Guess where HK firms plan to put most of their money in 2013

While it's not a priority, 8 in 10 mulls over raising pay.

The latest Grant Thornton International Business Report reveals that businesses in Hong Kong are expecting to spend more on R&D in the coming year with a +10% increase from last quarter (14% in Q3 vs. 24% in Q4) .

“Investing in R&D will benefit businesses in the long run - this is especially important when the economy is recovering from the downturn,” said Daniel Lin, anaging partner at Grant Thornton Hong Kong.

“The IBR indicates an improving optimism among businesses in the BRIC & Asia Pacific (excl. Japan) regions, which may mean growing level of foreign direct investment and M&A deals. It’s therefore paramount that businesses sharpen their competitive advantage and prepare for the opportunities ahead.”

The IBR also shows that 82% of business leaders are expecting to offer their employees a pay rise in the next 12 months, signalling a strong intent that businesses are looking to keep their best people and stay competitive.

Daniel Lin continued: “As uncertainties still cloud around the world’s economy, business may be in a ‘wait and see’ approach. However, I would urge owners not to lose sight of their long term growth objectives. Businesses that are able to lock in their best talents and invest will be first out of the gate in a recovery and are likely to find themselves ahead of the competition.”