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New financing platform energizes Hong Kong startup scene
Can you imagine what Hong Kong will look like 10 or 20 years from now? By that time, can we still rely on the four major industries currently accounting for nearly 60 percent of GDP – trading and logistics, tourism, financial services, and professional services – and continue to enjoy prosperity and stability with a per capita GDP still among the world's top 20, higher than Germany, Canada or the United Kingdom?
I have talked about the Fourth Industrial Revolution in the past and the unprecedented changes to be brought by the internet and new technologies. Some people predicted that it would be like a tsunami. Charlie Ang, founding president of The Innovators Institute in Singapore, said that in the face of such an uncertain future, if we wanted our society to have a sustained vitality, we would have to create a preferred scenario and plan backwards, a strategy called backcasting.
We could no longer depend on forward planning which promotes linear thinking that "can be dangerous in a non-linear future". Backcasting, on the other hand, encourages "imaginative thinking and futures design to make the necessary quantum leap".
Startups embrace innovative ideas. Therefore, when building smart cities in various parts of the world, encouraging and cultivating a pioneering spirit is a key policy because everybody hopes that startups can open up new prospects for the future, bring vitality to the city while creating quality employment opportunities.
However, the success rate of entrepreneurship remains low. Even though universities in Hong Kong are highly commended with overall performance in subjects like engineering, science, technology and computer science within the top 50 in the Times and QS World University rankings, startups struggle in an unfavorable environment, contending the high cost of living and the lack of crowdfunding sources. This is a major reason why our startups seldom appear in the "unicorn" (startup with a valuation of US$1 billion) list.
To foster the development of startups, it is important that the innotech ecology can establish a well-functioning production chain. In addition to the government taking the lead, it is equally important to connect startups with the investors.
However, according to data from Pitchbook, a venture capital research firm, the cases of global investment in the early stage of startups, including seed funding, increased year by year in the past 10 years and reached 13,000 in 2016, but dropped to less than 6,000 in 2017. In other words, it is becoming increasingly difficult for startups to raise funds now.
Smart City Consortium (SCC) has set up a business matching platform, LinkedSmart, which was just launched on Jan. 30 under the leadership of Jason Ngan, chairman of SCC's Investment Committee. The goal of LinkedSmart is to connect the world's investors and startups and further leverage on Hong Kong's advantages as an international financial center to promote innotech development.
With the various measures put forward by Chief Executive Carrie Lam in her policy address in October last year, plus the LinkedSmart platform, I hope a better environment will be established to facilitate the flourishing of Hong Kong's innovative industries and speed up our smart city development.
Dr. Winnie Tang
Honorary Professor, Department of Computer Science, The University of Hong Kong