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Successful start-ups like Xiaomi, known as the Apple of China, are rare in Hong Kong. Photo: EPA
Opinion
Mr. Shangkong
by George Chen
Mr. Shangkong
by George Chen

HK needs more risk-takers to nurture start-up culture

Sky-high property prices shouldn't be an excuse for the lack of an innovation culture in the city

Is the younger generation in Hong Kong unwilling to take risks to start their own business these days? This is clearly one of the strongest arguments that I have heard in the debate on why we haven't seen the next big thing like Xiaomi, known as the Apple of China, in Hong Kong.

The typical local success story we often hear is how a bright young student goes through several rounds of interviews at a big developer or bank and lands a job there with a starting salary of more than HK$1 million a year. And they will try their best to climb the corporate ladder.

Is there anything wrong with this conventional career path? Of course not. Does the student miss anything by being a salaryman? Probably a lot.

It's a tough choice between getting a stable income from a big corporation and starting your own business. The success rate for start-ups is extremely low. By some estimates about 90 per cent of start-ups eventually fail. The other 10 per cent won't succeed from the first day as all start-ups, including Xiaomi and JD, known as China's Amazon, went through tough times.

There are also cultural differences between Hong Kong and Silicon Valley in the US, home of many successful start-ups over the past decade. Many young people in Hong Kong often make safe bets for their career by majoring in finance and law at local universities in the hope they can get into big law firms and banks so their families will be proud of their achievements.

"In start-ups, people learn as much from failures as success, and sometimes more," said Michael Hampton, who manages discussion panels on the website GeoExpat.com "The culture has to be forgiving of failure and Hong Kong is not very good at that."

For many years, Hong Kong has been searching for the next Li Ka-shing, the city's richest man who dared to make a difference by starting his first plastic-flower factory and later moving into port and property businesses. In recent years, Li has become more like a counter-productive icon of innovation for others because it seems nowadays we can blame high property prices for almost everything.

Many readers responding to how Hong Kong can host the next Facebook or Alibaba blame the so-called property monopoly for the high cost to rent an office or shop. But many US start-ups started in small garages or dormitories. The mindset for start-ups must be changed in Hong Kong. Yes, property prices are insane. On the other hand, what Hong Kong needs more urgently is creative business and innovative ideas.

Simon Squibb, chief executive at Nest.vc, said Hong Kong must move from its old-fashioned service-based economy to a knowledge-based economy. To make this transformation happen, start-ups are the answer.

 

This article appeared in the South China Morning Post print edition as: HK needs risk-takers with new ideas
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