LCQ1: Technology Voucher Programme
**********************************
Question:
In November 2016, the Innovation and Technology Commission launched, on a pilot basis, a Technology Voucher Programme (TVP) to subsidise local small and medium enterprises (SMEs) in using technological services or solutions to enhance their productivity, or upgrade or transform their business processes. Some persons-in-charge of SMEs have relayed to me that the long time taken for vetting and approval of TVP applications have resulted in delays in the implementation of their innovation and technology projects. In this connection, will the Government inform this Council:
(1) of the number of applications received since the launch of the TVP, with a breakdown by the major type of businesses in which the applicants engaged and the technological services or solutions involved in the applications; among such applications, the respective numbers and percentages of cases approved and rejected;
(2) of the respective average and longest time taken for vetting and approval of the applications before they were approved; whether it has reviewed if the vetting and approval time is too long and whether it will streamline the vetting and approval procedure; if it will, of the details; if not, the reasons for that; and
(3) whether the number of TVP applications has shown an upward trend recently; whether it will extend the scope of the TVP and increase the amount of subsidy to complement the implementation of the re-industrialisation policy; if so, of the details; if not, the reasons for that?
Reply:
President,
The Innovation and Technology Commission (ITC) launched the Technology Voucher Programme (TVP) on November 21, 2016 to subsidise local small and medium enterprises (SMEs) in using technological services and solutions to improve productivity, or upgrade or transform their business processes. The TVP has approved about $50 million in a short period of 15 months, benefiting enterprises of different types.
My reply to the Hon Chung Kwok-pan’s question is as follow:
(1) From the launch of the TVP to late February this year, a total of 889 enterprises submitted applications. The applicant enterprises come from various industries, including mainly wholesale and retail, import and export trade and professional services. The TVP has also benefited many traditional shops such as florists, restaurants, Chinese and western clinics, travel agencies, as well as shops selling dried seafood or furniture. With no restriction on the types of technological services, the applications involve a wide range of technological solutions, with the more common ones being enterprises resource planning solutions, document management and mobile access systems, electronic inventory management systems, point-of-sales systems, and electronic procurement management systems, etc. A detailed breakdown is set out in the Annex.
Of the 403 applications assessed by the TVP Committee (the Committee) so far, 377 were approved funding, representing a success rate of 94 per cent. Only 26 applications were not supported by the Committee. Another 348 were awaiting supplementary information from the applicant enterprises or were under assessment by the Secretariat. The remaining 138 applications could not be processed and had to be returned, mainly because the applicant enterprises could not submit all the supporting documents required.
(2) While the Secretariat processes the applications as soon as possible upon receipt, the actual processing time is subject to the completeness of the information submitted by applicant enterprises, the complexity of the applications, and the number of applications being processed by the Secretariat, etc. The fastest case took 14 working days from receipt of application to completion of assessment. 10 per cent of the approved cases took less than 34 working days to process. Overall, the average processing time is about 80 working days, with a considerable amount of time spent on following up unclear aspects in the application and awaiting supplementary information from applicant enterprises. As regards cases requiring longer processing time, the longest of which took 175 working days, the main problem lies with complications such as the quotations mentioning different solutions, thus rendering a comparison not feasible and requiring supplementary information or even fresh quotations from service providers. There were also cases where the Secretariat suspected violation of rules and hence required clarifications from the applicants. One example was that both the applicant enterprise and the service provider were located at the same address.
In fact, since the launch of the TVP, the ITC has been streamlining the application procedures and optimising the online application system. Samples of a completed application form and the documents required are provided on the website for reference by applicant enterprises. We have also reduced the number of supporting documents. Enterprises now only need to submit four types of documents, including (1) a copy of the Hong Kong Identity Card of the enterprise’s person-in-charge; (2) the company’s latest Annual Return to the Companies Registry; and (3) any documents proving the business operation of the company (e.g. Mandatory Provident Fund records, invoices, receipts or commercial contracts). For normal enterprises, there should not be much difficulties in preparing these three documents. The fourth type concerns quotation documents. This requirement follows the guidelines of the Independent Commission Against Corruption and the Competition Commission to ensure proper use of public funds and prevent unlawful acts.
In addition to issuing a Guidance Notes for Applications and publishing a pamphlet to introduce the TVP, the ITC also co-organises briefing sessions with different trade associations from time to time to explain to SMEs from various industries points to note when filing an application and share with them successful cases. We plan to promote the TVP by uploading short video clips on the social media.
(3) The number of applications has remained steady since the launch of the TVP. The number of applications received in recent months is also higher than that in the initial period.
Besides, we have adopted industry suggestions to expand the scope of the TVP. Since the end of last month, we have relaxed the programme’s eligibility criteria. All local non-listed enterprises, irrespective of size and duration of operation, may apply. We believe that start-ups will benefit from the removal of the one-year operation requirement, and removing the restriction on the number of employees would mean that medium-sized enterprises with more employees and industries that operate on a shift basis may also apply. At the same time, the relaxation measures will also reduce the documents required, which will streamline the application and assessment process and hence shorten the assessment time.
As regards the funding amount, the current ceiling for each enterprise is $200,000, and the average funded amount for successful cases is about $130,000. As such, we do not see an urgent need to raise the funding ceiling for the time being.
I also notice that there are some inaccurate reports about the TVP recently, such as the need to prepare “proposals” or even engage consultants for submitting applications. I wish to clarify that there are absolutely no such requirements. In fact, applicant enterprises only need to provide some basic information in an application form of only a few pages, such as the project co-ordinator’s information and contact details, the proposed technological solutions, expected deliverables and budget etc. Some of the information can even be provided by just ticking boxes. To minimise the work of applicant enterprises, the TVP online system will also automatically fill in the application form the information that they have provided upon opening of accounts, such as the company name, address and business registration number. For the "Project Outline" which is the key column in the application form, we have also asked applicants to provide the information in less than 500 words. In fact, quite a few successful cases only used some 300 words. Besides, the application form can be completed online and the draft can be saved for future completion and submission.
President, we will continue to monitor closely the implementation of the TVP after the relaxation, and will conduct a comprehensive review on its effectiveness and modus operandi, including the funding scope, funding amount, vetting procedures, etc, in the second half of this year. More enhancement measures will be introduced in due course if necessary.
Ends/Wednesday, March 28, 2018
Issued at HKT 13:10
Issued at HKT 13:10
NNNN