That hi in hi-tech is high cost and high risk
Among Asia's proverbial 'four little tigers' of the 1980s, Hong Kong remains the odd one out, still living in non-comprehending neglect of the power of technology. The city's puny size is no excuse for this staggering oversight; Singapore is smaller geographically and in population. Yet, determined to succeed, it has pulled out all the stops to lure technologically advanced multinationals and top-notch scientists.
Legislator Regina Ip, SMP, April 18
Let me tell you about that Singapore hi-tech effort, Regina. If you look at the first chart at the bottom here, you will notice that the technology sector on the Singapore stock market underperformed the rest of the market by almost 80 per cent between 2003 and 2008.
It brings to mind a pop song that I remember from the 1960s. The opening lines go, 'Tee-hee-hee-hee-hee-hee-wipeout'.
But I suppose you can point to the right-hand side of that chart and say this shows evidence of recovery. It is certainly what the Singapore government's Economic Development Board bills as 'Singapore's dynamic electronics industry is poised for further development'.
Fortunately for Singaporeans, it is only the Singapore government that believes it. As the second chart shows, the local share of investment commitments in manufacturing sank to less than 10 per cent of the total in 2007. The running was all foreign. The Singapore government then realised it had to something about these embarrassing statistics. It stopped publishing them.
It's curious how Singaporean bureaucrats seem to think they are in charge of a creche of pre-schoolers who need to be told what to do every minute of the day, when it is really those bureaucrats themselves who don't know where they are or what they are doing. Ordinary Singaporeans are not so stupid as to sink their money into technology. Only their government does that. Look up the sad history of Chartered Semiconductor some day. Ouch.
Let us be grateful that the only time someone tried to inflict a Chartered Semiconductor on us, our Donald knocked the idea stone dead. Semiconductor Manufacturing International Corporation went to Shanghai, instead. Ouch for Shanghai.
The only things that are hi in hi-tech, Regina, are high cost and high risk. The rest is all low as in low margins, low profitability and, when you think about it, low levels of skill. The machinery may be fancy but the bulk of the workforce is engaged in brain-numbing drudgery.
Singaporeans have long recognised it, too, which is why 35 per cent of their labour force is non-resident. You don't find any self-esteeming native-born Singaporeans sitting on the production line. The work is beneath them if they are not hired as engineers. Do we really want to go down the same road?
I happen to have some experience of this because Hong Kong had a brief fling with technology in the early 1980s while I was a securities analyst trying to find new ideas for our investment clients. I thought I would find them in a line of electronics stocks coming to the market just then.
Have you ever heard of Conic Industrial, Atlas Industries, Elec & Eltek, Wong's Industrial or Lafe Holdings?
Be glad you haven't. I wish I never had. The problem, however, lay not so much in the companies as in the fact that Hong Kong is simply not a suitable place for technology companies to thrive.
We do not have the land, the labour force, the skill set, the patents, the traditions and, most of all, the inclination. This is a trading city. People should stick with what they're good at doing.
Here is my idea. Let's turn the Science Park into government offices. It is eminently suitable, being about as remote from Hong Kong as it is possible to be. We shall also turn Cyberport over to sheep-grazing. The place is as deserted as Mongolia anyway.