Cut Science Park red tape to free up Hong Kong’s tech sector, insiders say

Tenants tell Post high rents and bureaucracy hinder progress in innovation

PUBLISHED : Sunday, 04 March, 2018, 12:02pm
UPDATED : Sunday, 04 March, 2018, 12:17pm

Armed with billions of dollars in government funding for the city’s innovation and technology, Hong Kong Science Park should cut the red tape and be more user-friendly to its tenants instead of imposing hurdles to their success, insiders have told the Post.

Several in the industry expressed hope they could be viewed as partners at the park who are shown more flexible services instead of being treated purely as tenants of a money-oriented project.

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They voiced a chorus of concerns as Financial Secretary Paul Chan Mo-po dished out HK$50 billion (US$6.39 billion) on Wednesday to support the city’s tech development, particularly in biotechnology, artificial intelligence (AI), smart city initiatives and fintech.

The Science Park, located on a campus in the New Territories, has been put in charge of HK$40 billion of the amount for innovation and technology projects. This includes HK$10 billion to support park tenants and build facilities, and HK$10 billion to fund world-renowned research institutes or tech enterprises to set up shop on site.

However, amid the funding news, tenants complained the park was excessively money-minded, charging tenants high rent in addition to a host of management fees and charges to use its facilities.

The park charges market rates of about HK$23 to HK$37 per square foot depending on the type of premises, which would be equivalent to rent for an A-grade office space in Kowloon Bay or Kwun Tong.

Kenneth Chau, CEO of bike-sharing business Ketch’Up Bike, described tenants as “facing enormous pressure” paying rent. “We hope the park can provide some relief measures to ease our financial burden.”

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He suggested it accept tenants’ company shares in exchange for a full rental waiver.

Chau said the park was meant to foster a vibrant tech ecosystem and turn Hong Kong into a regional hub for the sector and should therefore communicate better with its tenants. It should refrain from acting solely as a landlord of a property project, he added.

“We’ve discussed this idea with management, and they said it could be an option, with the park taking the role as an investor.”

Chau believed the arrangement could offer a “win-win” situation as a tech company’s shares would bring in significant profits in future while innovative start-ups would “feel encouraged to keep up their work in the park”.

Park chairwoman Fanny Law Fan Chiu-fun reassured tenants that “a larger chunk” of the HK$7 billion budget funding would be dedicated to supporting existing tenants, especially start-ups and small to medium-sized enterprises. She said the funding would not just go towards attracting multinational companies.

Law added that although the park charged market rates, it had previously frozen rents.

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Victor Wong, founder of OncoSeek, which works in liquid biopsy technology to detect cancer, agreed, saying a tech start-up had to cope with different expenses and it often took a long time for it to see financial returns.

“We’re all concerned about whether all the funding given to the tech sector via the Science Park can really benefit the relevant stakeholders,” he said.

Wong envisioned the park subsidising its tenants to cope with costs relating to compliance and product certification.

“If we want to convert our research results into products, we also need to handle ISO certification costs that can run as high as HK$1 million per product.”

Winnie Lun, founder of eNano Health, which provides saliva tests for various diseases, and Joey Leung, CEO of webcasting company 9D, called on the park to cut red tape in its facility management and funding process.

They said the park imposed numerous administrative hurdles that turn off tenants for whom money is tight.

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“The lab facilities charge over HK$1,000 per hour, but if you want to use them after 6pm or during weekends you need to make a booking at least a week in advance,” Lun said. “This is really inconvenient. Research work should be not confined by such rigidity.”

She said tenants seeking funding from the park often had cash flow problems. Even if their grants were approved, they needed to fork out their own money before being reimbursed, a process that routinely took six months.

It was the park breaching the contract terms, but it required me to pay for my new office’s renovation fees
Joey Leung, CEO of 9D

Leung recalled the park “forcing” her to move into another building to make way for expansion work.

“It was the park breaching the contract terms, but it required me to pay for my new office’s renovation fees and an additional three-month down payment,” she said. “It was so unreasonable.”

Responding to the issue of red tape and other administrative problems tenants had raised, Law encouraged them to give management feedback. 

“Let’s not call these complaints ... rather, there are always areas for improvement,” she said. “I welcome any suggestions and tenants can raise any issues. We really want to crowdsource ideas so [the Park] can become a ‘smart region’. We can’t sit there and dream about it. It has to come from the users, how they want Science Park to look like three years down the road.”

Law asserted the park was considering improvements to its flexibility and making it more user-friendly.

As an example, the chairwoman said laboratories’ opening hours might be extended to 24 hours a day. However, she stressed that smart devices would be needed to man the lab and activate driverless cars, air-conditioning systems and lifts.

Additional reporting by Naomi Ng