When will Hong Kong’s next Octopus moment occur?
Hong Kong’s arguably most notable hi-tech achievement in 20 years occurred on September 1, 1997, with the Octopus contactless smart-card system. It’s now a ubiquitous part of the city’s daily life and has spread to other cities around the world
In his policy address as Hong Kong’s first chief executive in October 1997, Tung Chee-hwa outlined his vision to make the city “a leader, not a follower, in the information world of tomorrow”.
That initiative was eventually manifested in the Hong Kong Science Park in Sha Tin to help foster a vibrant innovation and technology ecosystem in a city otherwise known as a major international shipping, trading and financial centre.
In 1999, it gave the go-ahead to develop Cyberport, aiming to create a cluster of hi-tech local and foreign companies that would nurture new economic activities.
Yet roughly 20 years since Tung’s clarion call to build on the city’s “head start” in the information age, achieving that coveted leadership role remains elusive.
That has brought criticism to the government’s hi-tech showcase projects, with both the Hong Kong Science Park and Cyberport labelled as “white elephants”.
“For Hong Kong, science and technology development has gone through different phases in the past 20 years,” said Albert Wong Hak-keung, the chief executive at Hong Kong Science and Technology Parks Corp. “We’ve transformed from focusing on building infrastructure to providing services and grooming next-generation innovation and technology companies.”
The corporation oversees the science park, the InnoCentre design hub in Kowloon Tong and the city’s three industrial estates in Tai Po, Tseung Kwan O and Yuen Long.
Hong Kong’s hi-tech sector had changed profoundly as the number of start-ups mushroomed in recent years, Cyberport’s chief executive Herman Lam Heung-yeung said.
“We have also evolved with the times,” Lam said. “In 2010, we didn’t have enough companies for our incubation programme since we probably received only 100 applications. Now we get about 1,000 applications, of which 170 to 180 get accepted.”
An extensive telecommunications network, the wide availability of cloud computing resources, the influx of astute entrepreneurs using disruptive technologies to solve business problems and the growing interest of venture capitalists and large companies to invest in start-ups had brought Hong Kong closer to its goal of technological leadership, he said.
Cyberport, which counts about 900 companies as part of its community, has now sharpened its focus on financial technology, e-commerce, artificial intelligence and the internet of things.
The Cyberport Macro Fund has an initial HK$200 million (US$25.7 million) to provide another source of seed financing to the city’s entrepreneurs.
Arguably Hong Kong’s most notable hi-tech achievement over the past 20 years occurred on September 1, 1997, when the Octopus contactless smart-card system was launched across six public transport networks.
The system swiftly expanded into retail, parking meters and sporting venues while spreading to London, Macau, Shenzhen, the Netherlands, Dubai and New Zealand.
The Octopus card, now a ubiquitous part of Hong Kong’s daily life, won the Chairman’s Award in the World Information Technology & Services Alliance in 2006 for being the world’s leading automatic fare collection and contactless smart-card payment system.
Hong Kong had a knack for pulling togetheravailable technologies to quickly tackle business issues without making a massive initial investment in research and development, Lam said. Another “Octopus level” success story lay awaiting, he said.
Wong said Hong Kong’s strong intellectual property protection, rule of law and free flow of information put the city in a strong position to excel in technology.
In addition, he pointed out that the city had globally ranked universities, which provided a steady supply of skilled people in information and communications technologies, biomedical engineering and related fields.
Back at the science park, genomics company Xcelom is seeking to commercialise non-invasive prenatal screening, an innovation developed by Professor Dennis Lo Yuk-ming of the Chinese University of Hong Kong.
Previously, prenatal testing for genetic diseases was done by taking fluid from the womb. Lo discovered a way to test for such diseases by examining the foetal DNA present in the mother’s blood. With that breakthrough, he took home last year China’s version of the Nobel Prize – the Future Science Prize – as well as the US$1 million that came with the award.
“Biotechnology is a big area where Hong Kong has a niche,” Wong said. “There is big potential in this field.”
The rapid advance of technological innovation also meant Hong Kong’s regulations must develop further to stay relevant, he said.
New start-ups in the city were focused on the application of their solutions in multiple industries as well as customisation, the Hong Kong Trade Development Council’s economist Wenda Ma said, citing a recent survey.
“They have also adopted an autonomous and flexible work culture” compared with traditional businesses, Ma said.
The survey also found that Hong Kong remained the main market for 87 per cent of the about 180 local start-ups polled while access to funding remained a challenge even as they launched their products to market or proceeded to expand their operations.
A defining similarity of the successful start-ups that had gone through Cyberport’s incubation programme was that mainland China became one of their largest markets, she said.
“China provides us with a vast, important market that cannot be ignored,” Lam said. “A prime source of financing for Hong Kong start-ups today is the mainland investor who has experience in helping technology companies grow.”
Singapore, Finland, Sweden, Norway, the United States, the Netherlands, Switzerland, Britain, Luxembourg and Japan lead the world when it comes to benefiting from investments in information and communications technologies, according to the World Economic Forum’s 2016 Global Information Technology Report.
Hong Kong was ranked 12th out of 139 economies surveyed in the report for “networked readiness”, which includes indicators like political and regulatory environment, business and innovation environment, skills, affordability and infrastructure.
Mainland China, the world’s second-largest economy, was ranked 59th by comparison.