Technology the key to halting the slide of Hong Kong

The importance of competitiveness is emphasised relentlessly in economic visions for Hong Kong, such as in the Smart City Blueprint of Chief Executive Carrie Lam Cheng Yuet-ngor.

On the face of it, as one of the world’s most digitally connected cities, it should be a leader in technology, innovation and internet-based business. But as such new-economy benchmarks have redefined competitiveness, Hong Kong has slipped out of the top tier to be replaced by Shenzhen.

Hong Kong has the infrastructure, in terms of household broadband connection and mobile device penetration, prompting most to assume the city is digitally savvy. But, according to a recent study by US technology giant Google, less than half of residents used services such as digital banking and collaboration apps.

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The government shares with the private sector an important role in transforming connectivity into a digital society, not least by pushing citywide Wi-fi. It is disappointing therefore that the Audit Commission has found that free public Wi-fi in Hong Kong remains slow, patchy and mostly underused.

The watchdog said that based on annual government service inspections, more than a third of public Wi-fi hotspots across the city had bandwidths slower than 3 megabits per second and, at some locations, no internet connection could be established. Even at venues with good connection, usage was low because of poor signage.

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Things were no better with Wi-fi HK at non-government venues, which the authorities have been promoting to expand coverage through collaboration with the private sector. Despite a government promise to double the number of Wi-fi HK hotspots to 34,000 from 2016 to next year, as of last December the number had gone up by just 3,339 to about 20,000.

If Hong Kong is to arrest its slide it must focus more on development of technology and education that attracts talent. Lam’s Smart City Blueprint is headed in the right direction towards diversifying the economy, with incentives for more risk investment, including tax breaks for research.

Shenzhen has built on the hardware platform of its manufacturing economy. By comparison Hong Kong has been slow to transition its banking and finance-based economy towards technology.