Hong Kong’s business confidence remains sluggish amid vibrant tech start-up activity
Hong Kong was ranked 37th of 45 cities around the world in business confidence in digital transformation initiatives, according to The Economist Intelligence Unit
While Hong Kong’s start-up revolution continues to surge because of increased activity in the financial technology field and the spark provided by young billion-dollar companies, a new study has found that overall business confidence in the city is down in the doldrums.
Hong Kong ranked 37th in an Economist Intelligence Unit (EIU) survey of 45 cities about business confidence in so-called digital transformation initiatives, according to a press briefing on Thursday by Australian telecommunications giant Telstra, which commissioned the report.
The survey’s finding was in stark contrast with the positive reinforcement earlier Thursday at consulting firm Accenture’s fourth annual FinTech Innovation Lab Asia-Pacific investor day at Cyberport, where 10 selected start-ups pitched their offerings to an audience of financial industry executives and venture capitalists.
“Innovation spurs more innovation,” said Cindy Chow Lok Mei-ki, the executive director of Alibaba Group Holding’s HK$1 billion Hong Kong Entrepreneurs Fund.
“Put a bunch of start-ups together and you can spark a fire of excitement for developing new solutions, tackling previously unanswerable challenges and seeking to make the world a better place. These are lofty goals worth pursuing.”
Participants in this year’s edition of Accenture’s accelerator programme were South Korean blockchain infrastructure provider Blocko; Hong Kong-based CoverGo, which automates manual insurance processes; FutureFlow, a US specialist in countering money laundering and terrorist financing; American start-up KapitalWise, which offers a micro-investment platform; and Singapore-based microUmbrella.com, which provides a micro-insuance buying and claims platform.
The other selected start-ups were Red Pulse Technologies, a Hong Kong and Shanghai-based market intelligence platform covering China’s economy; Sherlock Garden, an Israeli firm focused on detecting compliance, ethics and confidentiality breaches; Starling, a US regulatory technology start-up; Stash, a health care and insurance technology provider from Singapore; and Tymbals, an Australian insurtech company that has created a probability network to calculate enterprise risk.
Chow said the environment in Hong Kong was now “supporting a vibrant ecosystem of start-ups”.
She pointed out that the Alibaba Hong Kong Entrepreneurs Fund has assessed more than 1,400 business plans since its was launched in November 2015, and invested about US$20 million in 12 start-ups. New York-listed e-commerce powerhouse Alibaba owns the South China Morning Post.
Simon Lucocq, the Asia-Pacific head of technology and operations at Bank of America Merrill Lynch, indicated that the financial services industry is “increasingly seeing start-ups deep-dive into a particular topic and come up with solutions that address relevant issues to clients, such as payments and cybersecurity”.
The EIU survey, however, found that executives in Hong Kong remained concerned about the general level of support available for innovation and entrepreneurship, as well as in their ability to hire skilled tech talent they need to transform their businesses with advanced digital applications, processes and techniques.
“Talent and skills shortages are cited by almost four in 10 Hong Kong executives as the toughest digital transformation challenge their businesses face. The chief skills gaps, survey respondents say, are in digital security and business networking,” said Charlie Ross, Asia editorial director at EIU.
Bangalore, San Francisco and Mumbai were found to have the greatest degree of business confidence in digital transformation efforts, according to the survey of 2,620 senior corporate executives in 45 cities that was conducted in June and July this year.
Darrin Webb, Telstra’s managing director for North Asia, said Hong Kong needed to align “commitments across businesses, the government and communities to address the divide between reality and perception” about the city’s digital transformation capabilities.