Hong Kong is stepping up efforts to promote innovation and technology development in the city, with the government vowing to spend as HK$50 billion on such initiatives in the coming fiscal year.
As a key technology hub in the city, the Hong Kong Science and Technology Parks Corp (HKSTP) will receive a major slice of the funding dedicated to the tech sector. The funding will include HK$10 billion for infrastructure enhancement and incubatee support.
Hong Kong Economic Journal recently sat down with Albert Wong Hak-keung, chief executive of HKSTP, to discuss the city’s position in the global tech landscape, as well as the challenges faced by local tech firms.
Excerpts from the interview:
HKEJ: Many people recognize the technology development and innovation in Hong Kong, yet it has been difficult for the institutions to capitalize on their inventions. What is the reason for this?
A: The reason for the challenges we face in tech innovation today can be rooted back to decades ago. Back then, Hong Kong was a proud member of the “Four Asian Dragons” along with Singapore, South Korea, and Taiwan, which relied on inexpensive labor and low-tech businesses to drive growth. [That is no longer the case now.]
Another reason is that not all the people, in fact, have the talent to start a business. In Hong Kong, there are professors and graduates who have good ideas, but they may not necessarily be good entrepreneurs. They may be more suited for research.
As for investors, Hong Kong has access to lots of investors and venture capitalists, but the question is, do they have the capability to invest in and incubate startups in the beginning stage? If we can divert money to initial investment on startups, it can amplify the growth potential of local startups.
Q: Do you think that the high startup cost in Hong Kong is discouraging local talents from launching their own businesses?
A: Startup cost for tech firms is high in many regions. A welcoming startup ecosystem is composed of several elements, such as the investor, government, and the startup culture. I think what’s more important is that we need to change the outdated belief on career choices, that professional careers such as lawyers, doctors are always preferable than technicians, engineers.
In recent years, we have had success stories like Lalamove, GoGoVan, and WeLab. But we can’t ignore the fact that the failure rate for startups is very high, which is over 70 percent. And what’s worse than failure is becoming a “Walking Dead,” or a “zombie startup,” which lacks a sensible business model and go-to-market strategy.
Q: Amid the startup race for innovation worldwide, what would be Hong Kong’s position in the global landscape?
A: Hong Kong should focus on the fields where the city has an edge. For example, we have an advantage in healthcare technology, as there are two outstanding medical schools in the city. Leveraging on Hong Kong’s legal system, the city can serve as a hub for helping products get FDA (US Food and Drug Administration) and CFDA (China Food and Drug Administration) approval, which is indispensable for stem cell and gene research technologies.
The number of biotech firms set up in HKSTP has grown four-fold to over 100, from about 20 initially, which is a showcase for the potential.
On artificial intelligence (AI), we have high-flying startups like SenseTime and Fano Labs. AI-powered technology can be put to various applications in the city, in sectors such as finance, insurance, and trading. I believe Hong Kong has the potential to develop in hot-button technologies such as AI, biotech, and blockchain.
This article appeared in the Hong Kong Economic Journal on March 2
Translation by Ben Ng with additional reporting
[Chinese version 中文版]
– Contact us at [email protected]