The 2025-26 Budget fully reflects the Hong Kong government’s strong focus on innovation and technology development. Facing rapid advances in artificial intelligence (AI) and intensifying global technology competition, the government is using a strategy of reform and innovation to drive high-quality economic transformation. This year’s Budget focuses on AI, smart city development, fintech and new industrialisation, with substantial funding for industry growth and infrastructure, aiming to develop Hong Kong into an international I&T hub.
1. Policy Direction and Government Support
Artificial intelligence and emerging industries. The government has reserved HKD 1 billion to establish the Hong Kong AI Research and Development Institute. The institute aims to guide and promote local AI research and application, support AI industrialisation and strengthen Hong Kong’s international competitiveness.
The first-phase facilities of Cyberport’s AI Supercomputing Centre are already in service. The plan is to increase computing speed to 3,000 petaFLOPS within the year, providing strong computing support for local research.
Policy and institutional reform. Hong Kong Exchanges and Clearing is preparing a dedicated technology enterprise channel to speed up the listing approval process for mainland technology companies in Hong Kong, giving technology companies more convenient financing channels.
The government will also review tax deduction arrangements for one-off licence fees and related-party transactions involving corporate purchases of intellectual property. This is intended to encourage greater R&D investment and promote technology innovation.
Regional collaboration. The “Hong Kong R&D, Greater Bay Area manufacturing” model will make use of the mainland’s mature industrial chain to transform research outcomes into commercial applications in the Greater Bay Area. Development of the Northern Metropolis will also accelerate, with priority given to the Hetao Shenzhen-Hong Kong Science and Technology Innovation Cooperation Zone and San Tin Technopole.
2. I&T Investment and Resource Allocation
The government is strengthening investment and support for I&T enterprises through multiple funds and schemes. Key measures include a HKD 10 billion I&T Industry-Oriented Fund to attract private capital into emerging industries, a HKD 180 million I&T Accelerator Pilot Scheme to provide matching grants for professional accelerators, HKD 1 billion for the Hong Kong AI R&D Institute, HKD 1.5 billion for the Research Matching Grant Scheme, HKD 100 million for the Manufacturing and Production Line Upgrade Support Pilot Scheme, and HKD 600 million for the Hong Kong Microelectronics Research and Development Institute.
These allocations show that the government is supporting I&T development across incubation, smart manufacturing, research support and market expansion, accelerating technology industrialisation and internationalisation.
3. Major Funding Schemes and Enterprise Support
The New Industrialisation Funding Scheme has supported more than 100 smart production lines covering biotechnology, new energy and other sectors, with total investment of around HKD 1.3 billion, including HKD 930 million from private investment.
The HKD 10 billion I&T Industry-Oriented Fund will guide market investment into emerging industries and help build the I&T ecosystem. The Manufacturing and Production Line Upgrade Support Scheme provides 1:2 matching funding to help companies introduce smart manufacturing technologies and improve production efficiency. The HKD 180 million I&T Accelerator Pilot Scheme supports professional accelerators and helps startups grow faster.
For financing and market support, HKEX is preparing the dedicated technology enterprise channel to attract technology companies to list in Hong Kong. The government also plans to simplify approval procedures for low Earth orbit satellite licences to support smart city development. These measures will further promote enterprise digital transformation and accelerate market adoption of technology outcomes.
4. I&T Infrastructure and Smart City Development
The government is actively expanding technology parks and data infrastructure. The Hetao Shenzhen-Hong Kong Science and Technology Innovation Cooperation Zone and San Tin Technopole will provide large-scale I&T land for enterprise development.
Hong Kong will continue increasing investment in I&T infrastructure to improve R&D capability and industrial competitiveness. The third InnoHK research platform will focus on advanced manufacturing, materials and sustainable development. The Microelectronics R&D Institute has been formally established to focus on third-generation semiconductor technologies. Cyberport’s AI Supercomputing Centre will further enhance research computing power and support AI development.
For smart city and low Earth orbit satellite technologies, the government will simplify satellite communication licences and promote smart city and IoT applications. It will also advance smart infrastructure and accelerate data-driven city management and development.
5. I&T Talent Development and Attraction
The government will build a technology talent base through education, training and talent attraction. The PhD Fellowship Scheme will expand to 400 places per year to attract top global talent. The Research Matching Grant Scheme will provide HKD 1.5 billion to promote industry-university research collaboration. The government will provide 4,000 internship opportunities for tertiary students to strengthen industry experience.
The Greater Bay Area Youth Employment Scheme will be relaxed to cover people under 29, with higher subsidies for enterprises. An international talent summit will also attract global technology talent to Hong Kong. These measures will strengthen local I&T talent development and improve Hong Kong’s appeal to international technology professionals.
6. Analysis and Outlook
The 2025 Budget shows the government’s determination to develop innovation and technology through policy reform, funding, enterprise support, infrastructure and talent development. Major highlights include establishing AI as a strategic industry, strengthening investment through funds such as the HKD 10 billion I&T Industry-Oriented Fund and HKD 1.5 billion Research Matching Grant Scheme, improving smart city and data infrastructure through satellite technology and data parks, and expanding talent support through scholarships, internships and cross-boundary employment.
However, Hong Kong still faces challenges in I&T development, including competition with technology centres such as Shenzhen and Shanghai. Improving policy flexibility, strengthening industrial chain collaboration and attracting technology enterprises to establish operations in Hong Kong will remain important for future development.
Conclusion
This year’s Budget provides more resources for Hong Kong’s I&T development and is expected to help Hong Kong become an international innovation and technology hub in the coming years, supporting economic diversification and high-quality growth.
Translation supported by AI.