Hong Kong must improve innovation and higher education if it is to enhance its global competitiveness, the Geneva-based World Economic Forum warned yesterday.
The non-profit foundation issued the advice in its annual Global Competitiveness Index report, which found that although Hong Kong moved up two places to rank seventh among 148 economies in overall competitiveness, in terms of innovation and business sophistication it was left languishing in 19th spot - trailing both Qatar and Singapore.
The index was formulated by combining 12 categories of 114 indicators, which measure the economies' institutional quality, infrastructure, health, education, market efficiency and innovation. The figures were obtained either from a survey of 13,638 executives around the world or international organisations.
Switzerland, Singapore and Finland remained the top three in terms of overall competitiveness. Mainland China was 29th.
Hong Kong topped the world in terms of infrastructure and financial-market development, with the report praising the "outstanding quality of its facilities across all modes of transportation", the "high level of efficiency, trustworthiness and stability" of the financial system, and the "dynamism and efficiency of the goods and labour market".
But in terms of education and innovation, Hong Kong trailed behind major economies in the region. Hong Kong ranked 23rd in innovation, up three places from last year - but still behind Singapore (9th) and Taiwan (8th). It ranked 22nd in terms of higher education and training, a category in which Singapore ranked second and Taiwan 11th.
"In order to enhance its competitiveness, Hong Kong must improve on higher education and innovation. In the latter category, the quality of research institutions and the limited availability of scientists and engineers remain the two key issues to be addressed," the report says.
Economist David Wong Yau-kar, the chairman of the Business and Professionals Federation think tank, said the ranking reflected the urgent need for a broad strategy to encourage technological innovation.
"Korea, Singapore and Taiwan were successful because they have a grand policy back-up and government investment."
A spokeswoman for the government's Innovation and Technology Commission said it had been "adopting a multi-pronged approach in promoting research and development as well as technology transfer", with HK$314.9 million in research funding provided to five government R&D centres in 2012-13.