Why Hong Kong must step up focus on creative industries

May 25, 2016 09:37
Hong Kong government has promised to inject HK$400 million into a "CreateSmart" Initiative to help develop local creative industries. Photo: Hong Kong Design Institute

Forecasts for Hong Kong's economy have been bleak lately, keeping the doomsayers busy. With the traditional growth engines of real estate, retail and tourism all taking a hit in recent months, the future does indeed look uncertain.

But one need not lose hope. There is something that can provide a way out of the gloom: creative industries. 

Around the world, economic activities that create, produce and distribute goods and services in the name of culture are becoming more important. Broadcasting, music, film, animation and online game industries are now driving and sustaining growth in many countries.

Creative industries are nothing new to Hong Kong. The city was once Asia's leading producer of film and Cantopop. Although it has been eclipsed in the last two decades by competition from South Korea and Taiwan, creative industries remain an important sector of our economy.

According to government data, the cultural and creative industries employed 210,000 people in 2013 and accounted for about 5.1 percent of the local GDP.

The government is right in making creative industries a priority. In his budget speech this year, Financial Secretary John Tsang Chun-wah acknowledged that Hong Kong’s creative industries are well-established, and that they are blessed with immense potential and a wealth of talent.

To underline his continued support, Tsang promised to inject HK$400 million into a CreateSmart Initiative to help develop local creative industries and nurture start-ups and new talent.

Yet despite those good intentions and the promise of considerable public resources, questions remain over whether the government’s policies are effective and sufficiently focused.

The School of Journalism and Communication of the Chinese University of Hong Kong has carried out a series of studies and surveys, which include interviews with industry leaders, on how creative industries operate in leading markets.

We found that the governments of these countries share a common trait: they all recognize the importance of promoting creative industries as an engine of economic growth and a potential source of considerable economic returns. They also see creative industries as a means of producing cultural goods that can be exported as soft power.

The Chinese University research team has identified two successful approaches that governments adopt to support creative industries.

First, a government should establish a central authority to provide sufficient policy, legislative and financial support to cultivate creative industries on a long-term basis. Second, attractive terms should be offered to induce foreign creative industry leaders to set up business in the locale, and to pass on their knowledge to emerging local talents.

So, how does Hong Kong size up? While the government has set up Create Hong Kong under the Commerce and Economic Development Bureau, its roles and functions are restricted to offering co-ordination among departments, providing match-making between investors and implementers, and sponsoring a handful of annual events.

The office has a limited policy role and is not strong enough to propose or formulate legislation that is conducive to the healthy development of creative industries. The establishment of the Innovation and Technology Bureau last November offers impetus for change, but policies on developing local creative industries remain squarely in the court of the Commerce and Economic Development Bureau.

Compare this with other players in the region, where the setting up of dedicated authorities to promote creative industries appears to be the norm.

Singapore set up the Media Development Authority in 2003 to promote the development of broadcasting, film, publishing, animation, interactive media and games industries through various grants and schemes.

In South Korea, the Korean Creative Content Agency (KOCCA) was established to oversee the advancement of creative content produced locally. The agency covers a wide range of Korea’s creative industries, including gaming, animation, character licensing, music, fashion, and broadcasting.

KOCCA actively advances these industries via production support, marketing and promotion, global expansion abroad, human capital development, and cultural technology implementation.

In terms of funding support, countries such as South Korea and China offer rebates for export of cultural content. The Singapore government has earmarked a total of US$156 million over a five-year period to develop the media content sector, on top of the US$340million it has devoted to interactive digital media research and development. Earlier in 2009, the city-state's Media Development Authority launched the US$50 million Singapore International Film Fund.

If creative industries are to become an engine of economic growth in Hong Kong, the government needs to revamp the whole institutional framework and grant it the necessary authority and funding to make the system work more effectively.

As for the second approach, the Chinese University research team found that foreign industry leaders could help create an environment where local talent can be groomed and new technologies promoted.

In the case of China’s online game industry, provincial and state governments not only provide detailed guidelines and supervision of products, they also offer funding and develop industry clusters for the aggregation of related businesses, expertise and financing facilities.

Overseas game developers or software companies may outsource part of their production process to mainland Chinese companies by taking advantage of this favorable business environment.

Meanwhile, in Singapore, foreign companies that are offered tax rebates and cheap working studios are obliged to hire a certain percentage of local talents. The idea is that this will help build up a local pool of expertise and promote the long-term development of the city-state's creative industries.

The Hong Kong Science and Technology Park does offer incubation program and incentives for technology start-ups and overseas ventures, but the support tends to be short-term and rather piecemeal.

If the government wants to encourage more overseas investors to set up business in Hong Kong, it needs to be more imaginative.

For instance, it could offer rebates or tax concessions for successfully marketed products, or provide long-term free rentals to ventures that recruit and train local talents. These measures would allow the level of local expertise and technologies to build up in time.

As it grapples with the global economic downturn, Hong Kong is again at a crossroads. It must restructure or face being outsmarted by regional players. Business operators and policy makers need to stay vigilant, both to fend off risks and to harness new opportunities.

Creative industries can bring considerable economic returns and can also help expand Hong Kong’s influence in world markets. The government should seize this golden opportunity.

-- Contact us at [email protected]


Professor and Director, School of Journalism and Communication, The Chinese University of Hong Kong