Hong Kong can’t innovate like Shenzhen. But it can be an experimental hub for tech

A compact city like Hong Kong is an ideal test lab for the development of 22nd-century technologies, including for mass transport and alternative energy
Yet, as we choke on the fumes permitted by our outdated regulations, why are the current innovations in clean energy not being rolled out in Hong Kong?

Richard Harris

Published: 6:45am, 23 Apr, 2021

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Well over 50 years ago now, as a small boy in Africa, I told my friends that I was going to move to Hong Kong. They had no idea where it was, but they had all heard of it. “ Made in Hong Kong! Made in Hong Kong! We’re going to call you ‘Made in Hong Kong’!” It actually was an exciting start to life in my new home.

The flood of goods imprinted with those four words made our city famous. We competed in the 1960s by copying and making cheap stuff. We took technology from others who innovated, manufactured it better, and sold it back to them. These are our roots.

But times have changed. Hong Kong’s economic strategy requires us to articulate and recapture our current competitive advantages – such as raising capital and marshalling global resources.

Hong Kong government policy has morphed from laissez-faire in the 1960s to patriotic control in the 2020s, but is missing a piece of the puzzle. That piece is the will to develop tomorrow’s technologies, not by overfunding the toothless Innovation and Technology Bureau, but by developing other people’s innovations.

We are blowing smoke if we think we can compete with that dynamic centre of innovation, Shenzhen, which has immeasurably more world-beating talent, experience, knowledge and capital resources. Innovation may be sexy, but it’s not our sexy.

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Last traditional family letterpress printing shop in Hong Kong

Hong Kong is an ideal Petri dish, a test lab for the development of 22nd-century technologies. These could include both hard technologies like mass transport and alternative energy (as ours is a dense, compact urban environment) and softer elements such as social care and leisure management (as we have a long-living, fairly healthy population, and extraordinary landscapes and seascapes).

Yet, as we choke on the fumes permitted by our outdated regulations, why are the current innovations in clean energy not being rolled out in Hong Kong? As if to drive home our lack of innovation credentials, Shenzhen is the first city to operate a fully electric bus fleet.

The first electric bus was developed over 50 years ago. Adoption of electric buses in China is now at a world-beating 14 per cent of the fleet, while Hong Kong’s electric bus fleet is dismal. In Europe, only 0.2 per cent of the bus fleet is electric. The United States lags further behind, at just 0.03 per cent.

The Hong Kong government has a crucial role to play in electrified transport, as bus franchises cannot invest in the future without being given government subsidies, or allowed to raise fares. The results would be a cleaner transport network and development of intellectual property, which can be exported elsewhere at a profit.

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Ironically, some of Hong Kong’s private investors have been investing in fuel cell technology start-ups even though some also have stakes in the local franchised bus companies.

This is more than just developing battery-powered vehicles – a temporary technology because of the energy needed to carry heavy lithium-ion batteries and the high end-of-life cost of disposing of them. Karl Davies of H&BA Transformational Solutions, who has spent the past three years selling hydrogen fuel cells says that “the target at present is to demonstrate the technology on buses and light trucks”.

Hydrogen can be produced by splitting water molecules with renewable electricity. Hydrogen fuel cells are not cheap, nor yet efficient, but the fuel burns like natural gas and only emits water vapour.

Nuvera Fuel Cells of the US, with over two decades of experience, is testing its 60kW hydrogen fuel cells in Golden Dragon buses on the mainland. Its CEO, Lucien Robroek, sees “the Western world also starting to embrace this approach”. The first hydrogen trains in France will start to roll from 2023; Japan has long been researching fuel cells for urban public transport.

If our government wishes to advance our clean energy credentials, it has to attack the internal issues that inhibit policy development and resource allocation. It is too easy for different departments, including the Environmental Protection Department (EPD), the Electrical and Mechanical Services Department, the Transport Department and the Treasury, as well as a whole host of other so-called specialists, to fight a turf war over clean energy policy.

The EPD’s New Energy Transport Fund has provided about HK$166 million for 210 trials of electric vehicles but nothing for hydrogen fuel cell technology. Hong Kong is in an ideal position to become a test-bed for this technology from global providers such as Canada’s Ballard Power Systems, which has a joint venture with China’s Weichai Power.

The government can easily turn Hong Kong into an experimental centre for the development of new technology. But, to do so, it must instigate clearer lines of responsibility between its departments. At the moment, we are wasting our energy with too little vision and too much talk – producing much heat, but few results.

Richard Harris is chief executive of Port Shelter Investment and is a veteran investment manager, banker, writer and broadcaster, and financial expert witness