AI Industry Review in 2024 Part Three: Hong Kong's Journey in Artificial Intelligence Development and Innovation

by Anthony Law    2024-12-23

In today's era of rapid technological advancement, artificial intelligence (AI) is undoubtedly one of the most dazzling fields. As we approach the end of 2024, we embark on a series of reviews of the AI industry over the past year. This is the third article in a three-part retrospective on the AI sector, focusing on Hong Kong's journey in AI exploration, its current development status, challenges, advantages, and future outlook.

Current Development and Diverse Applications of AI in Hong Kong

1. AI Innovations in the Financial Sector

In 2024, Hong Kong is steadily advancing on its path of AI exploration, showcasing unique development trends and potential. As an international financial center, Hong Kong actively embraces AI technology to enhance the efficiency and competitiveness of financial services. Financial institutions such as banks are increasingly utilizing AI for risk assessment. They analyze vast amounts of data to make more accurate risk judgments and ensure financial security. The use of intelligent investment advisory services is also becoming more widespread, providing personalized investment recommendations to clients. For instance, the Hong Kong virtual asset trading platform HashKey Exchange has optimized user identification accuracy through AI technology during anti-money laundering and user verification processes. This improvement enhances compliance efficiency, reduces risks, and ensures platform security. ZA Bank also applies artificial intelligence in various scenarios. It verifies the authenticity of account holders' information, effectively enhancing the service efficiency of digital banking.

2. Intelligent Upgrades in Logistics and Trade

In logistics and trade, Hong Kong's ports and logistics companies have achieved significant results by leveraging AI to optimize processes. AI is used for intelligent scheduling in cargo transportation, improving transport efficiency while reducing waiting times and costs. Additionally, smart optimization in warehouse management allows for better utilization of storage space. Lalamove helps small and medium-sized enterprises reduce costs through digitization and AI technology. Over 80% of its users are SMEs, connecting with 1.4 million drivers and 15 million users globally while developing new features to ensure driving safety. Hong Kong International Airport and Cathay Cargo use AI algorithms to monitor workplace safety hazards and cargo status. Cainiao's Hong Kong eHub drives efficient collaboration across all aspects of cross-border e-commerce logistics through intelligent solutions, ensuring global delivery within five days. China Merchants Shipping has launched "ShippingGPT" for ship and crew management as well as market and trend analysis.

3. Exploring AI Integration in Education

The education sector has also seen new breakthroughs, with some schools actively experimenting with integrating AI technology into teaching processes.

Professor TANG Kam-Wing, President of The Hong Kong Polytechnic University, stated that the development of artificial intelligence is significantly changing society and impacting work, learning, and living patterns. In 2024, The Hong Kong Polytechnic University established a Department of Data Science and Artificial Intelligence. It plans to establish a School of Computer Science and Mathematics in 2025 to solidify its leadership position in emerging technology fields.

Professor GUO Yike, Vice President of The Hong Kong University of Science and Technology (HKUST), mentioned that HKUST will comprehensively promote a new curriculum model for "AI + Education." This model will transform AI-related courses from being limited to the computer science department to being offered across all disciplines at the university. This initiative aims to establish HKUST as a true "Artificial Intelligence University."

Additionally, City University of Hong Kong has also established a School of Computing dedicated to promoting interdisciplinary research. This school aims to attract top talent while exploring cutting-edge AI technologies to drive economic development through innovation and serve society.

Challenges Facing AI Development in Hong Kong

1. Difficulties in Talent Development and Recruitment

However, the adoption of AI in Hong Kong has not been without challenges. There are issues related to talent development and recruitment; although Hong Kong has a certain number of tech talents, there is a relative shortage of professionals specifically skilled in AI. A survey conducted by the Hong Kong Youth Association revealed that 84% of students are influenced by developments in artificial intelligence when choosing their majors. Additionally, 66.3% indicated they would consider emerging subjects related to AI; however, 65.8% admitted they were not well-informed about AI-related information.

Therefore, Hong Kong needs to intensify efforts to cultivate local talent. The government will establish an "Education, Technology and Talent Committee" to guide various sectors in attracting tech talent continuously while leveraging Hong Kong's highly internationalized and diverse educational system along with its unique advantages under "One Country, Two Systems." This initiative aims to nurture high-quality talent that promotes technological development including artificial intelligence.

