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94% of Interviewed Hong Kong Enterprises Assert AI Cannot Replace App Developers

The Hong Kong Wireless Technology Industry Association (WTIA) today announced the results of its latest Hong Kong Smartphone Apps Industry Survey, finding that that while 94% of surveyed Hong Kong enterprises foreseeing the supportive role played by Artificial Intelligence (AI) in apps development, talent and technology shortage is hindering the further adoption of AI.

Commissioned by the WTIA, the “Hong Kong Mobile Apps Industry Survey 2022-2023” (the Survey) is one of the deliverables of the “Asia Smart App Awards 2022/2023” sponsored by Create Hong Kong (CreateHK) of the Government of the Hong Kong Special Administrative Region (HKSAR). Focusing on the development of Hong Kong’s smart app industry, the Survey has been independently executed by the Hong Kong Productivity Council (HKPC) for eighth editions. Between February and April 2023, the HKPC interviewed the senior executives of 172 smart app enterprises in Hong Kong and other Asian countries and regions through online questionnaire or telephone interview for understanding the industry trends, identifying the industry needs, and inviting the respondents to offer recommendations to both the industry and policymakers.

Key findings of the Survey are summarized as follows:

  • Opportunities and challenges of AI: 73% of surveyed Hong Kong enterprises plan to adopt AI in business, with 94% believing that AI can play a supportive role in apps development, generally expected to increase productivity by 1% to 24%. However, only 6% of respondents expected AI to replace programmers. While 69% of surveyed Hong Kong enterprises anticipated that AI can enhance quality and efficiency, reduce human errors and cost. due to various reasons such as  extra human  support will be needed, existing teams cannot adapt promptly to the change, immature technology and others , merely 33% of respondents have increased their team size in response to AI, and 11% of them have increased their team size by 25% or above. In addition, 53% of respondents indicated that they lacked the skills and resources required for adoption of AI in their companies.
  • Research and development resources allocation: Only 48% of surveyed Hong Kong enterprises said they would allocate resources to User Experience (UX), down by 10% from 2021(the 2021 survey) year on year. Resource allocation for product research and development (R&D)/ Product Development remained stable compared to 2021. The proportion of R&D resources allocated by surveyed Hong Kong enterprises to product R&D remained consistent between 2022 and 2021.
  • Operation overview: 30% of surveyed Hong Kong enterprises reported a “Gain Profit” for the 2022-2023 fiscal year, a slight decrease of 2% compared to 2021 year on year. And 42% of surveyed Hong Kong enterprises had focused their business in both local and outbound regions, up from 38% in the 2021 survey, with an annual growth rate of 4%. Annual revenues for local mobile application development companies were found to be generally lower than in 2021, with the proportion of surveyed Hong Kong enterprises with earning less than HK$500,000 per year increasing from 11% to 19%; those earning between HK$500,000 and HK$2 million increased by 4% only. Annual revenue from applications generally was also found to generally decreased with only 21% of respondents had more than half of their revenue from mobile applications, down 9% compared with that in the 2021 survey. As for the companies that were operating at a loss, they remained conservative on the prospects of reaching a break-even point, with 47% of them estimated that it would take three to five years to achieve a break-even.
  • Human resources: The Survey found that 47% of the interviewed Hong Kong companies indicated a shortage of technical staff, which remained more severe than that of management and sales personnel. Overall, 59% of the interviewed companies believed that the main reason for the shortage of technical personnel was a lack of skilled talent with related technical expertise. As for the talent shortage at management and sales levels, the interviewed companies believed that the situation had improved in the survey period, with the proportion of respondents that had no staff shortage in management positions remained at 42%, while the proportion concerning sales positions without staff shortages decreased from 50% in 2021 to 46% in 2022. Among the respondents, 59% of them indicated that they faced the talent loss and shortage issues by recruiting part-timers and free-lancer, and 45% by improving remuneration package for staff retention.
  • Choices of platform and technology: The Survey found that among the applications developed by the respondents, 92% were of business application and e-commerce types, and 35% were of information platform type. The proportion of applications in the game category increased significantly from 9% in the 2021 survey to 27% in the Survey In terms of technology, the adoption of Near Field Communication (NFC) increased from 19% to 51% in the Survey,  indicating that NFC has become the most commonly used technology in the applications, followed by Artificial intelligence /Machine learning(AI/ML) new technology and Bluetooth Low Energy (BLE) which ranked second and third respectively.
  • Operational challenges: During the survey period, 60% of the interviewed companies indicated that lack of staff posed the biggest operational challenge,  an increase of 3% from 57% in the 2021; other challenges included seeking new clients (36%), rental costs(35%), and long product development cycle and over budget(24%).

Mr. Keith Li, Chairman of the WTIA, said, ” Despite recurring news reports suggesting that AI is on the brink of replacing human jobs, the survey results underscore the lasting significance of humanity. AI still necessitates human input and operation, and nearly 95% of Hong Kong enterprises remain undaunted by its emergence, acknowledging its potential to enhance employee and business efficiency. The key takeaway is not that AI will supplant jobs, but rather that individuals who can master and effectively utilize AI will replace those who stay complacent.”

Mr. Alex Chan, General Manager, Digital Transformation of HKPC, stated, “The talent shortage remains a major challenge for business. In addition to considering more flexible forms of employment or improving benefits to attract talent, companies can also provide appropriate skills training (such as AI) for existing employees to enhance their work efficiency in order to remain competitive. Enterprises should not view AI as exclusive to the IT or software development departments, but rather consider how to adopt it across various departments.”

In today’s press conference, the WTIA also announced the shortlist of the top nine finalists for the “Asia Smart App Awards 2022/2023 ” and will hold the final judging for them on 29 June 2023, with a summit and awards ceremony on the same day.

Finalists of the ” Asia Smart App Awards 2022/2023 ” (in arbitrary order)

  • Public Sector & Social Innovation Award

Hong Kong: RPAISE-HK-EXP (Institute for the Environment, HKUST)

Vietnam: BusMap (PHENIKAA MAAS)

Thailand:        HandySense (National Electronics and Computer Technology Center)

  • Lifestyle & Entertainment Award

Hong Kong: HelloTalk (Hellotalk Limited)

Malaysia: Touch ‘n Go eWallet (TNG Digital Sdn. Bhd.)

Israel: Photo Scan by Photomyne (Photomyne)

  • Business and Commercial Award

Hong Kong: Lalamove Deliver Faster (Easy Mobile Logistics Hong Kong Limited )

Hong Kong:  ARC Robot Control and Management (R2C2 Limited)

Malaysia:  Fasstap™ (Soft Space Sdn Bhd)

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