Official struggles to explain city’s culture of innovation
Hong Kong’s high and unhealthy level of economic concentration stifles any need or desire to change
Confronting leading bureaucrats with inescapable, self-evident truths was in full force on Michael Chugani’s TVB show “Straight Talk” on Wednesday.
It nearly turned into a local version of the BBC’s “Hardtalk” when he collided head-to-head on with Nicholas Yang, Secretary for Innovation and Technology, on technology and innovation policy.
Chugani accused Yang of living in a bubble when he asked what was the point of trying to encourage innovation and entrepreneurship in Hong Kong.
“It’s too late,” he said.
The city is owned and run by a cabal of property developers who have their foot on the throat of people and they do not want the economy to change.
Introducing innovation culture in Hong Kong has about much chance as Hong Kong achieving independence.
Li Ka-shing and the other 10 richest people in Hong Kong have a combined net worth equivalent to 35 per cent of its economy, compared with 5.2 per cent in India and 1.4 per cent in China, according to Bloomberg.
While that doesn’t necessarily prevent access to venture capital, such a high and unhealthy level of economic concentration stifles any need or desire to change.
Overcoming Hong Kong’s intellectual bankruptcy and poverty is Yang’s mighty challenge.
But, like any well-qualified academic he is overdependent on academic institutions.
In this tech wave, almost every successful founder is a college drop out and certainly not a professor.
The success of social media and instant messaging companies shows that innovation is occurring outside of universities. The only way to learn about a start-up is to work in a start-up.
Yang said his main objective was to build an ecosystem between China and Hong Kong for innovation and commercialisation.
Innovation is interpreted differently between China and America. No doubt China has made major strides commercialising and finding new applications for existing inventions like instant messaging through platforms such as WeChat.
China has a key advantage in commercialising technology because of its massive user base. America leads in channelling creativity because its ecosystem of entrepreneurs and financiers are perfectly synchronised after decades of technology cycles. And it is a free society.
But the urgent question for Hong Kong is “can its people even recognise innovation?”
No one in Hong Kong could see the value of WhatsApp when it was developed in 2010. Our entrepreneurs and investors have to hone a measure of wildly creative, intellectual freedom to invent or back something new and radical. Otherwise, we will be dependent on China, who ostensibly does not need Hong Kong.
Certainly no one in Hong Kong saw the potential for DJI’s drones.
While Yang boasted that Frank Wang attended HK University of Science and Technology, the latter certainly didn’t receive much help from them or Hong Kong venture capitalists in his early days.
His business was largely funded and built in Shenzhen where he was more welcome.
HKUST’s problem is that is actually better known for its MBA programme than technology.
Commercialising products is vastly different than creating new ideas. The latter requires a high level of intellectual freedom and tolerance for failure. And intellectual freedom means the absolute ability to say or think about things that people don’t like.
Unfortunately, the bookseller kidnapping incident has exposed dangerous and corrosive implications for freedom of thought and expression in Hong Kong.
That anyone can be “disappeared” in Hong Kong for displeasing the wrong, powerful people is a dangerous omen in a free society.
That our business elite thinks that society only needs enough freedom to make money, only works if you sell your political soul.
Developing projects in Hong Kong for China has one big unresolved problem: Hong Kong companies need a mainland partner to operate in China.
This creates a huge risk for intellectual property theft. While mainland companies can freely operate in Hong Kong, Hong Kong companies cannot operate in most China industries without a local joint venture partner. This needs to change if Hong Kong is to realise any benefits.
Being an entrepreneur is a quixotic pursuit, a quest for your true and only heaven, a risky personal crusade. Hong Kong business culture values speculative smarts like winning at Happy Valley race course not quirkiness, inventiveness or doing something “insanely great”.
No one knows how and when this will change.
The German philosopher Nietzsche said: “All great things must first wear terrifying and monstrous masks in order to inscribe themselves on the hearts of humanity.”
They seem unsettling, perhaps terrifying. That is how new ideas and truths initially appear to be. And in Hong Kong we have to overcome certain hard truths before we can experience genuine renaissance.
Peter Guy is a financial writer and former international banker