2. Lagging AI Adoption Among SMEs

Small and medium-sized enterprises (SMEs) in Hong Kong face certain delays in adopting AI technologies for several reasons:

• Cost Constraints: The high costs associated with purchasing hardware/software maintenance, hiring specialized talent, and training employees exceed what SMEs can bear.
• Technical Challenges: Issues such as insufficient data volume or quality and compatibility problems with legacy IT systems hinder effective system integration.
• Uncertain Risks: The long payback periods for investments combined with the inherent complexity of technology may lead to operational disruptions.
• Internal Resistance: Employees may resist due to job security fears; management may lack understanding or strategic planning capabilities.

To address these issues, the Hong Kong government has allocated HKD 3 billion for a three-year artificial intelligence funding program aimed at supporting local universities, research institutions, and enterprises in utilizing computing power to drive scientific breakthroughs while attracting local and international AI experts, companies, and research projects to establish operations in Hong Kong.The Securities and Futures Commission (SFC) is also implementing a fast-track licensing approval process expected to issue the first batch of official licenses by year-end to applicants from virtual asset trading platforms.

Unique Advantages for AI Development in Hong Kong

1. Cultural and Social Advantages: Foundations for Integration and Expansion

Hong Kong's uniqueness lies in its over a century-long history of cultural fusion between East and West along with its open social structure. This provides exceptional advantages and broad opportunities for AI development. Hong Kong can fully utilize its multicultural background to promote deep applications of AI technology in cross-cultural communication and collaboration. For example, developing multilingual intelligent translation tools using AI can facilitate accurate translations while understanding language habits and metaphors within different cultural contexts—providing seamless communication experiences for multinational business negotiations or cultural exchange activities. Additionally, leveraging AI technology to create culturally distinctive digital content—such as artworks or music that blend Eastern and Western artistic styles—can meet diverse aesthetic needs while driving cultural innovation and dissemination. This further enhances Hong Kong's influence in global cultural exchanges while laying a cultural foundation for expanding the AI industry internationally.

2. Global Cooperation and Innovation: Key Pathways for Breakthroughs

With its open social structure and international business environment, Hong Kong has the capacity to attract global AI enterprises and talents to collaborate on research and innovation addressing global issues—potentially serving as a key pathway for breakthroughs within the local AI industry. In education, given the urgent need for transformative educational approaches in the age of AI, Hong Kong can unite international educational resources using AI technology to create personalized global educational models that better equip young people to meet future global talent challenges. In terms of low-altitude economy development, as an international metropolis, Hong Kong bears both responsibility and potential to become a model city. The government should accelerate efforts to transform Kai Tak into a pilot area for low-altitude economic activities where applications for AI are extensive—for instance utilizing AI for low-altitude traffic management or optimizing drone logistics delivery. This not only fosters local emerging industries but also sets an example within global low-altitude economic frameworks while further enhancing Hong Kong's international influence and competitiveness. Through these initiatives, Hong Kong can gradually occupy an important position within the global AI industry landscape while providing strong momentum for industrial transformation and economic recovery amid downward economic pressures.

Hong Kong software industry needs deeper insights into the plasticity of AI by focusing on application-level development. The plasticity of AI lies in its ability to conduct multidimensional analyses across various subjects deeply while simulating human behavior patterns—such as writing or creating art—effectively. Currently, application levels remain at an initial developmental stage with numerous promising application scenarios awaiting further exploration; thus there exists significant room for growth ahead filled with possibilities that could bring transformative impacts across multiple fields benefiting human production activities.

In conclusion, opportunities coexist with challenges in Hong Kong's pursuit within the field of artificial intelligence; moving forward it must fully leverage its advantages while actively addressing challenges—continuously promoting deep applications along with innovative developments within various sectors utilizing AI technologies—to build a comprehensive ecosystem fostering artificial intelligence innovation paving new pathways toward economic transformation within society at large. This version breaks down longer paragraphs into shorter ones for improved readability while retaining all key information from your original text.