Virtual realities: Hong Kong innovation bureau must support digital entrepreneurs

Chief Executive Leung Chun-ying dedicated almost a tenth of his otherwise lacklustre policy address to innovation and technology. The belated emphasis on applied science has created a glimmer of hope for local businesses. It follows the setting up of the Innovation and Technology Bureau late last year, after much filibustering and political bickering in the legislature. It is now time for the policy secretary in charge of this new portfolio, Nicholas Yang Wei-hsiung, to prove his worth. It remains to be seen whether he can put Hong Kong on the right track to ride the global wave of innovation and technology.

He will have to start with a more liberal science education strategy and an investment environment conducive to nurturing start-ups. For technology ventures to work, it is vital to assemble a critical mass of foreign talent and investors. Officials will have to abandon their bureaucratic mindset and come up with bold initiatives. The most effective way to achieve this is to offer substantial tax breaks and direct subsidies.

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Take Vancouver. The Canadian city was dismissed as a haven for retirees but has transformed itself into a post-production hub. It is now a world leader in 3D technology and gaming software development. To lure advanced industry players to the city, the province of British Columbia implemented a wage subsidy scheme under which the government underwrites 40 per cent of such companies’ expenses on salaries. One story of technological success in Vancouver, with a Hong Kong connection, is Digital Domain, one of many Hollywood production houses that have taken advantage of the city’s inducements, including a liberal labour policy, plus the weak Canadian dollar.

With nine Oscars to its name, Digital Domain was encouraged to set up a 300-strong operation there. Its team has a mix of professionals from Canada, India, Korea, mainland China, Taiwan and Hong Kong. The company is behind the stunning visual effects of some 250 motion pictures, including blockbusters such as Titanic, the Transformers series, The Curious Case of Benjamin Button, Iron Man 3 and Furious 7. It specialises in producing virtual reality movie sets and its innovative products are also adopted in computer games, city planning and interior design. After Digital Domain, formerly a US venture, was taken over by a Chinese businessman, it took the company only three years to get out of the red. Subsequently listed on the Hong Kong stock exchange, it is now poised to crack the Greater China market, where the potential for 3D virtual reality movies remains largely untapped.