ECA

Hong Kong Incubation Programs

27.06.2017 Cloris Long
Hong Kong Incubation Programs

Against the background of a weak and uneven recovery in the OECD economies versus relatively robust growth in fast-developing Asia, an interconnected global start-up landscape is taking shape in Hong Kong. The start-up ecosystem in Hong Kong is being supported by a number of government and private sector communities and I will focus this article on the two major government initiated incubation Programs and how they assist startups to grow and expand into mainland China and Asia.

Hong Kong Science and Technology Parks Corporation (HKSTPC)

HKSTPC is a Hong Kong government supported institution which established in 2001 to provide infrastructural support services to technology-based companies carrying out R&D activities. The Science Park provides laboratories and shared facilities, which helps to reduce the capital investment required for product design and development; thus enabling rapid entry of new products into the market at lower cost. Currently, about 30% of the companies are beneficiaries of its incubation program and 70% are tenanted companies.

Unlike Singapore, HKSTPC is not a one-stop shop as it believes the ecosystem should develop organically, with some support but minimum government intervention. For technology-related services, financial and legal services, IP registration, and company setup – it assists companies by referring them to suitable companies and organisations.

Industry Clusters (verticals)

  • ICT
  • Electronics
  • Bio-tech
  • Green / Clean Tech
  • Material science and precision engineering
  • Innodesign - product design, manufacturing

Platforms (horizontals):

Robotic (industry automation, advanced manufacturing, medical robotic, etc.), Smart City, Fintech, Healthy ageing

Key Capabilities:

Research-based deep tech, Biotech, Green/Clean Tech

Potential collaborators

  • Government funded research institutes
  • University research centers and spin-offs
  • Technology transfer offices
  • Incubation centers

Notable tenants

In order to be accepted into HKSTPC, a company must conduct at least 50% R&D activities. Rent starts as little as HK$500/week per cubicle
  • Karolinska Institute of Sweden on regenerative medicine
  • TCL
  • Huawei
  • Phillips

Key programs

1.Soft Landing Program (ends in Sep 2017)
  • Service Structure: sponsored travel to HK
  • Purpose: to commercialise ideas, look for investors and research partners.
  • For shortlisted individual projects: a round-trip economy class flight up to HK$16,000 / AU$2,963
  • For representatives and key researchers from institutes: a round-trip economy class flight plus 5-night hotel HK$23,500 / AU$4,352
  • Process: Fill in an application form, and to be approved by assessment panel members. A round of application review takes place every 2 months and usually takes about 4 weeks.
  • Criteria: need to be able to scale to Asia
2. 3-Day Visiting Program:
  • Seminar with Business residents from the Park
  • Factory visits (Shenzhen), R&D institutes
  • Networking with associations to universities
  • Program can be tailored made
3.Incubation Program: Rent free for the first 12 months, then half rent for the remaining of the program, plus access to mentors and Government grants
  • Incu-App (18 months): HK$ 60,000
  • Incu-Tech (3 years): HK$ 180,000
  • Incu-Bio (4 years): HK$ 240,000

Cyber Port

Cyberport’s mission is to nurture innovation and technology by facilitating start-ups with access to various entrepreneurship programmes, talent meet-ups and a community of budding entrepreneurs. In addition, it provides access to technology, business matching and marketing support.

Industry Clusters

  • Fintech
  • Big Data
  • Fashion Tech / Wearable Tech
  • Smart City
  • Education Tech
  • ICT

Platform:

Fintech Smartspace co-working space collocated with major bank (Citi Bank) research lab
 
Key Capabilities: Data oriented tech

Potential collaborators: Startups; Post accelerator study tour/roadshow

Key programs

1. Soft Landing Program
  • Service Structure: maximum 6 months
  • Familiarisation service support on market, legal, and business development activities
  • Promotion of services/products via Cyberport’s available channels
  • Opportunity to attend digital tech events, seminars, workshops, and activities organized/co-organized by Cyberport to establish connections and network with entrepreneurs, investors, industry leaders, and stakeholders (Note: Participants should bear admission fee of events if payable. Cyberport will try to provide complimentary tickets, if available)
  • Opportunity to receive mentorship from industry experts or consultants leveraging Cyberport’s Expert Network (Free consultation for first 2 hours, HK$2,800/hr for subsequent consultation meeting)
  • Go-to-market opportunities
  • Opportunity to showcase IoT products at relevant Cyberport events or exhibitions
  • Making use of Cyberport Representative Offices in Shanghai and Guangzhou to soft-land into the Chinese market
2.Visiting Program
  • Tour around Cyberport / Incubation Center
  • Market briefing on funding options, case study (e.g. GoGo Van at series C started out from Cyberport)
3.Incubation Program
  • Rent-free working space for up to 24 months (only for incubatees who choose to work on-site at Cyberport)
  • Access to Cyberport funds:
 
> micro fund: HK$100,000
> incubation program: HK$300,000
> accelerator program: HK$330,000
> macro co-investment fund: up to HK$200 million + equity that matches up with outside investors

Synergy with Adjacent Innovation Hubs

Despite its advantages as the leading Asian commercial hub, the fact is that the tech sector is the object of fierce global competition and this means that Hong Kong needs to make aggressive investments if it is to catch up. Hong Kong’s tech startup ecosystem ranks well below the world’s top 20 and is still at an early stage of development, still far from being self-sustainable. Therefore, the Hong Kong government has recently beefed up measures to develop innovation and technology in Hong Kong. In 2016, the Hong Kong government announced a HK$2 billion Innovation and Technology Venture Fund for co-investing in local innovation and technology start-ups with private venture capital funds on a matching basis.

“Coopetition” with neighbouring Shenzhen to take advantage of low China’s manufacturing costs in synergy with Hong Kong’s skilled labour and financial liquidity is one possible option. Hong Kong and Shenzhen recently signed a deal to jointly develop the Lok Ma Chau Loop into an ¬innovation and technology park, which will be built on the 87-hectare loop on the city’s northern border.

With the eminent free trade agreement between Australia and Hong Kong, I am sure more opportunities will be open up to services based startups and Fintech companies. You can read more about the Hong Kong start-up ecosystem from the following sources:






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