Hong Kong needs to move past short-term profit mentality, says secretary for innovation bureau
With his term ending in 14 months, Nicholas Yang tells the Post about his vision for the city’s future and need to invest more in research and development
Nicholas Yang Wei-hsiung has a lot on his plate ranging from spreading Hong Kong’s Wi-Fi coverage to cross-border cooperation in the rapidly evolving internet economy. The secretary for innovation and technology bureau was appointed last November, after he was tipped to take the job for three years. With his term ending in about 14 months, Yang told the Post his thoughts about the development of the city’s innovation and technology-driven economic order.
Q: Last year, Hong Kong’s competitiveness for the first time lagged behind Shenzhen in terms of technology development. What are the chances Hong Kong will catch up with Shenzhen or even overtake it one day? A: You can’t say lagging, it’s just that they have grown from a small base. Our entire manufacturing sector has gone to Shenzhen. You can blame those who use policies to offer low-cost labour or low-price land. Manufacturers naturally want to make quick money. But that is not to say they have no long term vision. For example, the man who produced the very high-tech piece of glass [on your smartphone] is from Hong Kong.
Q: So re-industrialisation is on its way out of Hong Kong? But some manufacturers say it should have been done at least three years ago.
A: The same group of [manufacturers], given that land costs have gone up and still being close to Hong Kong, can come back and develop the next generation of manufacturing. . Hong Kong can have what Shenzhen doesn’t. It’s not moving the Shenzhen manufacturing back to Hong Kong.
For example, a tea cup is no longer a cup that serves a single purpose. The product may be an [Internet of Things or IoT], which connects to internet – it may have hardware and software. It can create value together with your smartphone. And, it’s a sharing thing. The value continues to create. So you have to use a completely different mindset to deal with the new economy.
We are in the transition from the service economy to knowledge-based. Based on experience, we will achieve that in less than 10 years.
Q: Is Hong Kong again lagging behind… ? [Yang answered without listening to the whole question]. A: I don’t think so.There is nothing wrong with lagging behind. Hong Kong has always been at the top. If you’re in the top one, two, three, four or five, it’s fine. Apple never worries whether they are No 1, so they have been passed by Google now. But Apple will catch up again. Would Apple think: oh, Google has passed us, we are in a trouble and are going to die and lose out? What kind of mentality is that? We can’t fix sensationalism into a piece of data.
Q: Then, how does Hong Kong maintain its competitiveness?
A: First of all, we’ve got to improve our ecosystem. Second, we’ve got to change of our mindset. Some 90 per cent of Hong Kong businesses are small and medium-sized enterprises. We have a problem. Our SMEs don’t invest intoR&D, but they have money invested in expensive real estate. They don’t have a long vision, again it is short-term profit mentality.
So the government can encourage them. We subsidise some of it, but not all of it. Because once they see the benefit of long term investments, they will jump into it.
When you invest in R&D, you tend to keep a tight group of very exceptional talents. So talent goes hand in hand with R&D. Innovation and technology will help increase productivity.
Q: What’s the direction of Hong Kong in increasing productivity?
A: We’re pretty productive, economically. We have a pretty good service sector, our financial and service sectors are unparalleled. Countries like Singapore want to do what Hong Kong is doing, but can’t. Yes, our service sector is threatened and going down, but that is the same the world over. It’s important to say that the problem is we need to diversify our economy because our service sector is not providing enough quality jobs for young people. That’s the problem. You have economic growth, productivity growth, but then the jobs are not good enough. Our young people need a diversity of jobs.
Q: How does Hong Kong resolve talent shortages?
A: People say I cannot hire enough IT people. It’s not that we don’t have enough information technology people, the problem is a lot of IT graduates become real estate salesmen when they graduate, chasing quick bucks.
So we do have talent – Hong Kong people switch very quickly. We can re-tool ourselves. Change our skills. We’re very versatile. For example, Hong Kong Polytechnic University has the second best hotel school in the world, yet less than half the graduates work in the hospitality industry because they get better offers from other industries. A graduate’s discipline is sought after in all industries.
Q: What type of co-operation do you see Hong Kong and mainland cities developing over the national Internet economy?
A: The 13th five-year plan spells out very clearly that Hong Kong can be an arbitration centre, a yuan offshore centre and a platform for innovation and entrepreneurship. I have never seen a national plan that so specifically helps Hong Kong. China realises that even though it is the second largest economy in the world, it needs its enterprises to go to the global market. To do this, they need to elevate themselves to the next level and this is where Hong Kong comes in – the super connector. We have traditionally been a super connector and a great middleman.
For example, we know international standards better than any enterprise on the mainland. The mainland has its own standards, but Hong Kong knows the standards of the rest of the world. We can play a role to make the mainland standards come closer to the international standards.
