Google's Eric Schmidt to Hong Kong: You need more engineers to start companies like mine

Google Chairman Eric Schmidt has one suggestion for the Hong Kong government on how to make the city remain competitive – to open more technical universities, thereby attracting more software engineers, rather than more bankers.

Schmidt, who was visiting Hong Kong on Monday to announce a partnership program with the Chinese University of Hong Kong in a bid to boost the number of local young entrepreneurs for start-up businesses, told the South China Morning Post in an interview that many of economic problems that Hong Kong is now facing - including high rents that kill many local small businesses - are not unique and that other global cities face the same challenges.

To solve the problem, he urged the government to create more technical universities to help local businesses make better use of cutting-edge technology. Meanwhile, Hong Kong’s small businesses also need to find ways to grow in order to compete with bigger businesses, said Schmidt.

“The problem about small shops is that a small shop was not an entrepreneur company but just a small company and it was not growing. People often get confused over this. You don’t want small businesses. You want fast-growing businesses, a chain or something,” said Schmidt, whose firm will work with CUHK to help young Hong Kong entrepreneurs to “overcome the start-up costs and isolation that come with high rents”.

“In America, there’s always a concern that the drug store is replaced by the luxury shop but the real problem is the drug company needs to become bigger. They had to do something and they didn’t and ultimately they were replaced by something which can afford the higher rents. You have to grow or you basically die,” said Schmidt whose firm Google was set up by two people and now is the world’s No1 search engine.

When asked to comment on Hong Kong’s growing social discontent over the so-called “real estate monopoly” where many young people believe major developers in Hong Kong occupy too many economic resources in the city, Schmidt said: “If you create a big enough company, they have to deal with you. If you can only do a small company that will not grow, well, then you won’t have a lot of power to deal with the tycoons.”

“The tycoons did the right thing because they wanted to be bigger. The little company wanted to be bigger too but they just didn’t do it. So as long as the rules are clear, as long as there is no corruption, it strikes me as a fair and clear answer,” he added.