A GATEWAY TO CHINA
“IN THE FUTURE, INNOVATION WON’T BE ABOUT SHUTTING THE DOORS AND DOING YOUR OWN RESEARCH IN YOUR LAB OR UNIVERSITY OR COMPANY OR EVEN COUNTRY. IT’S INCREASINGLY ABOUT COLLABORATION AND SPARKING IDEAS BY THE MEETING OF MINDS.”
H ong Kong is also on a path to diversify its economic base from the activity around financial services and Hong Kong Science & Technology Parks is at the forefront of this effort. “In the 60s and 70s we were the biggest exporter of toys,” says Allen Ma, Chief Executive Officer, Hong Kong Science & Technology Park. “From being a world leader in light industries, we began to lose our competitive edge with China starting to open up and build their economic systems. Most of the factories began moving into China and expanding further inland,” he remembers. Around the turn of the millenium, the government decided that it needed to embark on a new industrialisation policy that attracted MNCs and SMEs alike and helped redefine what businesses Hong Kong wanted to be in with the use of innovation technologies. And thus the HKSTP was born. Beginning as of this year, the massive STP completed Phase 3 of its expansion and now manages the STP, three industrial estates, a design centre and three incubators, all next door to each other but with their own unique mandates.
The HKSTP broadly functions around seven technology clusters - semiconductors, ICT, green tech, biotech, precision engineering (which has been expanded to include new materials), design and industrialisation. “They form the basis of how we run the businesses,” Ma says. Quite contrary to what you would expect, the STP seems to have adopted a certain amount of laissez-faire policies. “The government, though it is the single largest shareholder in the tech park, doesn't in any way dictate how it is run. We are not directed to invest in certain sectors and neither are we told about what kind of companies we should accommodate. We are run like a private entity with a board of 17 members (only one of whom is a government representative) made up of reputable businessmen, professors and research specialists we invite. They do standard compliance, approve accounts and big expenditures, the appointment of the CEO, review strategies recommended before implementation,” he says. Because they use the tax payers' money, Ma says full transparency is essential in their operations.
But this is where the similarities end. “An STP shouldn't be run like a normal business where it works towards maximising profits
for shareholders. STPs are for the long term. Success isn't measured in terms of money but by the talent we nurture and our impact on the ecosystem. Though a proper KPI needs to be agreed upon at the board level, the STP should be under no pressure to produce short-term profit at the expense of the long-term mission by being forced to make decisions that are not optimal.”
While Ma says no conscious effort was made to balance out the mix of companies at their tech park, it naturally came to a certain equilibrium. Now about 40% of their companies are foreign-based. “This ratio is important, however, when considering that overseas companies bring new thinking and connections. R&D is about brain power and ideas and collaboration which helps your own businesses grow overseas.” Hong Kong has been a magnet for MNCs for several reasons. “We have a wonderful cosmopolitan culture, the compactness lends itself to the ease of doing business, strong IP regulations, no ceiling on remittances in and out of the country, and a transparent rule of law based on British systems. Foreigners who come here adapt easily because of the high standard of living,” Ma points out. And why is this important? Because of China. “Hong Kong's appeal comes from the access it provides to the Chinese market. Companies around the world are looking for entry into the second largest country by GDP and the easiest way to understand business in China is to come to Hong Kong. The commute between us and southern China is short and easy. There are plenty of manufacturing facilities in and around us with a supply of cheap labour and a growing middle class that is an eager consumer of global products. Which is why we offer a soft landing programme at the STP where companies stay and learn about doing business in the People's Republic of China. Most companies establish their Chinese headquarters in Hong Kong, with IP registration, research and core decisions being made here,” he says.
But within the STP, the focus is on creating an environment that is conducive to innovation for MNCs and SMEs alike. While the incubation programmes have been tailored to meet sector-specific needs, the companies can easily find suppliers and customers among its tenants. "But more importantly, we facilitate the meeting of like-minded people with plenty of networking activities, offering shared labs and opportunities to partner with our universities (all of whom have labs in the STP) to jointly work on research projects. The universities' technology transfer office licenses their IPs to companies which discover greater values in them when put together with a family of IPs.”
It is little details like these that have catapulted the South East Asian region to the lead of the innovation curve. Ma paraphrases Steve Jobs about being hungry and curious. “The region's stellar economic progress is relatively recent. Thirty years ago many still had very low GDPs. I feel this is because the people of the region are by nature hungry for a better quality of life. This is coupled with an innate sense of curiosity; we want to learn and are constantly searching for answer to things we see. These have been the driving forces among our younger people. But there is something that is holding us back still – our reluctance to think differently. We tend to stick to the mainstream and parents seldom allow their children to go off track. But we shouldn't be afraid to think wildly because that is how the best ideas of innovation are created,” he says