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2011 South East Asian Regional Workshop on Science, Technology and Innovation Indicators (5 – 8 Dec ember 2011) Innovation Survey of Hong Kong, China Joseph Y.C. WONG Census and Statistics Department, Hong Kong, China. Topics covered in this brief. Background

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2011 South East Asian Regional Workshopon Science, Technology and Innovation Indicators(5 – 8 December 2011)Innovation Survey of Hong Kong, ChinaJoseph Y.C. WONGCensus and Statistics Department, Hong Kong, China

topics covered in this brief
Topics covered in this brief
  • Background
  • Methodology of the innovation survey of Hong Kong
  • Analysis of the latest profile of innovation activities in the business sector of Hong Kong




Innovation represents a new source of industry competitiveness and economic growth and is crucial to the development of Hong Kong towards a knowledge economy

Under the “market leads, government facilitates” economic policy, Government provides support to R&D and technology development in Hong Kong through:

providing funding support to R&D and technology upgrading projects in the industry through the Innovation and Technology Fund (ITF)

providing monetary incentive through R&D cash rebate (10% of applied R&D investment by business firms in partnership with local research institutes)

putting in place science and technology infrastructure (e.g. Science Park)

setting up public research institutes and R&D centres to facilitate technology transfer to local industries

strengthening collaboration between parties in the Mainland China and Hong Kong in the area of innovation and technology

fostering an innovation and technology culture through workshops, project competitions etc.



development of innovation statistics of hong kong
Development of innovation statistics of Hong Kong

The Innovation and Technology Commission (ITC) was set up in 2000 by the Government of Hong Kong, China, with the mission to spearhead Hong Kong’s drive to become an innovative and knowledge economy

The Census and Statistics Department (C&SD) is responsible for data collection, compilation and dissemination of science, technology and innovation (STI) statistics

STI statistics are useful to the community and the Government in tracking the development of innovation and technology in Hong Kong and for formulating evidence-based science and technology policy and promotion strategies

Innovation statistics for the business sector are compiled from data collected through the Survey of Innovation Activities introduced since 2001 (R&D data are also collected in the same survey)



C&D adopts international statistical guidelines forcompilation of internationally comparable STI Indicators of Hong Kong
  • Concepts and definitions adopted in the innovation survey are based on the Oslo Manual (OECD and Eurostat)
  • Effort has been made to align the framework of the innovation survey of Hong Kong with that of the Community Innovation Survey for the European economies to facilitate compilation of internationally comparable innovation statistics



metadata of the innovation survey
Metadata of the innovation survey

Frequency: annual survey conducted under the Census and Statistics Ordinance as a mandatory survey, specifically designed for collecting data on innovation activities in the business sector of Hong Kong

Number of survey rounds: since its introduction in 2001, ten rounds of the innovation survey have so far been conducted; fieldwork for the 2010 survey round has been completed and survey findings will be released by end 2011

Reference period: calendar year

Coverage: an economy-wide survey covering all major industries in Hong Kong, except agriculture, forestry, fishing, mining and quarrying industries (insignificant, accounting for 0.06% of GDP)



coverage and sampling method
Coverage and sampling method

Sampling frame: Central Register of Establishments (CRE), an computerised database containing records of all companies and organisations operating in Hong Kong; private non-profit organisations are not separately identified in the CRE

Industry classification: Hong Kong Standard Industrial Classification (HSIC) Version 2.0, modeled on the UN’s International Standard Industrial Classification of All Economic Activities Revision 4, with local adaptations

Population size: around 300 000 business firms in Hong Kong

Sample size: a sample survey on around 5 500 business firms in each survey round

Sampling method: stratified sampling; business firms are stratified by industry group, and within each industry group, further by firm size (in terms of employment) – construction firms with less than 10 employees are not covered



challenge special features of the sampling design
Challenge: special features of the sampling design

Innovative firms are small in number, in particular technological innovation performers represent around 3% of all business firms in Hong Kong; innovation activities are not regular and not evenly distributed among industries

To enhance the effectiveness of data collection, target business firms (with a greater potential of being R&D performer) are covered in full (certainty cases):

Firms which have been reporting R&D data to previous rounds of innovation survey

Firms identified to have undertaken R&D through a screening question in the larger-scale annual survey of economic activities (with over 20 000 firms enumerated in each survey round)

Firms engaged in R&D projects in collaboration with public research institutes

Firms operating in technology clusters (e.g. Science Park)

Firms which are applicants for government ITF and R&D cash rebate

Firms which are patent applicants

Other target firms identified from media reports and intelligence from other government agencies

For other firms, a sample is drawn from each stratum, with a greater sampling fraction for larger firms and for those industry groups which tend to have a greater propensity to perform R&D and innovation activities



data collection method
Data collection method

Data collection method: mainly personal interviews (including face-to-face interviews and telephone interviews)

A typical survey cycle of the Survey (2010 reference year as an illustration) is as follows:

Review of changes in data requirements and finalisation of questionnaire: November to December 2010

Preparation and printing of survey documents: January 2011

Training of interviewers: February 2011

Fieldwork period: February to September 2011

Response rate: over 95%

Data quality assurance measures: computer validation and field verification of dubious cases throughout the data collection process

