In the newly released Budget, the government continued investing over HK$45 billion to drive the development of innovation and technology (I&T) infrastructure and talent retention in Hong Kong. However, in the Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area ("GBA Plan") announced in February, the central government seems to merely emphasize the inherent advantages of Hong Kong in finance and trading. Hong Kong’s plan to become an I&T centre was not mentioned.
Some people are worried that the central government only wants Hong Kong to remain in its old path. However, I don’t agree with this view.
Although the atmosphere of Hong Kong’s I&T is far weaker than that of Shenzhen (SZ), China’s Silicon Valley, one of the major cities in GBA, the Hong Kong government has steadfastly promoted development of science and technology in recent years.
Moreover, in the GBA Plan, the word "international" appears 123 times. In the third chapter describing Hong Kong in 140 words, the word "international" appears more than five times. Hong Kong is the most international place in GBA. In fact, whether Hong Kong can be a leader in I&T and new economy in the region, depends all on whether we can leverage our “international” advantages thoroughly.
Hong Kong’s strength
Hong Kong is indeed strong in attracting capital across the globe. Last year, 207 companies were newly listed on the Hong Kong Stock Exchange, raising funds of HK$288 billion, the highest among all stock exchanges. Companies that raise capital in Hong Kong include mainland companies such as China Tower, Xiaomi and Meituan-Dianping. Apart from capital and network, more importantly, Hong Kong attracts more overseas talent due to its open culture.
According to a survey conducted by Invest Hong Kong at the end of last year, 35% of entrepreneurs in Hong Kong came from overseas, among them over 40% from the United States, the United Kingdom and Australia. The startup community is quite international. INSEAD, the European business school published the Global Talent Competitiveness Index 2019 at the end of January that Hong Kong ranks 27th out of 114 cities in the world, its talent competitiveness is significantly ahead of the mainland cities (Beijing: 58th, Guangzhou: 87th, Shenzhen: 94th). Hong Kong's simple and low tax rate, combining with a sound legal system, free flow of information and protection of intellectual property are factors of attraction.
Competition for talents among GBA cities
However, since China’s State Administration of Foreign Experts Affairs launched the Thousand Talents in 2008 by which selected foreign talents can receive research grant of up to RMB 5 million, lots of talents have left for China. Two local university professors have had personal experience of losing their postdoctoral researchers to mainland institutes. One of them was offered sponsorship of RMB 0.5 million a year after being recruited by a SZ government listed biotech company.
Apart from I&T, the finance sector is another focus. Guangzhou (GZ), another major city in GBA, launched a new policy last October with a subsidy of RMB 100,000 for each senior manager with outstanding performance in the finance industry. For talents newly moved to GZ, RMB 1 million each will be offered as the settling fee. SZ, on the other hand, introduced a series of measures in January this year. For example, RMB 1 million each will be awarded to financial organizations and tertiary institutes that offer first-rate training programs.
Under the strong competition from neighbouring cities, it is difficult for Hong Kong to effectively attract and retain talent. The relatively uncompetitive compensation and benefits, small and expensive housing, poor air quality have made it difficult for overseas talent to live and work with a peace of mind here. This has also caused Hong Kong’s ranking as a destination to drop from 11th in 2013 to 41st this year in a global expatriate survey.
Hong Kong needs a strong ecosystem
What's more, Hong Kong lacks the desirable ecosystem of government, industry, academia and research. Seldom can we see successful cases of commercializing scientific research, making it difficult for scientific talents to develop their career further. This is really worrying though Hong Kong is well-known in scientific research such as artificial intelligence (AI). In terms of citation and influence (H-index), Hong Kong's AI theses ranks 10th in the world.
Xu Li, CEO of SenseTime, a local unicorn (a startup with valuation at US$1 billion) from the mainland who studied a doctoral degree at the Chinese University of Hong Kong, shared his insight. He believes that Hong Kong has solid scientific research foundation that China cannot compete with. However, it is necessary to work with the industry to form an ecosystem.
This requires support by government policies.
In fact, SZ has a large pool of I&T talent. Can Hong Kong assume the role of primary research and development, while cooperating with the production establishments in GBA cities, such as SZ, so that commercialization can be realised? In other words, we leverage on the technology development and industrial capabilities of GBA cities while Hong Kong remains as the driver, just like the interdependency between Stanford University and Silicon Valley in the U.S. In this case, researchers can commercialize their products and enjoy the economic returns. As a result, the area of Stanford University and Silicon Valley has become a talent magnet.
Therefore, whether or not Hong Kong can transform into a talent hub very much depends on the successful development of an ecosystem in GBA.
Dr. Winnie Tang is an adjunct professor at the Department of Computer Science, Faculty of Engineering and Faculty of Architecture, University of Hong Kong