HK must have a broader outlook on development
Zhou Bajun discusses the ways in which the SAR can overcome the many challenges brought about by the ‘fourth sci-tech and industrial revolution’
The endeavor to build an international innovation center in the Bay Area requires close collaboration among Hong Kong, Macao, Guangzhou and Shenzhen — the four major cities in the region — in both fronts of research and development and manufacturing.
In the first month of 2019 Hong Kong was distracted by some issues concerning people’s livelihoods. Now that the SAR government has taken remedial measures in response to popular demand, it must now bring public attention back to the bigger picture of overall development.
When Hong Kong was celebrating the Lunar New Year - the Year of the Pig - the federal government of Germany announced its National Industrial Strategy 2030 (NIS 2030) on Feb 5. Peter Altmaier, minister for economic affairs and energy, said clearly that the federal government would step up assistance for efforts to develop Germany’s and Europe’s leading enterprises; while working harder on protecting the country’s key industries from acquisition by foreign businesses or fierce competition in order to maintain local employment in Germany. The NIS 2030 suggests that, when necessary, the federal government may acquire stakes in companies of strategic importance to Germany to prevent them from being acquired by foreign investors. To do so the federal government is considering setting up a fund.
Some readers may wonder what Germany’s NIS 2030 has to do with Hong Kong. My answer is the fact that the SAR government is pushing for innovation and technology development in Hong Kong and jointly building the Guangdong-Hong Kong-Macao Greater Bay Area into a world-class inno-tech center with Guangdong and Macao.
The NIS 2030 reflects Germany’s worries in two aspects of economic development: Almost no new corporate giants have emerged in Germany for a long time; and the country cannot afford to miss out on the “fourth sci-tech and industrial revolution of the world”.
Germany used to have quite a few world-leading major companies, such as AEG and Grundig, but they have lost their leading positions. The NIS 2030 believes many world-leading major enterprises have emerged in the United States and China in the last 20 years. This is why the federal government must take policy measures to encourage the development of new world-leading companies in Germany as well as the European Union.
Humanity is in the midst of the fourth sci-tech and industrial revolution. The German government points out in its NIS 2030 that electric automobiles, digitization and artificial intelligence are among the most innovative inventions since the steam engine and promise an immense future. If Germany fails to seize such opportunities for economic development it would become a work station for other countries. Germany must become a designer instead of a bystander and play an important role in the fourth industrial revolution. It has also set the goal of raising the contribution of new industries to its GDP to 25 percent and 20 percent to that of the EU in the year 2030.
Hong Kong is also faced with similar challenges which are concerning Germany. For a start, Chief Executive Carrie Lam Cheng Yuet-ngor introduced policy measures in her first Policy Address to push for innotech development in Hong Kong, but relevant policy bureaus of the SAR government have yet to present a well-defined blueprint showing what new industries will be given priority. So far there is only the intent but no detailed policy measures. Then there is the reality that Hong Kong does not have an inno-tech giant of international renown yet, let alone a world-leading one. The SAR government has yet to show any intention to fill in the blank with policy measures.
The SAR government has taken steps to alter the long-established “positive non-interventionism” originated in the 1970s, but more has yet to be done. Successful experience tells us that, whether it was in the third sci-tech and industrial revolution in the 1970s or the current one, it requires the government to provide both policies and funding to enterprises and the market to generate the desired outcome. Thanks to the positive non-interventionism, Hong Kong has failed to jump on the bandwagon of the third sci-tech and industrial revolution. This has resulted in an unsound industrial structure and a lack of high-tech industries and corporate giants. Such unsuccessful experiences cannot be repeated in the fourth industrial revolution.
The robust development of hightech industries must be incorporated into the Bay Area development. The creation of an international innotech center will require the presence of world-class universities and research institutes. Hong Kong is well-positioned to contribute to this. Nevertheless, due to its scarce space, small population size and limited scale of the economy, it is difficult for Hong Kong to build on its own a cluster of world-leading enterprises, which is a necessary condition for creating the international inno-tech center.
Nowadays, there is a division-of-labor viewpoint in Hong Kong that the scientific research and development should take place in Hong Kong while industries should be built on the mainland. However, this viewpoint is not in line with the pattern of the third sci-tech and industrial revolution, and is totally detached from the fourth one.
The division of labor in the first and second industrial revolutions was characterized by national borders and boundaries. The third and the fourth ones that came one after the other have already transcended border restrictions so that division of labor is no longer defined by borders. The endeavor to build an international innovation center in the Bay Area requires close collaboration among Hong Kong, Macao, Guangzhou and Shenzhen — the four major cities in the region — in both fronts of research and development and manufacturing.