Data tabulation and analysis: October to November 2011

Dissemination of survey results: end December 2011



technological innovation
Technological innovation
  • Product innovation
    • Introduction of a technological new or significantly improved products (goods and services) e.g. Octopus card (smart card system), Mycar (electric car), mobile banking
  • Process innovation
    • Implementation of a technologically new or significantly improved process (production and delivery) e.g. GPS tracking system for logistic company


non technological innovation
Non-technological innovation
  • Organisational innovation
    • Implementation of a new organisational method in the firm’s business practices, workplace organisation or external relations (e.g. business re-engineering, introduction of a new supply chain management system; quality-management system etc.)
  • Marketing innovation
    • Implementation of a new marketing method involving significant changes in product design or packaging, product placement, product promotion or pricing (e.g. branding, introduction of new flavours for a food product in order to target the product to a new customer segment etc.)



Challenge:what constitutes innovation activities (e.g. product innovation versus customisation of product) and the distinction between innovation activities of different nature (e.g. product innovation versus marketing innovation) may not be clear to some respondents; overcome by including practical examples in explanatory notes accompanying the questionnaire (some illustrations given below)

  • Development of a new multimedia software is product innovation whereas use of the new software to business applications is not a technological innovation activity
  • Introduction of new internet or mobile banking services is a technological innovation whereas making use of mobile banking for sales of bank products is not a technological innovation activity


major data items collected in the innovation survey
Major data items collected in the innovation survey

R&D data (covered in the presentation on Measuring R&D in Hong Kong, China)

Technological product and process innovation implemented by firms

Expenditure on product and process innovation, comprising:

Expenditure on in-house R&D

Expenditure on R&D outsourced to other parties

Industrial design and other preparation (e.g. production start-up, tooling up and industrial engineering) for production or delivery of new products

Acquisition of plant and machinery related to technological innovation

Market introduction of new products

Acquisition of external technology (e.g. patent, know-how) related to technological innovation

Training directly related to technological innovation (e.g. training of staff on use of new production technology or new processes)



innovation data collected in the survey cont d
Innovation data collected in the survey (cont’d)

Innovation expenditure by source of funds (industry, government, abroad) for implementing technological innovation

Number of direct employees deployed to technological innovation activities (full-time equivalent)

On-going technological innovation and abandoned technological innovation

Effects of technological innovation (e.g. broadening range of products, increased market share, product quality improvement, enhanced productivity, cost reduction, introducing environmentally friendly products and processes etc.) on business firms

Contribution of product innovation to business receipts



innovation data collected in the survey cont d1
Innovation data collected in the survey (cont’d)

Collaboration arrangements on technological innovation (by type of local and non-local partners)

Sources of knowledge or information (e.g. internal sources, market sources, institutional sources, technical standards, environmental or product safety standards etc.) used in technological innovation

Barriers to technological innovation

Non-technological organisational and marketing innovation implemented by firms



d issemination of r d statistics and sti indicators of hong kong
Dissemination ofR&D statistics and STI indicators of Hong Kong

R&D and innovation statistics of Hong Kong are published in the annual publication Hong Kong Innovation Activities Statistics

Hong Kong Innovation Activities Statistics 2009 was published in end December 2010

The 2010 edition will be published in end December 2011

More comprehensive analyses of science and technology statistics and other knowledge-economy statistical indicators are published in the biennial publication Hong Kong as a Knowledge-based Economy

The 2011 edition was published in September 2011

Feature articles on R&D, innovation activities and KBE published in Monthly Digest of Statistics

All C&SD publications and their back issues can be free downloaded from C&SD website:



The percentage of innovative firms increased from 16% in 2001 to 39% in 2009 (around 110 000 firms)

Percentage of innovative firms



Business expenditure on technological product and process innovation peaked in 2005 and has been consolidating in recent years

  • Business innovation expenditure increased from US$ 0.9 Bn in 2001 to US$1.8 Bn in 2009, with an average annual growth rate of around 10%

Business expenditure on technological product and process innovation (US$ Mn)

US$ 1.8 Bn

US$ 0.9 Bn



The import/export trade (involving trading firms with manufacturing related activities in Mainland China), distributive trade, accommodation and food services industry group has a higher technological product innovation intensity (2009 results)

% contribution of new/significantly improved products to innovative firms’ business receipts


In the business sector, large firms taken together account for 34% of the total technological innovation expenditure, compared with 38% for medium-sized firms and 28% for small-sized firms (2009 results)


firms (28%)

Large firms (34%)


firms (38%)


impact of technological innovation on businesses 2009 results
Impact of technological innovation on businesses (2009 results)

Improved quality of products (26% of firms which have undertaken technological innovation)

Improved production flexibility (20%)

Increased range of products (20%)

Reduced labour cost per produced units (17%)

Increased production capacity (17%)



barriers to technological innovation 2009 results
Barriers to technological innovation (2009 results)

Innovation costs too high (66% of firms which have undertaken technological innovation)

Excessive perceived economic risks (56%)

Inadequate emphasis on technological innovation in government’s procurement (46%)

Organisational rigidities – attitude of senior management towards change (43%)



Thank you