Declining competitiveness bodes poorly for Hong Kong

It is a matter of particular concern for Hong Kong that the city has slipped further by two notches to No 9 in the Global Competitiveness Index compiled by the World Economic Forum. All the more worrying is that the city would have been well out of the top 10 were it not for its high score in infrastructure.

Ranked No 1 for the seventh year, Hong Kong’s world-class infrastructure has effectively helped buffer the city’s slide in overall global competitiveness. This was a real smack in the face for Hong Kong’s so-called “pan-democrats”.

For years, the lawmakers from the opposition camp have been fond of filibustering against almost every major infrastructure project proposal the SAR government managed to put forward to the Legislative Council.

They were particularly obsessed with obstructing mega projects that aim to further economic integration between Hong Kong and the mainland, branding them “white elephants” when in fact these projects help boost the city’s competitiveness.

The biggest drag on Hong Kong’s overall competitiveness comes from its underperformance in innovation, in which the city ranks only 27 th globally. This should have surprised no one.

For years or even decades, the local property market has remained a very lucrative business. It has helped breed a “makea-quick-buck” mentality among Hong Kong business people. As a result, business people in the city, particularly those tycoons who initially made their great fortune in real estate and are still reaping huge profits from selling flats, find no incentive at all to promote innovation and technology. After all, innovation and technology require huge investments; and these most probably bear fruit only years after, or worse, not at all.

Unless Hong Kong’s business people shake off their “make-aquick-buck” mentality and make great efforts to catch up with rivals in terms of innovation and technology, the city can expect its global competitiveness ranking to slide further down in the future.

Innovation and technology have long become the new engines of economic growth and competitiveness worldwide. Declining competitiveness due to weak innovation and technology capacity bodes poorly for Hong Kong’s economic future.