HK in pole position as it seeks Silicon Valley status
Universities, legal and social framework all in place for HK but banks, businesses need to change mindset, Peter Liang writes
In the drive for innovation, many aspiring technical centers in this region are trying in one way or another to replicate the success of Silicon Valley in California. Some of the attributes — particularly a large pool of talents from some of the world’s top research universities around San Francisco — that created such techno giants as Apple and Google are well known. But other advantages, which are of equal importance, have mostly been ignored by admirers from abroad.
The government is correct to have identified technology industry development as one of its most pressing policy initiatives. In addition to investing public resources in encouraging entrepreneurship, the government efforts have received a major boost from the Guangdong-Hong Kong-Macao Greater Bay Area initiative, giving Hong Kong a bigger role to play on a much larger stage.
In recent years, many political and business leaders have spared no effort in criticizing Hong Kong for falling behind other regional economies in technology development. That’s because money can be made much more easily and quickly in finance and property. Some educators have noted that the faculties of science and engineering have lost out to finance and business in competing for talented students in universities.
Furthermore, entrepreneurship in technology industry has been greatly curtailed by the lack of financial support from traditional banks which prefer to lend against property collateral. Venture capital funds never catch on among investors who are used to investing in financial and property stocks that have solid earnings records.
The question is, what can Hong Kong offer to the development of the technology industry in the Bay Area initiative? The answer lies in Hong Kong’s economic and social environment, which is distinctly different from that on the Chinese mainland and most other Asian economies.
It is well known that many successful Silicon Valley entrepreneurs failed many times before succeeding. Accepting failure and declaring bankruptcy are common in the tech industry and don’t necessarily reflect badly on the people going through the process, or their credit standing among lenders.
The bankruptcy law in Hong Kong has evolved over the years to take into account the increasingly complex risks in doing business. To be sure, the social stigma associated with bankruptcy dies hard. But the business community has become much more forgiving of those who sought court protection from their creditors.
Another factor that makes Hong Kong a natural choice for research and development is the law that provides adequate and credible protection of intellectual property rights. More important is that the law is vigorously enforced by vigilant and experienced customs officers.
Another layer of protection is provided by the police commercial crime unit and the Independent Commission Against Corruption. Their past efforts have greatly helped discourage theft of sensitive information by insiders or industry spies.
Understandably, access to the latest information is of paramount importance to the entrepreneurs, researchers and designers in the technology industry. They do not need just technical information, but also to keep abreast of the latest market trends and fast-changing consumer tastes in the global marketplace.
In this respect, Hong Kong has remained unmatched among most neighboring cities. The internet is truly free in this business town where access to information is a right rather than a privilege.
Hong Kong was once derided as a cultural desert even when Cantonese movies, television dramas and songs, yes, those Cantopops, dominated the regional entertainment industry. It is now called a technology desert.
Regrettable as that may sound, Hong Kong is poised to leverage its advantages to play a big and vital role in technology development in the region.