Google Chairman Eric Schmidt has one suggestion for the Hong Kong government on how to make the city remain competitive – to open more technical universities, thereby attracting more software engineers, rather than more bankers.
Schmidt, who was visiting Hong Kong on Monday to announce a partnership program with the Chinese University of Hong Kong in a bid to boost the number of local young entrepreneurs for start-up businesses, told the South China Morning Post in an interview that many of economic problems that Hong Kong is now facing - including high rents that kill many local small businesses - are not unique and that other global cities face the same challenges.
To solve the problem, he urged the government to create more technical universities to help local businesses make better use of cutting-edge technology. Meanwhile, Hong Kong’s small businesses also need to find ways to grow in order to compete with bigger businesses, said Schmidt.
“The problem about small shops is that a small shop was not an entrepreneur company but just a small company and it was not growing. People often get confused over this. You don’t want small businesses. You want fast-growing businesses, a chain or something,” said Schmidt, whose firm will work with CUHK to help young Hong Kong entrepreneurs to “overcome the start-up costs and isolation that come with high rents”.
“In America, there’s always a concern that the drug store is replaced by the luxury shop but the real problem is the drug company needs to become bigger. They had to do something and they didn’t and ultimately they were replaced by something which can afford the higher rents. You have to grow or you basically die,” said Schmidt whose firm Google was set up by two people and now is the world’s No1 search engine.
When asked to comment on Hong Kong’s growing social discontent over the so-called “real estate monopoly” where many young people believe major developers in Hong Kong occupy too many economic resources in the city, Schmidt said: “If you create a big enough company, they have to deal with you. If you can only do a small company that will not grow, well, then you won’t have a lot of power to deal with the tycoons.”
“The tycoons did the right thing because they wanted to be bigger. The little company wanted to be bigger too but they just didn’t do it. So as long as the rules are clear, as long as there is no corruption, it strikes me as a fair and clear answer,” he added.
But Schmidt also noted that the government must act to change Hong Kong’s reliance on the financial and real estate sectors.
“I think there is a shortage. Hong Kong needs more technical universities and attract more global technical students,” said Schmidt, a software engineer-turned business leader in the technology industry.
“The government should try to get more technical people in the universities. What are the other industries in Hong Kong now? Finance and property. In America, people are not going to the banks. They are going to the technology companies. The reasons why they do this is the banks’ jobs are not interesting. It is just a mess after the crisis,” said Schmidt, referring to the 2008 global financial crisis that first began on Wall Street.
“Facebook started with four guys. Google started with two people. There’re lots of engineers in California. Why are there not lots of engineers in Hong Kong?” said Schmidt. “Hong Kong can be the destination for the next generation of technical people who want to do the Asia solutions. They don’t want to live in Beijing because they can’t breathe the air. They don’t want to live in Shanghai because it’s too big.”