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Ways for HKSAR to transform itself into an I&T hub
Winnie Tang says the city's success in this area willdepend greatly on attracting more overseas talents and developing the right ecosystem in the Bay Area
Xu Li, chief executive officer of SenseTime, a local unicorn (a startup with valuation at $1 billion) from the Chinese mainland, who studied a doctoral degree at the Chinese University of Hong Kong, shared his insights recently on how Hong Kong can become an innovation and technology (I&T) hub. He believes that Hong Kong has solid scientific research foundation which the mainland cannot compete with. The problem is its ecosystem within the industry is weak.
I cannot agree with him more. Hong Kong indeed has a number of advantages and the potential to transform itself into an I&T hub if the policy is right.
First of all, we are well-known in scientific research such as artificial intelligence. In terms of citation and influence (h-index), Hong Kong's AI theses ranks 10th in the world. In the conference of the world-recognized Association for the Advancement of Artificial Intelligence held early this year, the acceptance rate of theses from Hong Kong was over 20 percent, among the top five in the world.
Being international is also our advantage. In the Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area, the word “international” appears 123 times. In the third chapter describing Hong Kong with 140 words, “international” is mentioned more than five times. Hong Kong is the most international city in the Bay Area.
The SAR is strong when it comes to attracting capital across the globe. Last year, 207 companies were newly listed on the Hong Kong Stock Exchange, raising funds of HK$288 billion ($37 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 talents due to its open culture. According to a survey conducted by Invest Hong Kong at the end of last year, 35 percent of entrepreneurs in Hong Kong came from overseas; among them, over 40 percent were from the United States, the United Kingdom and Australia. European business school INSEAD's recently published Global Talent Competitiveness Index 2019 ranked Hong Kong 27th out of 114 cities in the world, its talent competitiveness is significantly ahead of the major mainland cities (Beijing: 58th, Guangzhou: 87th, and Shenzhen: 94th). Hong Kong's simple and low tax rate, combined with a sound legal system, free flow of information and protection of intellectual property are factors of attraction.
However, since China's State Administration of Foreign Experts Affairs launched the Thousand Talents Plan in 2008 by which selected foreign talents can receive research grant of up to 5 million yuan ($744,000), lots of talents have left for the mainland. Two local university professors have had personal experience of losing their postdoctoral researchers to mainland institutes. One of them was offered extra sponsorship of half a million yuan a year after being recruited by a Shenzhen government listed biotech company.
Apart from I&T, the finance sector is another focus. Guangzhou, another major city in the Bay Area, launched a policy last October with a subsidy of 500,000 yuan for each senior manager with outstanding performances in the finance industry. For talents newly moved to Guangzhou, each will be offered 1 million yuan as the settling fee. On the other hand, Shenzhen introduced a series of measures in January. For example, 1 million yuan each will be awarded to financial organizations and tertiary institutes that offer first-rate training programs.
Under the strong competition from neighboring cities, it is difficult for Hong Kong to effectively attract and retain talents. The relatively uncompetitive compensation and benefits, small and expensive housing and poor air quality have made it difficult for overseas talents 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.
Although Financial Secretary Paul Chan Mo-po announced the government would further invest over HK$45 billion to drive the development of I&T infrastructure and strengthen talent retention efforts in Hong Kong through the recently released Budget, the government has to do more to retain and attract more talent to Hong Kong. We need policies and the right environment to encourage researchers and students to commercialize their ideas which can really help jumpstart the development of I&T in Hong Kong.
In fact, Shenzhen, China's Silicon Valley, has a large pool of I&T talents. Can Hong Kong assume the role of primary research and development, while cooperating with the production establishments in other Bay Area cities, such as Shenzhen, so that commercialization can be realized more readily? In other words, we leverage on the technology development and industrial capabilities of other Bay Area cities while Hong Kong remains as the driver, just like the interdependency between Stanford University and Silicon Valley in the US.
In the past, Stanford University was a second-rate engineering school, but nowadays, it has become the No 1 choice of most students, over Harvard and Princeton. While the goal of most academia is to advance knowledge for the sake of knowledge, not to commercialize technology, Stanford's engineering school has had a strong entrepreneurial spirit in building the tech boom resulting in some of the most celebrated innovations in Silicon Valley. Stanford's research park houses not only cutting-edge companies like Tesla and Skype, but also world-renowned tech law firms and research and development labs. What's more, the first 100 staff of Google, the tech giant in Silicon Valley, hailed from Stanford. And today, 1 in 20 Googlers are also Stanford students.
If Hong Kong can encourage entrepreneurial spirit among local academia and work with Shenzhen, using this model, to boost the ecosystem, the Bay Area can one day become a talent magnet like Stanford University and Silicon Valley.
Therefore, whether or not Hong Kong can transform itself into a talent hub very much depends on the successful development of an ecosystem in the Bay Area.
Dr. Winnie Tang
Adjunct Professor, Department of Computer Science, Faculty of Engineering and Faculty of Architecture, The University of Hong Kong