Startups see growing government support

Hong Kong

IMAGINE being able to move Silicon Valley from the United States' West Coast and placing the technology hub right next to the eastern pulsating metropolis of New York City.

The business and economic potential of such a collaboration and the spark it could give to innovation and enterprise are exciting prospects that could, in future, be lived out halfway around the world in Hong Kong, said Kevin Au, co-founder and director of the Chinese University of Hong Kong's Center for Entrepreneurship.

On Jan 3, Hong Kong signed a landmark memorandum of understanding with tech-savvy Shenzhen - China's "Silicon Valley in the making" - to build an 87-hectare joint innovation and technology park at the Lok Ma Chau border.

The Hong Kong/Shenzhen Innovation and Technology Park "will be the largest innovation and technology platform ever established in the history of Hong Kong", said city chief executive Leung Chun-ying.

The deal is the latest move by the Hong Kong government aimed at developing the city's innovation and startup ecosystem, which has been bolstered in recent years by the growth in incubators, accelerator programmes and co-working spaces.

These have been helping to fan the city's entrepreneurial spirit, which has long been a trademark of Hong Kong's cultural and economic dynamism, said Prof Au.

"In the past, incubators focused on tech, but now they also (cater to startups in) finance, retailing, branding ... and that's exciting," he told The Business Times.

"The entrepreneurial spirit in Hong Kong is pretty healthy as I see it, it's definitely growing."

Hong Kong's vibrancy and proximity to mainland China continue to attract local and global entrepreneurs looking to serve larger markets.

This is especially so for enterprises in technology and manufacturing, said Prof Au, but beyond these industries, Hong Kong is also increasingly seeing new ventures producing new services for more traditional industries such as in the food and beverage sector.

The "ecosystem has become more agile", and with it, there is more fostering of the entrepreneurial spirit, he said.

That enterprising drive sets Hong Kong apart from competitor Singapore, say some observers.

"Hongkongers have a much stronger entrepreneurial spirit than Singaporeans," Hong Kong-born Singaporean serial entrepreneur Darius Cheung, the CEO of property search portal 99.co, told BT.

A global entrepreneurship survey by website host company GoDaddy released in September showed that two in five (41 per cent) respondents from Singapore plan to either start a small business, or be self-employed within the next 10 years.

This was lower than the two in three (68 per cent) Hong Kong respondents who said that they plan to do likewise.

"Singapore has an extremely varied and highly-developed support system for local entrepreneurs, which is great because it gives them a better starting position. However, such nurturing could also discourage the fighting spirit," said entrepreneur and investor Serguei Beloussov, the founder and CEO of Singapore-based data protection firm Acronis.

But while Singapore may lack the hunger of Hongkongers, the city-state's entrepreneurial ecosystem has still "grown tremendously in the last decade", said Mr Cheung.

"The ideas (in Hong Kong) tend to be a lot smaller and less scalable," he said. "Singapore has better DNA to build large scalable tech innovation that can be globally competitive."

He added that Singapore has benefited from a "rising tide of talents", particularly in engineering; a "unique window of opportunity" in the South-east Asian market driven by rapid economic growth, the rise of the middle class and technology adoption; as well as the abundance of government infrastructure supporting and funding the incubation of companies until they are are globally competitive.

Singapore Minister for Trade and Industry (Industry) S Iswaran said at the Entrepreneur of the Year Award ceremony in November that the city-state's "future competitiveness and growth rests critically on innovation and productivity" with entrepreneurs and small and medium-sized enterprises (SMEs) "at the frontline of this effort".

He added that thegovernment has a series of measures and programmes to help SMEs, such as SME Centres and trade chambers.

It is such robust support from the state that has helped boost entrepreneurship in Singapore, something Hong Kong's administration can learn from, said Prof Au.

"Singapore has a much larger government which is also a lot more competent and very reactive to the needs of the economy," he said.

Hong Kong's government has made recent strides to better support startups, introducing measures last year such as the HK$200 million (S$37.1 million) Cyberport Macro Fund to help local startups and the HK$2 billion Innovation and Technology Venture Fund aimed at encouraging increased funding from private venture funds in startups through a government matching process.

Add to those the building of the Hong Kong/Shenzhen park that could, in the words of Mr Leung, create "unprecedented space and opportunities for the development of innovation and technology".

It is technology after all, that will be the key enabler of enterprises to come, said Roger Chen, GoDaddy's vice-president of Asia, noting that his company's survey results pointed to "continual growth in entrepreneurship" in both Hong Kong and Singapore.

He added: "By embracing the dynamic changes in technology and learning to adapt, this will lead to a greater influx of entrepreneurs into both (Hong Kong and Singapore) economies in the years to come."