Survey: Over half of HK firms that invest in AI apply the tech in marketing

Over one-third of Hong Kong enterprises are applying artificial intelligence (AI) at multiple levels, such as marketing (58%), operations (44%), and internal management (34%), a survey found. However, 49% of local AI enterprises have expressed encountering difficulties in recruiting technical talent.

To understand the overall situation of Hong Kong enterprises' use of AI, Hong Kong Productivity Council New Industrialisation (HKPC New Industrialisation)'s "Hong Kong AI Industry Development Study" has collected additional data from 267 companies, of which 81% were SMEs, and 19% were large companies, covering multiple industries, including retail and catering, personal services, and professional service industries. 

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According to the findings, 41% of surveyed Hong Kong enterprises are or will be using AI, with 32% of them already applying the technology at multiple levels, such as marketing (58%), operations (44%), and internal management (34%). The average cumulative investment in AI has reached HK$830,000. For the remaining 9% of companies preparing to integrate AI technology into their business operations, their average investment budget is approximately HK$140,000.

In terms of plans to expand the use of AI, 59% of companies that have already integrated AI stated that they will further expand their AI applications and increase their investment. 61% of them are considering to expand their investment by HK$300,000, and the average expected additional investment amount is as high as HK$1.22 million.

Challenges faced by AI industry

Meanwhile, the survey also focused development of Hong Kong’s AI industry. Among all AI enterprises interviewed, 25% are large companies, and 75% are small and medium enterprises (SMEs). Of these, 17% said they are developing at all three levels (basic layer, technology layer and application layer), and 22% said they intend to extend their development to other layers in the future.

55% of the companies are looking to expand their businesses into both international and local markets. In comparison, 14% and 11% of companies will choose to focus their businesses in Hong Kong and the Mainland, respectively. 

However, 49% of companies said they are having difficulties recruiting, and some even reduced their hires of technical talent in Hong Kong. 77% of companies reasoned that it is due to Hong Kong’s high operating costs, and 41% expressed that Hong Kong lacks relevant technical talent. Nevertheless, 45% of companies still plan to increase the hiring of Hong Kong technical talent.

Nearly half (44%) of enterprises expressed having difficulties securing enough processing power, and 71% covered the shortfalls through cloud computing services, of which 31% chose HPC data centres in the Mainland while 26% chose HPC data centres overseas. 44% of companies are having difficulties collecting data, and 16% say it takes a long time to collect sufficient data. Meanwhile, 8% reported that they have no relevant data.

What can be done?

The survey also included nine recommendations to promote Hong Kong’s development as an “International AI and Data Industry Development Hub”. HKPC suggested developing data policies through the newly formulated "Digital Policy Office" and establishing regulations to create a “privacy policies-free” environment.

HKPC also said the government should strike a balance between promoting the development of the AI industry and safeguarding public interests, while enhancing the confidence of the industry and the public in the application of AI. 

HKPC said the government should encourage industry chambers to cooperate with the AI industry, share successful AI use cases, explore new application scenarios, utilise government funding to provide AI training to employees, apply AI to help traditional industries upgrade and transform, accelerate the development of emerging industries, and create business opportunities for the AI industry.

To address the talent crunch within the local AI industry, the government should formulate preferential policies to encourage AI companies to relocate non-local AI tech employees to Hong Kong and attract AI talent from across the globe to develop in Hong Kong.

Edmond Lai, chief digital director of HKPC, said: "According to the latest data, 49% of companies that have applied AI believe that its effects are in line with their expectations, and 14% even pointed out that their investment has even exceeded their expectations. However, a small number of companies even said that their AI applications may need more work to achieve the targeted effects."

"Through this valuable data research, HKPC aims to further promote the application of AI across various industries, helping businesses optimise their operations and production processes, enhance efficiency, reduce costs, and facilitate the development of the AI industry in Hong Kong while providing practical recommendations," he added.

Tang Hei Wai, associate director of Hong Kong Institute of Economics and Business Strategy (HIEBS), said: "AI has empowered the development of thousands of industries and brought in huge growth potential to the economy."

"This research focused on the AI policies and development of five distinctly different countries/regions: Singapore, New York, Switzerland, Shanghai and Shenzhen, and we have discovered that all regional governments have introduced specific policies and measures to create a fostering development environment for AI technologies. Among them, Shenzhen even proposed to cooperate with Hong Kong to build an AI HPC centre," he said. 

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