Hong Kong, 25 years after its return to China, needs a new narrative, not nostalgia
- The city may be facing geopolitical and economic headwinds, but looking back to the ‘good old days’ won’t help
- Hong Kong needs to build on tomorrow’s themes of digitisation, innovation and sustainability, connect more with the Greater Bay Area and ensure growth is inclusive
One thing is certain: we are living in a very different context than that of 25 years ago. Hong Kong in the 1980s and 1990s was a critical entry point into China. We thrived as the middleman between Western markets and China’s vast manufacturing base. We introduced capital and expertise to the Pearl River Delta. We served as the financial hub for Chinese companies seeking to raise capital.
Over the past 20 years, Hong Kong has thrived on the back of the mainland’s growing economic might; capital, talent and tourists flocked here. This was our golden era.
But while it might be easy to sit back and drink to the “good old days”, we need to move past our nostalgia and appreciate the potential upside of our city. From 2010-2019, China comprised about one-third of global real GDP growth. Over the next decade, China will remain an engine of global growth.
During the past few years, we have witnessed a boom in innovation-based technology start-ups. At Hong Kong Science Park, where I have been a board member for the past several years, the number of start-ups and local-bred entrepreneurs has increased exponentially. Many second and third-generation family scions are investing in new areas, pivoting their traditional businesses into the modern era.
More importantly, we need to have a heightened sense of urgency. While we pride ourselves on our past advantages of low taxes, a free economy, efficient governance and rule of law, these are insufficient to ensure our future success. We cannot harbour wishful thinking that with Covid-19 restrictions lifted and borders reopened, the good times will automatically return. They most likely won’t. Let’s move on.
Finally, we need innovation-powered growth, because without growth, there is no future. We have to play offence. What can we do to ensure that a substantial portion of our economy in five years’ time will be made up of new jobs, of new businesses, and in entirely new industries that will be created during this period?
Hong Kong’s best days don’t need to be behind us. But if Hong Kong is going to be great, it will need a new playbook and humble sense of urgency to change. I love the example of Amazon’s Jeff Bezos when he declared that Amazon would always remain in “Day 1”.
Day 1, he explained, is when you are nimble, when you move decisively, when you are always striving to improve. When asked about what Day 2 looked like, Bezos answered, “Day 2 is stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death.”
It’s time for Hong Kong to go back to Day 1.
Joe Ngai is the managing partner of McKinsey & Company’s Greater China region.