Greater Bay Area start-ups optimistic about revenue growth, according to observers, survey by HKTDC and HSBC

Survey polls 308 firms from sectors such as new economy, information technology and hardware, and biotechnology
Biotech start-ups were the most optimistic, with about 30 per cent expecting their revenue to double in the next three years

Greater Bay Area

Harvey Kong

Published: 5:30pm, 16 Nov 2021

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Start-ups in the Greater Bay Area were optimistic about revenue growth because of several favourable market conditions, according to industry observers and a recently released survey on the area’s ecosystem for such firms.

“More than two-thirds [of respondents] estimated that their revenue will grow in the next three years and this growth is relatively significant, ” said Nicholas Kwan, director of research at the Hong Kong Trade Development Council (HKTDC).

The joint survey by HKTDC and HSBC, which polled the founders of 308 firms from sectors such as new economy, information technology and hardware, and biotechnology, was conducted by HKTDC between August and September.

Hong Kong, Macau and nine cities in Guangdong province make up the Greater Bay Area, China’s ambitious plan to create a hi-tech economic zone to rival Silicon Valley in the United States. In October, Hong Kong leader Carrie Lam Cheng Yuet-ngor unveiled a series of initiatives in her policy address to bring the city’s development in line with Beijing’s bay area plan and its 14th five-year blueprint.

The survey also included in-depth interviews with 10 Greater Bay Area start-up founders, as well as representatives from start-up incubators and platforms. Among the respondents, 56.8 per cent were headquartered in Hong Kong, while 38.3 per cent were in other Greater Bay Area cities and 4.9 per cent had offices there.

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Biotechnology start-ups were the most optimistic, with about 30 per cent of respondents expecting their revenue to double in the next three years, according to the survey. It found that 71 per cent of respondents expected their revenue to grow more than 25 per cent in the next three years, with 18 per cent estimating that their revenue would more than double in the same period.

The Greater Bay Area presented several reasons for start-ups to be optimistic about their revenue growth, Kwan said. This may be due to its large market, relatively effective containment of Covid-19 and the rebounding economies of mainland China and Hong Kong, he added.

“The potential for developments in biotechnology to improve health care are more widely appreciated due to the pandemic, thus creating new opportunities for biotech start-ups,” Kwan said. “In addition, government and private funding are also paying more attention to biotech start-ups.”

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Phase Scientific, a Hong Kong-based biotechnology start-up producing medical diagnostic products, had sold millions of Covid-19 tests globally during the pandemic and was already benefiting from these factors.

“We are very confident,” Ricky Chiu Yin-to, its chairman, said, adding that he had high hopes as far as the company’s revenue growth was concerned.

The survey also found that more than 80 per cent of respondents will use Hong Kong’s services in the next three years, with banking being the most sought-after service. The city would serve as a platform for bay area companies looking to raise funds and expand overseas, Kwan said.

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The city’s financial expertise was an advantage when it came to developing hi-tech industries, such as biotechnology, as it allowed companies to access much-needed funding for their development, said Phase Scientific’s Chiu. “I absolutely agree that Hong Kong is the right place [for fundraising], and it will continue to be a good place to do that,” he added.

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