Igniting Innovation: Government Funding Schemes to Promote R&D, Product and Process Innovation

Case Studies

Market Competition – Innovation

Innovation is a key driver of economic growth, societal progress and sustainable development. The Government of the Hong Kong Special Administrative Region (HKSAR) is committed to supporting R&D and fostering product and process innovation through various funding schemes. Some prominent examples under the Innovation and Technology Fund (ITF) include -

New Industrialisation Acceleration Scheme (NIAS)

Provides funding support on a 1 (Government): 2 (enterprise) matching basis for enterprises engaging in industries of strategic importance (i.e. life and health technology, artificial intelligence and data science, advanced manufacturing and new energy technologies) to set up new smart production facilities in Hong Kong
For each project, the minimum total project cost is $300 million. The enterprise has to contribute no less than $200 million and the Government will cover a maximum of one-third of the total approved project cost or $200 million, whichever is lower
Each enterprise may have a maximum of two projects approved, receiving up to $200 million in total under the NIAS

Enterprise Support Scheme (ESS)

Provides dollar-for-dollar matching funding for private companies to carry out in-house R&D projects. Maximum funding support is $10 million per approved project
As at end March 2024, the ESS Assessment Panel has assessed 762 applications, of which 220 have received support. Private companies have contributed about $712 million while the ITF about $651 million

R&D Cash Rebate Scheme (CRS)

Provides cash rebate of private companies’ eligible expenditure in R&D projects funded by the ITF, and those funded entirely by themselves conducted in partnership with designated local public research institutes
As at end March 2024, CRS benefited a total of more than 1 900 companies involving a total rebate of over $1.164 billion, while it is estimated that during the same period the private sector invested more than $2.9 billion in R&D projects

Public Sector Trial Scheme (PSTS)

Supports the production of prototypes/samples for use and/or conducting of trials in public sector organisations by, amongst others, technology companies conducting R&D activities in Hong Kong
As at end March 2024, PSTS has supported a total of 473 projects, involving a funding of about $990 million with more than 210 organisations participating in over 640 trials

New Industrialisation Funding Scheme (NIFS)

Subsidises manufacturers, on a 1 (Government): 2 (company) matching basis, to set up new smart production lines in Hong Kong. The funding ceiling is one-third of the total project cost or $15 million, whichever is lower
As at end March 2024, 38 applications have been supported by the NIFS Vetting Committee, involving 62 smart production lines. It is estimated that companies will contribute about $696 million and the ITF around $271 million

Technology Start-up Support Scheme for Universities (TSSSU)

Provides funding to six designated universities to support their teams in starting technology businesses and commercialising their R&D results
An annual funding of up to $16 million is provided to each of the six universities
As at end May 2024, a total of about $472 million has been approved to 539 start-ups under TSSSU

Research, Academic and Industry Sectors One-plus (RAISe+) Scheme

Provides funding support for university research teams to transform their R&D results into products or services for commercialisation
Encourages the industrial and commercial sectors to invest in R&D projects and share their business experience
Provides funding to, on a matching basis, at least 100 research teams from universities which have good potential to become successful start-ups to complete their projects in two stages within around five years
The total funding for the first batch of 24 projects amounts to over $1 billion

Conclusion

These funding schemes help drive the innovation and technology upgrading in our manufacturing and services industries. By leveraging these opportunities, entrepreneurs and universities can propel themselves to new heights of success that contribute to the long-term development of the HKSAR.

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