Challenging path to technological success

PUBLISHED : Monday, 19 January, 1998, 12:00am
UPDATED : Monday, 19 January, 1998, 12:00am

I wholeheartedly agree with David Chu's article 'An Asian answer to Silicon Valley' (South China Morning Post, January 8).

Hong Kong is one of the most expensive cities in the world in which to live. As such, it can no longer rely on low-margin manufacturing businesses.

An over-reliance on the service industry, and in particular the finance industry, over-exposes us to the cyclical turmoil of this business. A high-margin, value-added industry is sorely needed.

I can, however, foresee many problems in trying to get this going in Hong Kong, the biggest of which is investment philosophy.

There are relatively few venture-capital firms willing to supply capital to start up businesses in Hong Kong. Here, investors tend to be less patient and demand quick returns.

The speculative fervour that has dominated the local stock and property markets until recently points quite clearly to this problem.

There are no true industrialists in Hong Kong. Most of the super rich created their wealth from real estate development - an activity that does not generate any real income for the economy.

I also worry about the competitiveness of Hong Kong's businesses. Out of the hundreds of companies listed on the stock market, how many can actually compete effectively on a global scale? The presence of cartels in many business sectors, and the weak anti-monopoly legislation has created high prices for consumers while reducing business competitiveness.

The businesses that Mr Chu mentioned in his article are characterised by intense competition, rapid technological changes, and short product cycles.

I don't believe there are too many local managerial talents capable of running such companies.

Another problem is the lack of technologically gifted people. In the case of the United States' Silicon Valley, for example, its success is based in part on its proximity to the institutions of higher education in the surrounding areas. These have been the Valley's life blood, providing the ideas and the engineering talent to create new companies.

In order to replicate this success, Hong Kong must rethink its priorities in education.

Right now, our schools are still better at producing graduates filled with knowledge obtained by rote-learning, rather than free-thinking creative minds. Opportunities for research in universities have improved, but are still poor.

Our Government, despite being one of the world's richest, spends less money on education than that of almost any other developed country.

We must also improve our living environment to attract the best and the brightest to come and help us fulfil our dream.

This means affordable housing, clean air, clean water, open space and other amenities that are now lacking.

All this will take a tremendous effort by our Government and business leaders, but ultimately, it will prove to be the best investment one can make.

ADRIAN YOUNG YUEN-WU University of Hong Kong David Chu must be kidding when he suggests the creation of a Silicon Valley in Hong Kong.

The real Silicon Valley is a rare if not unique environment dependent on innovation and close co-operation between excellent research universities, patient venture capital, and hi-tech industry. Which of these elements is present here? The success of Hong Kong is built on trading and property - that is buying an existing asset and selling it for more. Trying to invent a research culture where none exists will just waste taxpayers' money.