About 90 per cent of Hong Kong's biotechnology research and development is funded by the government, according to an industry association. Hong Kong Biotechnology Association (HKBA) chairman Lo Yuk-lam said the SAR's private sector was unwilling to finance biotech businesses due to the lengthy return period. By contrast, the private sector accounted for 70 per cent of research and development spending in the United States, 80 per cent in Japan and 64 per cent in the mainland, he said. Hong Kong's investment in biotech represented only about 1 per cent of gross domestic product against 3 per cent in other developed economies, Mr Lo said. However, he stressed the figure did not include CK Life Sciences International (Holdings), which makes its debut on the Growth Enterprise Market (GEM) today. CK Life Sciences, which raised HK$2.6 billion from its initial public offering, said in its listing prospectus it would spend HK$850 million on research and development. Nevertheless, Mr Lo lamented the reluctance of other private-sector companies to invest in these areas. 'Hong Kong industry does not have an intention to invest in research and development related to high technology,' Mr Lo said yesterday at a forum on the development of biotech industries in the SAR. 'Hong Kong companies should take the initiative to create value from conventional industries or even shift to hi-tech in a bid to enhance competitiveness.' Besides funding problems, Hong Kong's small biotech companies faced major difficulties in attracting overseas experts. To facilitate industry development, he said Hong Kong and China should seek to create a cluster of biotech companies or form a consortium between government, industries and academics to conduct research. However, despite the problems, he believed the industry could achieve critical mass as early as the end of this year in terms of combined market capitalisation or the number of companies. The listing of CK Life Sciences would give a significant boost to the sector's market capitalisation. He believed the number of biotech companies in Hong Kong would increase to 100 from 60 by the end of the year. At present, 20 biotech firms were listed on the main board or GEM. 'Every week there are new biotech companies set up,' Mr Lo said. However, lack of confidence in China's protection of intellectual property rights might deter big overseas biotech firms from doing business in the SAR. Dao Heng Securities corporate finance assistant director Frankie Yan said several companies involved in medical equipment product-related businesses planned to list in Hong Kong. Pharmaceutical companies remained the most profitable in the sector, he said.