Doubts aired over future of Hong Kong’s technology industry amid staff exodus at Science Park
Concerns about new management direction and rental increases feed discontent, Post learns
A chorus of concerns has been voiced over the positioning of Hong Kong’s flagship platform for promoting the technology industry, which under new management has been losing staff and failing to attract tenants, the Post has learned.
Fifteen years since Hong Kong Science Park opened its doors, deep doubts linger about its strategic positioning, both in attracting talent and the kind of clusters it wants to form at the sprawling Sha Tin site.
Staff have been exiting for a variety of reasons, and insiders told the Post on condition of anonymity that many were at odds with the direction taken by CEO Albert Wong Hak-keung, who took over from his popular predecessor Allen Ma in August last year.
At least 40 to 50 staff of its 220-member management team, including senior figures such as the chief officers for marketing, commercial affairs, operations and project development have left the company since the end of last year, according to a source close to management. Some positions have since been filled.
“Many had subscribed to [former CEO] Allen Ma’s vision, but since he left, everything seems to be falling apart,” the source said.
Vacant space at the site has been on the rise. From 370,000 square feet left available last February, the figure as of August stands at 500,000 sq ft, according to the source, accounting for about 15 per cent of the total floor area of about 3.5 million sq ft.
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In addition, a further 800,000 sq ft of floor area, or 22 per cent more office space, is due to materialise when a HK$4.4 billion expansion west of the park’s third phase is completed in 2020.
While seeking Legislative Council funding approval for its expansion programme last year, the park estimated all three phases of the park would be fully occupied by 2017/18.
“The issue is not how much space is vacant. But why is Science Park not attracting tenants any more?” the source close to the management said.
But the park’s spokesman told the Post that despite more vacant space, occupancy rates were now at 82 per cent, up from 79 per cent in 2016/17.
“The growing demand is fuelled by the increasing number of incubators and biomedical technology companies,” he said. “Occupancy is not the only measurement for success.”
Tenants, however, question why they have been offered no respite from rental increases. Rates have risen from about HK$17 per square foot in 2013 to around HK$25 in fewer than five years.
“It’s going up non-stop and it’s not feasible,” the head of a technology start-up that has been a long-time tenant said. “As companies grow, they need more space.” The company now pays a rate of more than HK$30 per sq ft.
“I’m willing to pay, but we’re talking about the middle of Tai Po. It’s hard enough to attract people to come work here.”
With new management comes new management culture. And not everyone is finding the change to their liking.
“Everything seems to be about operational efficiency and KPIs [key performance indicators] now,” the tenant said. “In promoting companies and start-ups, you need to do events, you need to make noise. These aren’t necessarily KPIs that are tangible.”
“There is a feeling that the management is not doing things in the interest of science but running it as a business, a piece of real estate,” said another source familiar with the park’s vetting processes.
“During Ma’s time, there was a lot of engagement with tenants,” the source added. “They would listen. They would organise overseas trips to look at different industries. They knew they were not just landlords, but facilitators to help start-ups and businesses commercialise.”
Since opening in 2002, the park has adhered to a mandate of “carefully building a tech-based ecosystem that connects stakeholders, nurtures talent, facilitates collaboration, and drives innovation to commercialisation”.
But some former board members, senior managers and tenants felt the park had been straying from the mandate, delving into non-core areas such as research, rather than focusing on providing a platform for promoting start-ups and helping businesses grow and be commercially viable.
They expressed scepticism over Hong Kong’s push into biomedical research, not least due to the city’s small size, talent pool and lack of space – particularly lab space. They note the mainland has also invested heavily in biotechnology and biomedicine and enjoys the productive wherewithal and cost structure to excel.
At present, electronics as well as information and communications technology (ICT) comprise the bulk of the park’s tenant base and two-thirds of the city’s merchandise exports.
Engineering sector lawmaker Lo Wai-kwok, who has served on the park’s board since 2012, said it was important to maintain a diverse mix of tenants, including traditional manufacturers of electronics and telecoms as well biotechnology or biomedical players.
“I don’t hope to see a situation where there is a very one-sided development,” he said. “There is a very wide applicability for electronics and ICT. The most important thing is for development to be comprehensive and multidisciplinary.”
But it is not all doom and gloom for the park. About 648 companies now call it home, up from 598 a year ago. Apart from its expansion, Lo claims the park is moving in a positive direction with the development of an advanced manufacturing centre and a data technology hub at the Tseung Kwan O Industrial estate.
The number of its start-up incubators grew by 12 per cent last year from 2015/16. It has brought the city success stories such as Lalamove, formerly known as EasyVan, which has now spread to six overseas markets.
In response to the criticisms, a park spokesman said it sought to bring a healthy mix of partner companies to serve Hong Kong’s innovation and technology development.
The rental increases, the park added, were based on a study by a commissioned independent professional surveyor in 2015, and stressed they were still below the city’s “standard market rate”.
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While the park did not confirm the high staff turnover figures, it claimed the attrition rate was below the average market turnover.
“While [Science Park] expands to spearhead the development of the innovation and technology ecosystem, we will continue to acquire the best talent in the community to join our workforce,” the spokesman said.
Venture capitalist and former board member Nisa Leung Wing-yu described the park as striving to create “a better environment where these individuals can actually start companies more easily”.
“It means ... making it easier to recruit people and get government funding because they really need to spend 99.99 per cent of the time thinking about building the product, putting together the product portfolio and building the team, not dealing with red tape.”
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Leung, however, believed the organisation needed to hire more people to lead its clusters who actually understood sectors such as biotechnology, artificial intelligence and robotics.
“We don’t have enough talent who understand these technologies. If we don’t have enough people who understand them, its going to be very difficult for us to recruit the right companies to Science Park, Cyberport or Hong Kong,” she said.
“We really need to beef up cluster knowledge with more people who understand new technology sectors.”