Editorial: Set Targets for Government Investments in I&T Firms – 20240617 – English – Daily Ming Pao

In recent years, the government has been pumping resources into the promotion of innovation and technology (I&T) development with a diversity of measures — one of which is the launch of the HKIC. In his Policy Address two years ago, the Chief Executive announced the creation of the HKIC, with an initial capital of HK$62 billion to be directly invested in target industries to promote Hong Kong’s industrial transformation. Hong Kong has long subscribed to the principle of “big market, small government”, with the government rarely directly involved in private investments. The creation of the HKIC was a major reformation in the government’s governance mindset.

After more than a year in the making, the HKIC’s inaugural investment projects are taking shape at long last. The first that has been announced is the investment into the AI unicorn SmartMore. As can be learned from what the HKIC and the government have said, the HKIC has identified three investment themes in this early stage, namely hard technology, biotechnology and new energy technologies. The targets of its investments include local, mainland Chinese and overseas companies. Concerning the theme of hard technology to be announced this month, it will mainly revolve around AI, especially the research, development and application of large AI language models. As for the biotech theme next month, it will cover areas such as diagnosis, devices and pharmaceuticals.

Founded in late 2019, SmartMore has only spent 18 months to join the ranks of unicorn companies. The smart manufacturing technologies it has developed are widely used in the production of electric vehicle batteries, car parts, watches, pharmaceuticals and other fields. The company serves nearly 300 leading companies around the world, including well-known brands such as Zeiss, Canon and BYD. As its maiden investment, the Hong Kong-born unicorn SmartMore is undoubtedly a relatively safe bet for the HKIC.

The HKIC would not disclose the amount of investment in SmartMore due to commercial considerations and market sensitivity. Nevertheless, it emphasised that SmartMore had made many “weighty” commitments, including considering Hong Kong before other cities when going public and helping to improve Hong Kong’s computing power. It had also promised to partner with the city’s universities to establish an artificial intelligence research institute, which will focus on master’s and doctoral programmes in the field of AI to cultivate young local talent. The institute will enrol the first batch of students as early as next year.

HKIC is a government investment tool to promote industrial policies. It should not only hold regard in returns, but also industrial development strategies. Since the establishment of the HKIC, one of the relatively common criticisms is its lack of transparency. In the Legislative Council, some members have argued that the authorities should disclose the HKIC’s management hierarchy, investment model, operating expenses, staffing and salary levels. As some of the HKIC’s investment plans involve sensitive business information, confidentiality is understandable. However, the company’s operations and management should be more transparent. The government should also come up with a bespoke set of performance indicators for the HKIC as benchmarks for the company’s overall performance, including investment returns and the effectiveness of boosting the industry’s growth.

Ming Pao Editorial 2024.06.14: The government should set performance indicators for direct investment in innovation and technology companies

The Hong Kong Investment Management Co., Ltd. (HKIC), established by the government, signed a strategic cooperation agreement with SmartMore, a Hong Kong-made artificial intelligence “unicorn”.

In recent years, the government has invested a lot of resources in a multi-pronged approach to promote the development of innovation and technology, and the establishment of a Hong Kong investment company is one of these measures. In the Policy Address of the year before last, the Chief Executive announced the establishment of a Hong Kong Investment Corporation with an initial capital of NT$62 billion to directly invest in target industries and promote the transformation of Hong Kong’s industrial structure. Hong Kong has long believed in “small government, big market” and the government rarely directly participates in private investment. The establishment of the Hong Kong Investment Corporation is a major innovation in government governance thinking.

After more than a year of preparation, the first batch of investment projects of Hong Kong investment companies have finally been announced. The first one announced is the investment in the artificial intelligence (AI) “unicorn” Simou Group. Based on the opinions of Hong Kong Investment and the government, Hong Kong Investment has initially targeted three investment themes: hard technology, life technology, and new energy technology. Investment objects include local, mainland and overseas companies. The hard technology investment themes announced this month mainly focus on AI. , especially the development and application of large-scale AI language models. Next month’s life science and technology theme will include diagnosis, instruments, drugs and other categories.

Simou Group was established at the end of 2019 and became a “unicorn” in just 18 months. The intelligent production technology it developed is widely used in the production of electric vehicle batteries, auto parts, watches, pharmaceuticals and other fields, serving nearly 300 companies around the world. Leading companies include well-known brands such as Zeiss, Canon and BYD. Hong Kong Investment takes Si Mou, the Hong Kong-produced “unicorn”, as its first investment, which is undoubtedly a more stable choice.

The Hong Kong investment company did not disclose the amount of investment in Thinking due to commercial considerations and market sensitivity, but emphasized that Thinking has made many “weighty” commitments, including giving priority to listing in Hong Kong, helping to improve Hong Kong’s computing power level, and Cooperate with local universities to establish an Artificial Intelligence Research Institute, focusing on master’s and doctoral programs in the field of AI, cultivating local young talents, and recruiting the first batch of students as soon as next year.

Hong Kong Investment is a government investment tool designed to promote industrial policy. It should not only look at returns, but also look at industrial development strategies. Since the establishment of Hong Kong Investment Corporation, one of the more common criticisms has been the lack of transparency. At the Legislative Council, some members believed that the authorities should explain Hong Kong Investment Corporation’s management structure, investment model, operating expenses, staff establishment and even salary levels. Some of Hong Kong Investment’s investment plans involve sensitive business information, so it is understandable that the company should keep it confidential, but the company’s operations and management should be more transparent. In addition, the government should also tailor a set of performance indicators for Hong Kong investment companies to set a benchmark for measuring the company’s overall performance, including investment return and industrial development effectiveness.

■ Glossary New Words /

subscribe to (sth) : to agree with or support an opinion, a theory, etc.

the ranks : the members of a particular group or organisation

safe bet : sth that is likely to happen, to succeed or to be suitable