From Knowledge to Impact: How Hong Kong Can Contribute to Innovation-Driven Economy

It’s time for Hong Kong to diversify its economy and fuel the development of innovation, urges CEO of Hong Kong Science and Technology Parks Corporation

By Fang Ying, Senior Writer, China Business Knowledge @ CUHK

According to the 2014 statistics from Hong Kong government, the services sector generated 92.7 percent of Hong Kong’s GDP. Even without the public sector, services still accounted for about 82 percent of GDP.

“More than 90 percent of our Gross Domestic Product (GDP) is from service industry, which is regarded as a high-end or high-value economy model,” said Mr. Albert Wong, Chief Executive Officer of Hong Kong Science and Technology Parks Corporation (HKSTP) and an alumnus of CUHK MBA programs.

“As an engineer, I am quite worried about this situation in Hong Kong. To have a healthy and dynamic economy, Hong Kong has to bring back the manufacturing industry and innovation to the city.”

Why? Because manufacturing sector has a multiplier effect on the economy, he said.

“According to economists, one manufacturing job can bring in 2.7 other jobs, while in the service industry, the multiplying effect is much less,” he said. “But more importantly, when we’re talking about innovation, the multiplier effect is three to five times, or even seven times, so innovation can help us generate broad-scale economic growth.”

Wong was delivering a keynote speech at the Coller Institute of Ventures Annual Conference (CIV2017HK) in April 2017. Themed “The Future of University Venture”, the Conference brought together global leaders to explore the essential role of higher education in venture capital and innovation.

Hong Kong ranked 14th in the Global Innovation Index 2016, a leading index of world economies’ innovation capabilities and results.

“No.14 is not bad, but in terms of knowledge and technology outputs, we only ranked 30th. We didn’t do a good job in transferring knowledge and technology,” he said.

“We have excellent upstream resources of innovation, such as world-class universities, regulated market and mature business environment, but do we make good use of them?

Innovation is not about a single product, but about an eco-system to change the whole society,” he said.

Wong thinks the Hong Kong society should do a better job in transferring knowledge and technology for the city, which is a key role of Hong Kong Science and Technology Parks Corporation.

“We have to create a supportive entrepreneurial eco-system that includes investment, policy support, market and industry adoption, infrastructure, human capital and internal culture,” he explained.

“The objectives of Science Park are to bring all these resources together to help companies transfer knowledge to business, and promote the innovation development in Hong Kong,” he added.

Established in May 2001, HKSTP has attracted 622 companies with a working population of over 12,000 people at the end of 2016. There are over 250 start-ups currently in HKSTP’s Incubation Programs, according to the data from HKSTP.

To be a tenant in HKSTP, the following two criteria must be met:

Firstly, a company must contribute to the long-term economic success of Hong Kong by implementing innovative projects in various industries, such as material & precision engineering, biomedical industry, electronics, information & communication technology and green technology.

Secondly, a company must have at least 50 percent of the manpower that are doing research and development (R&D).

“We do perform due-diligence. If your company is not truly doing R&D, we have to kick you out,” he said. “We are the best and largest incubator in Hong Kong. We welcome companies that are truly building innovation or creativity competence in Hong Kong.”

Wong expressed great optimism about the development of the Hong Kong/Shenzhen Innovation and Technology Park at Lok Ma Chau Loop area, a joint initiative between Hong Kong and Shenzhen governments to showcase both cities’ innovation and technology development.

With a site area four times the size of the current Hong Kong Science Park, the 87-hectare Hong Kong/Shenzhen Innovation and Technology Park will be the largest innovation and technology platform ever set up in Hong Kong.

“This is probably the largest infrastructure in Hong Kong in the next 10 years and it will be the base where the innovative brains of Hong Kong, mainland China and the world come together to drive innovation and technology development not only benefiting both cities, but also the whole region.”

“I think this is the best time for Hong Kong’s innovation and technology development. It is even the last chance for Hong Kong to diversify its economy; it is about the city’s survival,” he said.

Education too plays an essential role in the development of innovation in the city.

“We should have a good ecosystem to attract our graduates to go into technology industries,” said Prof. Fanny Cheung, Pro-Vice-Chancellor (Research) of CUHK. “As a university, we should take a broader view to create opportunities for better knowledge transfer,” she said.