Jake's View

Hong Kong’s innovation ranking slips to record low. So what?

This city has reinvented its economy successfully over 150 years, and its sole dalliance with high-tech during the 1980s was brief and forgettable.

PUBLISHED : Wednesday, 21 June, 2017, 2:01pm
UPDATED : Wednesday, 21 June, 2017, 11:18pm

Hong Kong has slipped for the fourth year in a row in a global benchmark of innovation, ranking 16th – its lowest ever position – SCMP, June 16

Hurrah, say I. Here is evidence that we continue to reject the curious notion that human innovation is restricted to applying for patent rights to fancy digital toys.

Don’t get me wrong. I am mighty impressed with the products of the digital world. How glad I am of this laptop in front of me; when writing for a newspaper used to mean inserting four sheets of copy paper separated by carbon papers into a mechanical typewriter, tapping out a few paragraphs and then doing it again.

How glad I am of the web; when research in the news business used to mean asking the clerk in the newsroom library when the clippings file on any given company might be returned, assuming it ever would be.

I am a direct beneficiary of digital innovation. I don’t deny it and I would not want to do without it.

But what makes anyone think that human ingenuity can only reach its pinnacle in digital innovation, or that it is the only way for the Hong Kong economy to keep growing?

We have never relied on it yet, to become one of the world’s wealthiest economies. Hong Kong’s success is built on doing what mainland China cannot do, or the mainland Chinese authorities will not allow, until they do allow it and can do it; at which point Hong Kong goes on to do something else.

This has meant going from drug trafficking to agency trade, to shipping, to garment making, and most recently, to business services.

How more innovative can any population be than one that has completely reinvented the basis of its economy four times over the last 150 years and made a big success of it every time?

I can only recall one time previously that serious attention was paid to trying high tech. That was in the early 1980’s and involved names such as Conic Industrial and Atlas Industries.

Be glad you don’t remember them. They were a shambles of false hope in short term sales opportunities masquerading as high-level research.

Fortunately, it was soon over and Hong Kong has not suffered as much as Singapore has done with such giant disappointments as Chartered Semiconductor, or with almost total reliance on foreign investors who then consistently bleed the Singapore economy by repatriating their winnings.

Hong Kong trails rival Singapore in Asian Competitiveness report for third year running

Even Taiwan and South Korea, the centres of Asian high tech over the last 30 years, have found hard going in their hopes of becoming the new Silicon Valley.

The ideas are leading ones, but the earnings lag. High tech is magic. Touch it and your money disappears. Why do we want it?

Yes, I know that Facebook, Amazon, Netflix and Google (the FANGs) appear to set an example as the leaders of the American stock market, but they do so for reasons of deluded speculative interest. They are borne aloft by hot air, not their earnings.

What I have in mind when looking at them, is such names as America Online, Qualcomm and Cisco, the darlings of the 1999 Internet bubble. My memory is of the dismay little more than a year later of some people I know who held such stocks. The FANGs have even less to support their share prices.

But our bureaucrats just don’t see it. They just keep talking high tech and throwing our money at it in subsidies to perpetuate yesterday’s ideas of digital wizardry, which just suppresses prospects of any real creativity across the entire spectrum of human ingenuity.

We have also been told in this latest foreign academic study that our standards of education are low and must be improved. This when 30 per cent of our work force holds degrees from tertiary institutes of education, far more than the job market requires.

Even this assumes that a full university education is required for high tech when a disproportionate number of the most successful people involved in it are university drop-outs and when the production side of it mostly needs only low-paid technicians.

But, hurrah, we have evidence that our entrepreneurs recognise all this. We have declined further in yet another innovation ranking. Let us all rejoice.