Bay Area.
The HKPC, which offers research and development consulting, joined the Vocational Training Council and Germany’s Fraunhofer Institute for Production Technology in offering the first professional diploma program in Industry 4.0 in 2018.
Hong Kong is advocating reindustrialization in infrastructure, talent, capital, technology and scientific research; and developing advanced manufacturing. The Innovation, Technology and Industry Bureau and Innovation and Technology Commission told lawmakers last year that promoting Industry 4.0 will help identify new growth points and create quality jobs.
The Advanced Manufacturing Center in Tseung Kwan O, Hong Kong, which opened in April. The facility provides companies with comprehensive services for logistics, warehousing, prototyping, low-volume assembly and cleanroom-enabled space. (PHOTO PROVIDED TO CHINA DAILY)
Various measures
HKSTP’s role is to help accelerate the advanced manufacturing and technology-driven industry as an economic pillar by creating an infrastructure and services ecosystem for I&T both in Hong Kong and the whole Greater Bay Area.
“Besides setting up the three INNOPARKs, HKSTP connects with the entire spectrum of important partners and organizations to build up ecosystems. By positioning Hong Kong as an international gateway in the Greater Bay Area, we also aim to attract investment and help companies go global,” Yiu said.
Industrial estates in Tai Po, Tseung Kwan O, and Yuen Long have been “repositioned” as INNOPARKs to drive reindustrialization. “There are five purpose-built buildings providing critical capabilities to accelerate innovators in their journey to turn great ideas and research into innovation-driven manufacturing of impactful market-ready products,” he said.
“These facilities will serve a growing need for specialist capabilities in producing advanced high-end electronics, medical equipment and supplies, plus precision manufacturing processes and products that need to meet the highest standards in quality, safety, hygiene, and global regulations.
“Five facilities serving as critical hubs supporting related ecosystems include the Precision Manufacturing Center; Data Technology Hub; MARS Center; the Advanced Manufacturing Center which opened in April; and Microelectronics Center to open in 2024.”
These are essential to attracting talent, investment and innovation to these high-tech, high-growth sectors. “Talent, a world-class eco-system and infrastructure are the focus areas where we provide support to drive reindustrialization,” Yiu said. “Talent is Hong Kong’s innovation imperative to fuel growth in the digital economy and HKSTP adopts a strategic approach to groom the next generation of innovators. Our programs include the two-way, cross-border GBA InnoAcademy and GBA InnoExpress.
“As for the ecosystem, we are investing heavily in partnerships and collaboration to maximize the power of integration in driving cross-border, cross-industry, cross-community engagement.”
Industrial estates were repositioned as INNOPARKs for a broad purpose, Yiu said. “This is aimed at coaxing new and old industries to embrace smart, technology-driven processes. Our vision is to help industrialists and pioneers accelerate research in innovation-driven manufacturing or ‘innofacturing’ and market-ready offerings, and forge new paths for ‘innovated, designed and Made in Hong Kong’ creations. The new and transformed industries will ensure a new generation of jobs and careers because they demand skillsets in deep-tech segments, such as artificial intelligence, robotics, biotech, fintech and data analytics.”
He said the hope is to attract companies in spheres like microelectronics, health devices and medical supplies, data, creative industries, e-commerce, telecommunications and health, as well as traditional industries adopting advanced manufacturing processes such as Industry 4.0 technology and logistics.
Yiu Hing-leung, head of reindustrialization at Hong Kong Science and Technology Parks Corp. (PHOTO PROVIDED TO CHINA DAILY)
Further potential
Yiu said that INNOPARK sites at Tai Po, Tseung Kwan O, and Yuen Long are based on eight principles: output as to economic value-added contribution; investment in capital expenditure for equipment together with fit-out or building construction; high-skilled employment creation; advanced technology content or novel application in products or services; advanced process applied in the manufacturing of products or delivery of services; R&D activities and capabilities; local consumption for a stable supply chain; and sustainability in terms of business, environment or resources.
Some high-value enterprises have already relocated. “The MARS Center is fully occupied, with 11 businesses mainly focused on medical accessory resilience supplies and equipment, plus health products and precision manufacturing,” Yiu said.
Among the major tenants at MARS Center is Time Medical, which specializes in magnetic resonance imaging and plans to list in Hong Kong. It has invested between HK$90 million and HK$120 million to produce MRI equipment for infants and young children, and for breast screening. Other tenants include CATALO, Emerging Viral Diagnostics, GeneHarbor and Koln3D.
“The DT Hub is fully occupied with tenants, including NiroTech, a Hong Kong intelligent home access and safety control company that uses smart robots empowered with AI for automated assembly and quality assurance. Their data intensive operation requires data infrastructure,” Yiu said.
“The AMC has tenants that include LUMI Technology, an advanced materials company, which uses the DT Hub for data processing. It will also expand into the AMC to develop prototypes. Sanwa BioTech will also base its new manufacturing facility at AMC and that will help it to expand capacity to supply diagnostics products to Asia and world markets.”
“HKSTP is assuming a strategic approach in delivering the next generation of innovators and technology pioneers. Reindustrialization is transforming labor-intensive industries into I&T-driven industries, which will be more attractive to the youth,” said Yiu. “For an advanced economy like Hong Kong, intangibles such as technology have to be the focus as the workforce is aging and population growth is low, while land is scarce with costs rising. But what is important is to invest in technology that will make workers smarter and more efficient, and not simply work longer.”
Yiu said reindustrialization is a significant part of elevating Hong Kong’s advantages and position in the Greater Bay Area. “Hong Kong’s prospects for advanced manufacturing are bright. It has a rich legacy and inherent industrialist expertise combined with growing I&T investment.”
There is also HKSTP’s “innovation to industry” concept. “HKSTP is home to the likes of smart manufacturing unicorn, SmartMore, as well as Geek+, the global smart logistics company, which opened its global research and development center in the park last year, and OrbusNeich, a vascular medical devices maker. OrbusNeich recently filed to go public in Hong Kong.’’
Yiu said that in terms of InnoHK research clusters, the focus on artificial intelligence and robotics, and health “symbolize the types of companies we want to nurture and grow from HKSTP to INNOPARKs”.
Contact the writer at bandara@chinadailyhk.com