Why the internet of things represents a golden opportunity for Hong Kong
The arrival of the Apple Watch in stores may herald the first hands-on experience with the internet of things (IoT) for many in Hong Kong but it is almost certainly not the first time their lives have been touched by it. Put simply, IoT is the rapidly expanding universe of objects that have the ability to gather and transfer data over a network without requiring human interaction.
If you think this is terribly futuristic you may be surprised to know the future is with us already. Depending on what you count and who’s counting, IoT devices already exist in their billions. For example, IT research and advisory firm Gartner forecasts that by the end of this year 4.9 billion connected things will be in use, 30 per cent up from 2014, and by 2020 that will swell to 25 billion.
The disruptive impact of IoT will be felt across all industries and all areas of society but it also creates a great opportunity for Hong Kong, which is already one of the world’s most connected cities. With an advanced and reliable ICT infrastructure, very high broadband and mobile penetration rates, and excellent Internet connectivity we have a solid foundation on which to harness the power and potential of IoT technologies to build a smarter city. At the Hong Kong Science Park we’ve already identified “Smart City” as a cross-disciplinary theme around which we’re building a synergistic cluster of companies to innovate and develop technologies, devices and applications.
At a Science Park IoT Symposium last month, Alan Lau, the head of McKinsey Digital in Asia, characterised the idea that IoT is all about consumer devices as a myth. Industry research suggests 70-80 per cent of the IoT action is in the enterprise/organisational space, with Smart City applications being particularly hot. What’s more 80-90 per cent of IoT value is captured by users, not suppliers. The Hong Kong Government’s East Kowloon Smart City initiative is therefore timely in terms of building up local expertise.
In fact, as the Secretary for Commerce and Economic Development Greg So pointed out during his IoT Symposium presentation, Hong Kong has an opportunity to become an hub of excellence in the field. As we know, local industrialist control of around 300,000 factories in China, mostly in the Pearl River Delta, which is at the heat of the global electronics supply chain. Meanwhile, according to Mr So, there is an explosion of technology start-ups coming to Hong Kong from IT hotbeds in the US, Europe and Israel because it is the place where innovation meets commercialisation and production, supported by strong IP protection, excellent legal services and a deep pool of financing options.
It should also be remembered that those billions of IoT devices – together with the cloud computing and big data analytics to process their output – represents a potential threat to society. Regulators around the world are waking up to the security and privacy risk and Hong Kong should be following suit.
An holistic approach, handling the potential perils in tandem with the rollout of the IoT from the outset, is the best policy to forestall mishap and mismatch between innovation and deployment. Stakeholders from different segments of the society all have their own part to play. among the various urging initiatives, fostering cross-discipline cluster effects, enabling technopreneurs to gain access to appropriate R&D resources and connecting them with other individual and enterprise collaborators are integral to the success of IoT development in Hong Kong.
Doing nothing is not an option. Don Taspscott, one of the world’s leading authorities on innovation and the economic and social impact of technology has a stark warning that “for individuals, organisations and societies that fall behind, the punishment is swift”. History has proven that he is right.
Allen Ma is chief executive of the Hong Kong Science & Technology Park Corporation