Edmond Lai (left), chief digital officer of the Hong Kong Productivity Council, and Tang Hei-wai, associate director of Hong Kong Institute of Economics and Business Strategy of HKU Business School, release the key findings on the Hong Kong AI Industry Development Study on Nov 10, 2023. (LI XIAOYUN / CHINA DAILY)

Survey results indicate that artificial intelligence enterprises in Hong Kong face three major challenges – insufficient processing power, difficulties in data collection, and a struggle to recruit technical professionals. In response, the Hong Kong Productivity Council made nine recommendations on Friday to drive the advancement of Hong Kong’s AI industry.

The survey, conducted by the HKPC and Hong Kong Institute of Economics and Business Strategy (HIEBS) of HKU Business School, covered 216 AI enterprises. Among them, 44 percent reported difficulties in securing sufficient processing power, with 71 percent addressing the shortfall through cloud computing services. Almost one-third opt for high-performance computing (HPC) data centers in the Chinese mainland, while 26 percent choose HPC data centers overseas.

The HKPC recommended that the government of the Hong Kong Special Administrative Region establish an Asia-leading HPC center and introduce preferential policies to attract private sector expertise and resources from both within and outside Hong Kong

The survey findings identified data collection as another factor troubling AI companies in Hong Kong, with less than a tenth of those surveyed indicating that they have sufficient data.

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In addition, 49 percent are facing recruitment challenges, with nearly 20 percent reducing hires of technical staff in Hong Kong. The main reason for this, according to 77 percent of interviewed businesses, is the city’s high operating costs. Forty-one percent of firms believe that Hong Kong lacks tech talent. 

Nevertheless, 45 percent of those surveyed said they plan to increase their technical positions in Hong Kong, citing favorable factors such as government-backed policies, improved business prospects, globally renowned universities, and advantageous tax policies. 

Referring to Shenzhen’s proposal to jointly build an AI HPC center with Hong Kong, and the support provided by markets such as Singapore, New York, and Shanghai to stimulate AI development, Tang Hei-wai, associate director of HIEBS, said, “The government can refer to the experience of other regions and analyze the current challenges faced by local enterprises to formulate targeted incentive measures to ensure that our city can seize the opportunities that Al brings.”

Aside from AI-focused enterprises, the survey collected data from 267 companies in major industries, in a bid to understand the overall situation of Hong Kong enterprises’ use of AI.

According to the survey findings, 32 percent of the interviewed companies have integrated AI into their operations, with an average investment of HK$830,000 ($106,270). However, more than one third expressed an intention to utilize AI, primarily because of high costs and underperforming returns.

Based on the AI development in Hong Kong, the HKPC made nine recommendations to promote AI, focusing on infrastructure, industrialization, and talent.

The HKPC recommended that the government of the Hong Kong Special Administrative Region establish an Asia-leading HPC center and introduce preferential policies to attract private sector expertise and resources from both within and outside Hong Kong.

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On top of improving the AI infrastructure, the HKPC suggested that the government take the lead in promoting large-scale AI applications, and leverage AI technologies to drive the transformation and upgrading of industries. Additionally, the HKPC said it has recommended capitalizing on the city’s financial strengths by developing an International Financing Center for AI Companies.

In terms of fostering an AI talent pool, the HKPC proposed cultivating “AI+ talent” with interdisciplinary expertise, and trawling for international professionals by developing an AI talent-livable city.

“We are committed to promoting the development of the Al industry and have successfully developed relevant technologies as we assist enterprises in upgrading and transforming their businesses,” said Edmond Lai, chief digital officer of the HKPC.

Contact the writer at irisli@chinadailyhk.com