Forget being the next Silicon Valley but play to your strengths as a ‘connector’ for start-ups, report advises Hong Kong
Efforts to boost start-ups and innovation in Hong Kong should focus on the city’s existing strengths in services and exploit its cosmopolitan population as a testing ground for new ideas, according to a report.
The Hong Kong As a Startup Hub: Mavens, Connectors and Salesmen report produced by the University of Hong Kong and InnoFoco for research firm Compass said it was unrealistic for the city to become the next Silicon Valley, but that it still has many key advantages.
“It is imperative to capitalise on Hong Kong’s unique advantages as a business-friendly nexus and its core competencies as a financial services centre, a supply chain management hub and a professional services centre,” the report said.
Beyond serving as a connector to the Chinese market, Hong Kong’s small, technology savvy population can act as a place to validate ideas or introduce new products, the report said.
To support Hong Kong in this role, the report urged the government to sell foreign start-ups on the idea of developing their Asian markets through the city, as well as encouraging mainland Chinese start-ups to use Hong Kong as a starting point for global expansion.
The number of start-ups in the city grew to 1,558 in 2015, up 46 per cent on 2014, with 3,721 people working for the fledgling companies, according to a survey by InvestHK.
Hong Kong was ranked as the fifth-fastest-growing start-up ecosystem, according to the Global Startup Ecosystem Ranking 2015 study released in July by San Francisco-based Compass.
Start-ups in Hong Kong are in line for increased government investment after chief executive Leung Chun-ying announced a raft of funding support for the sector in his policy address, including an HK$2 billion matching fund to co-invest with professional venture capital.
But the report noted the need to create demand for innovation as one-off grants will not help build sustainable businesses.
To create this demand, it suggests the government introduces awards to encourage departments to work with start-ups to improve public services, and for the private sector to work closely with entrepreneurs on innovation.
The government should also adapt regulations to ensure it can strike a balance between allowing new ideas and protecting the public interest, according to the report.
“It is important for the government to take a more progressive and proactive role in reviewing and updating the regulatory framework in sectors such as financial services to ensure that the regulations are keeping in pace with technological changes,” the report said.
It emphasised the need to bring in more overseas accelerator programmes and talent as well as adapting visa guidelines to suit start-ups.
“Hong Kong needs not just more tech talents, but also designers, product development and marketing specialists, as well as professionals who understand technology and innovation and are experts in commercialisation,” said Rachel Chan, founder and chief catalyst of InnoFoco.