HK has edge for start-ups despite size
WHILE incubators on the Chinese mainland have been in heated discussion over their irrational expansion and ability to achieve sustainable development, Hong Kong’s worry is whether the city can retain promising start-ups and create more in a relatively sm
But the positive aspect is that the situation is developing in a direction that could make Hong Kong a global technology hub, industry insiders say.
According to a survey by Invest Hong Kong, the city’s investment-promotion agency, there were 1,558 start-ups in the city as of August last year, representing 46-per-cent growth year on year.
Herman Lam Heung-yeung, chief executive officer at Hong Kong Cyberport Management Co, told mainland media that only 25 start-ups applied for incubation programmes in Cyberport in 2006, but the number of applicants for the Cyberport Creative Micro Fund and the Cyberport Incubation Programme had risen to more than 1,000 last year.
Different from incubators on the mainland, a large number of which rely on office rents from start-ups to survive, Hong Kong incubators are competing with one another both in the quality of service and speciality, with each having a theme, says Peter Mok, head of incubation programmes at Hong Kong Science and Technology Parks Corp (HKSTP).
They are also not just targeting local start-up groups, which are still relatively small, but serving a global start-up community, with entrepreneurs from all over the world flocking in.
According to Mok, among some 240 incubatees in HKSTP’s three incubation programmes, about 20 per cent are from non-Hong Kong-based enterprises.
One of the core advantages Hong Kong incubators have is the high level of internationalisation, Lam told mainland media.
A representative at Cyberport said that as of March 31, it had helped 43 companies to expand globally. But in terms of size, Hong Kong is a small market compared with the mainland. And, according to the representative, raising funds is a major obstacle for start-ups in the city, especially those looking for funding between seeding rounds and Series A.
Moreover, the growing outflow of entrepreneurs and innovative talents has sparked concern that Hong Kong’s innovative capability will be further undermined.
Jordan Lam, a Hong Kong entrepreneur, moved his company to the Qianhai Shenzhen-Hong Kong Youth Innovation and Entrepreneur Hub (E hub) in Shenzhen this year. Compared with Cyberport, he said, the Houde Entrepreneur Incubator in the E hub can provide more commercial resources.
“Here, we can get to know people in various industries, such as the real-estate and hotel sectors. For start-ups, the most important thing is to be recognisable,” said Lam, a director of Fusquare Technology Co, which specialises in providing intelligent control systems for buildings.
Experts, however, see the development in a positive light.
“It makes perfect sense for start-ups to extend their operations to the mainland market,” said Elaine Ann, honorary project director of the Centre for Entrepreneurship at the Chinese University of Hong Kong and founder and CEO of Kaizor Innovation.
Mok said: “We need mobility to ensure that the best people get to the best places.”
What really makes Hong Kong attractive to start-ups, he said, is a favourable entrepreneurial environment, and this is something the government should strive to create, he said.
“The government needs to support various industries in an appropriate way in terms of policies to facilitate business development and eliminate unnecessary constraints and hurdles, and to enforce very strict rules to ensure that Hong Kong is a level playing field for everyone.”
In Mok’s view, the biggest challenge that could affect Hong Kong’s technology development is the change of mindset among its people, which he called “cultural shift”.Young people, parents and educators, he said, need to gain a deeper understanding of technology and entrepreneurship.
Hilary Szymujko, Brinc’s head of programmes, also cited access to talents as one of the biggest problems facing start-ups in Hong Kong. But she said the exciting thing was there is “a lot of great interest and growing support” for young people to get involved in entrepreneurship at present.
For incubators, meanwhile, finding a unique position to gain a “competitive edge” is the key.
Ann said: “Incubators and entrepreneurs should see more outside Hong Kong. Then it will be clearer how Hong Kong can stand out on the world stage.”
