Virtual realities: Hong Kong innovation bureau must support digital entrepreneurs
Albert Cheng says the new Innovation and Technology Bureau should follow Vancouver’s example and offer inducements to attract tech companies and encourage start-ups
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.
Hong Kong filmmakers used to produce up to 200 movies a year in the heyday of the 1980s and 1990s, when the industry was a pillar of the local economy. However, as its counterparts in Taiwan and the mainland continue to mature, Hong Kong’s creative industry has gone downhill. Virtual reality technology could help the city turn the tide.
Despite the lack of government support, local entrepreneurs have jumped on opportunities. Actor Nicholas Tse Ting-fung is a shining example. He single-handedly launched Post Production Office in 2003 to focus on post-production for commercials and movies. He branched out in Shanghai and Beijing before selling 60 per cent of the firm to a listed company. However, it had to fold its Hong Kong operation mainly because of runaway rentals and high labour costs. The company has now been taken over by Digital Domain.
In the US, innovation and technology firms are among the most profitable. Companies in Hong Kong such as Digital Domain are well positioned to play a role in international efforts to build up borderless empires on the digital front.
The creative industries, particularly the movie sector, have been highlighted in China’s latest five-year plan. Ample resources will be siphoned off to upgrade the industries.
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Virtual reality is a proven field that not only creates jobs, but can also rekindle youngsters’ imagination to make the Hong Kong movie industry great again. It is incumbent upon Yang and his new bureau to provide the necessary support to propel innovative companies such as Digital Domain to the next level.
Albert Cheng King-hon is a political commentator. [email protected]