Innovation for Hong Kong's Upward Social Mobility

53 132 Tax credit Cash grant Reduced / preferential tax rate Tax deduction Incentives for withholding income tax Patent-related incentives Other financial support Eligible for EU Horizon 2020 funding Accelerated depreciation of R&D assets Tax exemption Cash back Data source: Worldwide R&D Incentives Reference Guide 2020, Ernst & Young, 2020 Ireland Israel Singapore Hong Kong Table 6.2 A Comparative Study of Incentives for R&D Investment in R&D Centers 6.2.6 At present, the main difficulty in attracting large technology companies to develop in Hong Kong is the problem of talents. First of all, since Hong Kong has no universal retirement protection after graduation, young people in Hong Kong have to share the financial burden of their families and enter the job market, giving up the opportunity to pursue further study in postgraduate courses, which makes them less competitive in both the development of the Greater Bay Area and the employment of science and technology companies in Hong Kong. The Hong Kong government urgently needs to increase economic incentives to attract local university graduates to study postgraduate courses. In the long run, it must solve social issues such as universal retirement protection and provide a benign environment for Hong Kong to train local senior research talents. 6.2.7 Secondly, technology companies have to recruit talents from overseas, mainly mainland talents, when there is a shortage of local talents. However, many families of talents who come to Hong Kong to develop through the government’s talent schemes are still in Mainland China, and the motivation for developing in Hong Kong alone is not high. In addition, companies recruiting overseas talents must also recruit local employees proportionally132. Therefore, many technology companies, especially large companies, are facing substantial difficulties in recruitment. For example, Huawei’s Noah’s Ark Lab planned to recruit 1,000 researchers, but currently there are fewer than 400. 6 Develop Technology and Innovation Industries and Foster Upward Social Mobility