Date
21 July 2017
Compared to market factors like rentals, faulty government intervention and regulation are posing a bigger hurdle to innovation. Photo: Internet
Compared to market factors like rentals, faulty government intervention and regulation are posing a bigger hurdle to innovation. Photo: Internet

Why a faulty govt mindset is the biggest threat to innovation

Two years ago, a young woman created an app that let housewives upload information on their best dishes. Consumers could check out the dishes and order them if they like.

The app won a big prize at a startup event but the idea didn’t work out in the real world, because under the current law, even these mom’s kitchens must apply for food manufacturing license before they can sell their items.

The young woman’s story was shared by the Lion Rock Institute in a recent article, serving it as an example of how improper or outdated regulation can stifle business ideas.

Against this backdrop, the legal problems faced recently by an entity such as Uber in Hong Kong are not surprising. The government tends to stand in the way rather than facilitate new business ideas.

People like to complain about the city’s high rentals, which are often said to be suffocating startups and small and medium-sized enterprises.

The truth is expensive rentals never stopped the fittest companies from surviving and thriving.

When rentals are expensive, business owners will think of methods to get around. A common route in recent years is to open online shops.

The Lion Rock article cited an example of a young lad who started out with an online shop selling sticky rice balls. His business was so good that he finally expanded and opened a brick and mortar outlet.

Compared to market factors like rentals, faulty government intervention and regulation seem to be doing much bigger harm to innovative, fledgling businesses.

Can the government really play a leading role in growing the city’s technology industry?

Not if our chief executive only cares about setting up a technology bureau without truly embracing the technology itself.

– Contact us at [email protected]

RC

EJ Insight writer

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