Hong Kong's government needs to support its startups
If Hong Kong wants to continue its meteoric rise as an international city of commerce, its government needs to get behind startup culture. This may come as a surprise to some that a world-renowned city with powerful pull in nearly every sector from finance to entrepreneurship has yet to embrace the startup scene. In fact, it is well-known internationally among startup groups that despite the seemingly indefatigable amount of capital available in Hong Kong for investment, the amount of startups lags far behind other places like Israel, Taiwan, Singapore, and mainland China. Here’s why, theHong Kong government should support startups.
Hong Kong was founded in 1839 by the British as a Crown colony. Under the auspice of the British Crown, Hong Kong became a prime business hub centered on trading-and-arbitrage. The effect of this colonial era status quo still ripples in Hong Kong to this day. Under the British banking practices established in the late 1830s, a culture of managers relying on short-term loans developed. This directly conflicts with the idea of startups because startups are typically viewed as long term investments. In fact, even if an investor did want to break the tradition of the short-term loan based economy in Hong Kong, there are no real legal benefits for them to do so. For one, there are few tax deductions for investors who desire to engage with startups as compared to other major startup hubs.
Hong Kong government lacks independent investment vehicles that are able to play in the long-term startup game
For Hong Kong to become a leader in startups, the government needs to get with the times and be open uncertainty. Hong Kong government lacks independent investment vehicles that are able to play in the long-term startup game. In fact, the Hong Kong government’s take on startup culture could even be described as lackluster. In the past, the government dabbled in matching loans to small entrepreneur investors, but did little promote the endeavor. Because of this, they failed to attract outside investors, which caused government bureaucrats to turn their backs at the idea of startups.
One way startups can help push the Hong Kong government into supporting them is by coming together as a community. Startups are, understandably, notoriously self-involved. If the Hong Kong startup community came together just a little bit in their quest of validation with the Hong Kong government, who knows what amount of venture capital they could pull to the city.
Hong Kong has all the resources to be a big player in the startup world. If it does want to get involved it needs to start implementing the government infrastructure and incentives to reel the industry into its shores. And if startups are serious about having Hong Kong be a homebase, they should start to push harder for all that, too.
