Hong Kong has been facing criticism that it is a laggard in new technology development, but that doesn’t mean that the situation is all bad.
The city has several strengths and we are actually quite competitive.
The recent tie-up between Ant Financial, the payment affiliate of Alibaba Group, and CK Hutchison to operate payment app business in Hong Kong speaks volumes about our unique advantages.
Indeed, Hong Kong has the potential to become a world-leading data hub, according to a report released by Ernst & Young.
Hong Kong has been stepping up efforts in data industry in recent years, and the initiative has even caught the attention of long-time rival Singapore, according to Herbert Chia, the head of data industry committee of Smart City Consortium, an entity that provides policy suggestions to the government in relation to smart-city development.
Chia noted that Hong Kong is a global financial hub, business and IT center, and the city has sound legal system, advanced infrastructure, free information, etc. This has helped the city lure many multi-national corporations and mainland Chinese firms into setting up their Asia Pacific IT headquarters here.
Still, Hong Kong needs to enhance its data operation capability. If we can find out ways to harness value and business opportunities from a huge amount of raw data, Hong Kong stands a good chance to evolve from an IT hub into a data hub.
Cross-border data transmission is fairly common, and issues such as safety and privacy are crucial, according to Keith Yuen, Ernst & Young Greater China Advisory Partner.
Various nations have drafted their own data safety standards, which poses a challenge for industry development.
“Different nations have different standards, which will be challenging for companies,” Yuen said.
That’s actually a good opportunity for Hong Kong.
If Hong Kong can set up standards and get them widely recognized in the global market, both multinational and mainland firms will be happy to put their data operation centers in the city, Yuen says.
Chia stressed that industry participants have to work closely with government. Both sides must work with each other to find the best solution and standards, he added.
Government has to be involved in negotiating with other regions to discuss data standards. Industry participants can’t do that on their own.
Hong Kong government is very supportive of efforts to build the city into a data hub, said Vincent Chan, partner of Ernst & Young and Advisory Services Leader for Hong Kong & Macau.
Also, Hong Kong has access to China’s vast market, which will be essential to attract global companies as well as mainland firms to expand their overseas presence.
Besides, Hong Kong has implemented the Personal Data (Privacy) Ordinance for more than two decades, which means data standards in Hong Kong are quite likely to be recognized by global markets, according to Alan Lee, Executive Director of Ernst & Young’s Advisory Services.
By contrast, Singapore launched similar regulation only a couple of years ago.
Chia believes Hong Kong only has a short window of time to become a data hub.
“If a multinational company chooses a particular city as its IT or data hub, it’s quite hard to persuade it to move to another city,” he noted.
This article appeared in the Hong Kong Economic Journal on Sept 28
Translation by Julie Zhu
[Chinese version 中文版]
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