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HKPC Announces Key Findings of “Hong Kong AI Industry Development Study”


The Hong Kong Productivity Council (HKPC) has released the key findings of their “Hong Kong AI Industry Development Study,” which focused on the status of Hong Kong’s artificial intelligence (AI) industry development, domestic and overseas competition, and local corporate utility.

The HKSAR Government had previously stated “AI and data science” as one of the three focuses of new industrialisation development. In light of this, HKPC collaborated with the Hong Kong Institute of Economics and Business Strategy (HIEBS), HKU Business School at The University of Hong Kong to conduct the “Hong Kong AI Industry Development Study” in mid-2023 to explore the various needs, opportunities, and challenges the industry is currently facing. A total of 216 AI-related enterprises participated in the survey, and the key findings of the research are as follows:

Overview of the development of Hong Kong’s AI industry

Among the AI ​​enterprises interviewed, 25% are large companies, and 75% are small and medium enterprises (SMEs). Of these, 17% said they are developing at all three levels (basic layer, technology layer and application layer), and 22% said they intend to extend their development to other layers in the future. 55% of the companies are looking to expand their businesses into both international and local markets. In comparison, 14% and 11% of companies will choose to focus their businesses in Hong Kong and the Mainland, respectively.

Financial Overview

  • 51% of large companies stated that they are currently profitable, with 31% of overall enterprises claiming to be profitable.
  • 43% of companies report receiving funding from the HKSAR Government, while 19% received funding from venture capital/angel investors.
  • 49% of companies invested less than HK$1 million, while 21% invested between HK$1 million and HK$5 million, 6% of companies invested between HK$5 million and HK$10 million, 5% invested between HK$10 million and HK$100 million, and 4% invest over HK$100 million.

Industry Development Overview

  • 48% of companies are solely developing AI for one industry, while 16% of companies target two industries and 15% of companies target three industries at the same time.
  • 29% are developing AI for telecommunications and information technology services; 24% for medical/clinical and health equipment, health products, and pharmaceuticals; 23% for education and nurturing/training; 22% for manufacturing; and 21% for overnment organisations.
  • Main sources of income: 63% from Hong Kong, 19% from the Mainland, and 15%from overseas.

Facing a Range of Challenges

The following are the major challenges companies are facing as regards to AI:

  • Insufficient processing power. 44% of enterprises have difficulties securing enough processing power, and 71% cover the shortfalls through cloud computing services.
  • Insufficient data. 44% of companies are having difficulties collecting data, and 16% say it takes a long time to collect sufficient data. Meanwhile, 8% reported that they have no relevant data.
  • Recruitment difficulties. 49% of companies are having difficulties recruiting, and some even reduced their hires of technical talent in Hong Kong. 77% of companies reasoned that it is due to Hong Kong’s high operating costs, and 41% expressed that Hong Kong lacks relevant technical talent.

Overview of Hong Kong Enterprises’ Application of AI

To understand the overall situation of Hong Kong enterprises’ use of AI, this study has also collected additional data from 267 companies, of which 81% were SMEs and 19% were large companies, covering multiple industries, including retail and catering, personal services, and professional service industries.

Of all companies surveyed, 41% are or will be using AI, with 32% of them already applying the technology in multiple levels, such as marketing (58%), operations (44%), and internal management (33%). The average cumulative investment in AI has reached HK$830,000 For the remaining 9% of companies preparing to integrate AI technology into their business operations, their average investment budget is approximately HK$140,000.

In terms of plans to expand the use of AI, 59% of companies that have already integrated AI stated that they will further expand their AI applications and increase their investment. 61% of them are considering to expand their investment by HK$300,000, and the average expected additional investment amount is as high as HK$1.22 million.

Recommendations to Improve AI and Expand Its Use Cases

  • Construct an Asia-leading HPC centre.
  • Establish an “International Big Data Hub.
  • Formulate regulatory policies and guidelines for the development and application of AI technology.
  • Strengthen cooperation with the Greater Bay Area and other countries to improve the AI ​​and data industry, while Hong Kong focuses on developing its advantages.
  • Take the lead in promoting large-scale AI applications.
  • Empower industries in Hong Kong by upgrading and transforming with AI.
  • Develop an “International Financing Centre for AI Companies.”
  • Foster an AI talent pool.
  • Popularise AI education and accelerate the fostering of interdisciplinary “AI+ talent.”
  • Promote Hong Kong as “The Most Internationally Livable City for AI Talent.”