Innovative Technology Can Boost Both R&D Institutions and Enterprises
The fourth industrial revolution was said to be the catalyst for organisations to take up innovation and technology (I&T). Organisations of every size, especially enterprises are encouraged to take up relevant research and development (R&D) to increase their respective uses of I&T. Some countries may have advanced in their commercial research and development, which may have caused the start of Industrial Revolution 4.0. But for many other countries, I&T is still new, and most R&D happens only within academic institutions or labs. Thus, in line with encouraging enterprises to boost innovation and technology usage, the Hong Kong government sheds some light on how far things have come.
The New Catalyst
Businesses and enterprises are regularly encouraged to boost their innovation and technology status as it is proven that the right technology will improve productivity. Nevertheless, all new technology must go through proper research and development to ensure its suitability to the enterprise. Besides suitability, any proposed innovation and technology should become a new catalyst for the enterprise to grow. It must add value to the company, whether in the current situation or the future. As with innovation and technology, relevant R&D should also be continuous as the market may change due to technology or vice versa.
Uptake of I&T Among Enterprises
Ever since the launched of Innovation and Technology Fund in Hong Kong, many enterprises have come forward to tap into the fund. Among the main objectives of the fund, is to finance research and development of innovative technologies. The primary rule of the fund – enterprises in Hong Kong must collaborate with local R&D institutions. To date, the Mainland-Hong Kong Joint Funding Scheme has provided funding for approved R&D projects for Hong Kong and Mainland applications. For every approved project, designated R&D institution must conduct R&D in Hong Kong and the Mainland. Each location gets 50 per cent of the work. The applicants for such funding are responsible for the progress of the projects accordingly. Hence, the uptake of the R&D funds among enterprises has been progressive. With the funds made available to enterprises to work with local R&D institutions, the local R&D industry can nurture local R&D talent and improve R&D activities. Thus, encouraging enterprises to boost innovation and technology usage will bring forth the strength of Hong Kong’s R&D institutions.
Cash Rebate Scheme
Before the fund, the Hong Kong Government introduced an R&D cash rebate scheme to encourage the uptake of R&D by enterprises. The cash rebate equals to forty per cent of an enterprise’s expenditure in two types of applied R&D projects. One is where an enterprise participates in R&D projects funded by the Innovation and Technology Fund (ITF). The other type is R&D projects financed by enterprises, partnering with designated local public research institutes. The cash rebate scheme, introduced in 2010 and since have received more than one thousand applications with an approval rate of up to 90%.
R&D Tax Deduction
Enterprises conducting R&D activities outside of Hong Kong get to enjoy a 100 per cent tax deduction. But for enterprises which partners with local R&D institutions, get to enjoy an enhanced tax deduction of up to 300 per cent. The reason being is to attract more enterprises to invest in R&D in Hong Kong.