The government of Hong Kong launched its HK$2bn ($256m) Innovation and Technology Venture Fund (ITVF) on Friday, inviting venture capital firms to become co-investors.

The fund’s launch had been awaited since July, when Anne Choi, commissioner of information and technology, said at the Hong Kong Venture Capital Association’s VC Forum that it was due to go live “in a matter of weeks” after several years of development.

The ITVF will accept applications from both domestic and overseas firms, though it will invest exclusively in Hong Kong-based startups, with a view to bolstering the local ecosystem. Each selected co-investor will agree the details of collaboration with the government.

The government will invest approximately a third of the overall commitment in startups, with VC firms providing the remaining two-thirds. Applications to become a co-investor are open until January 15 2018.

Nicholas Yang, secretary for innovation and technology, said: “The ITVF will help fill the funding gap for local technology startups. We are confident that having this new fund will be conducive to developing a more vibrant Hong Kong innovation and technology ecosystem.”

The fund is the latest in a range of initiatives by the special administration region’s government since its sovereignty was transferred from the UK to China in 1997.

Existing schemes include Cyberport, a co-working and incubator cluster that had supported the launch of more than 320 startups as of February last year. The business park also operates the HK$200m Cyberport Macro Fund, which helps startups grow beyond the seed stage. One of its success stories is logistics company GoGoVan, which has raised capital from backers such as media group Singapore Press Holdings, e-commerce company Alibaba and social media firm Renren.

The government also manages the Innovation and Technology Fund, which was launched in 1999 with HK$5bn and doubled in size to HK$10bn in 2015. The fund focuses on technology startups.

The verious moves all form part of the region’s goal of becoming an economy that can keep up with the technological innovations of its neighbours. Mainland China has more than 100 unicorns – businesses worth more than $1bn – among its startups, according to a ranking by local news publication China Money Network. Meanwhile, Hong Kong’s economy has relied primarily on four traditional sectors – financial services, professional services, trading and logistics, and tourism.

The government’s renewed focus on startups also comes at a time when the region is still reeling from mass protests in 2014 that led to the imprisonment of three pro-democracy leaders and further protests this summer.

In that political context, it will be interesting to see how effective the government will be in attracting overseas venture capital firms as co-investors – a key component of helping startups accelerate international expansion efforts. It will also be interesting to track whether entrepreneurs will be drawn to Hong Kong.

It is, in any case, no coincidence that our sister publication chose Hong Kong as the location for its first Asia congress, taking place this coming Thursday. The region is not shy about pursuing its grand economic ambitions and the ITVF proves the government is not afraid of putting its money where its mouth is – a promising sign.