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Friday, May 21, 2021, 00:49
HK's thriving startup scene shows SAR's bright future
By Stephen Phillips
Friday, May 21, 2021, 00:49 By Stephen Phillips

Invest Hong Kong’s annual StartmeupHK Festival will kick off next week to showcase around the world the many dimensions of Hong Kong’s thriving and vibrant startup scene. The theme this year is “Welcome to a Future Unlimited” — a forward-looking agenda with a focus on a prosperous future. The week-long virtual festival will offer entrepreneurs, startups, scale-ups, corporates and investors an amazing opportunity to gain insights and valuable business knowledge from entrepreneurs behind some of the world’s most exciting startups. In other words, a powerful opportunity to share, learn and find inspiration.  

Participants will be in good company, too. Last year, more than 180,000 people from 97 economies around the world attended. That is a pretty clear statement about the level of interest in Hong Kong and confidence in the manifest opportunities that exist.  

This interest is for good reason. Hong Kong’s startup ecosystem has come a very long way since I was a cofounder of a startup here in the early 2000s. That is good news for budding entrepreneurs and it’s good news for Hong Kong. In my work at InvestHK, in addition to passionate local entrepreneurs, I see both success and very keen interest from many ambitious founders from around the world in using Hong Kong to capture opportunities here, the Chinese mainland and other parts of Asia.

Beyond having a great idea, dynamic talent, unbridled passion and a vision to meet an unfulfilled need, startups need a conducive environment to grow and thrive. Some of the most essential ingredients are access to opportunities, proven R&D capabilities and availability of talent, funding, and supportive policies. Hong Kong has all of these.  

It is why our annual survey of startups shows that their number in 2020 was up an impressive 51 percent over 2017, standing at 3,360 (see chart). What’s more, 26 percent of cofounders hail from outside Hong Kong, with the Chinese mainland, the United States, the United Kingdom and Australia leading the way. The other notable finding from the survey is the sectors that provide us with an insight into the future shape of Hong Kong’s economy: fintech, e-commerce, advanced logistics, biotech, data analytics, digitally delivered professional services, and many more.  

For early-stage companies, Hong Kong offers a wide array of exciting opportunities. Hong Kong itself is a mature and sophisticated market, with discerning consumers and many leading-edge, world-class businesses that need — and demand — the very best products and services

So why is Hong Kong so attractive to them? Let’s start with the basics. Hong Kong offers a business-friendly environment, a convenient geographical location at the heart of Asia and a free and open market. Hong Kong’s cosmopolitan culture has shaped a uniquely favorable environment for attracting the best global talent, startups and entrepreneurs, with many drawn to Hong Kong not only for business but also because of our vibrant lifestyle and beautiful scenery. The close-knit startup community is also incredibly welcoming and supportive; many of them are playing a vital role in the StartmeupHK Festival.  

Access to and seizing opportunity is, of course, what makes for a successful business. For early-stage companies, Hong Kong offers a wide array of exciting opportunities. Hong Kong itself is a mature and sophisticated market, with discerning consumers and many leading-edge, world-class businesses that need — and demand — the very best products and services. Of relevance to startups, Hong Kong’s commitment to net zero carbon emissions by 2050, combined with the country’s target of 2060, will also create new opportunities to meet the shared global challenge of climate change.

Hong Kong is also an ideal base for developing a regional business. It offers ready access to the Chinese mainland market and the exciting developments taking place in the Guangdong-Hong Kong-Macao Greater Bay Area initiative. With its focus on innovation and financial services, the Greater Bay Area can be served from Hong Kong. At the same time, Hong Kong is ideally located to tap into the high potential growth markets of the 10-member Association of Southeast Asian Nations — including the fast-growing trade and investment flows between the Greater Bay Area and ASEAN, something many of the startups I talk to are pursuing. Accelerated by the rapid pivot to digital delivery arising from the pandemic, the digital Belt and Road is now an area of enormous potential. This plays so well to startups and scale-ups.

Talent is the lifeblood of a startup. As home to five universities on the QS World University Ranking top 100 list, Hong Kong offers a strong local talent pool with the skills, knowledge and international outlook to drive business growth in Hong Kong and beyond. Mainland and overseas talent is also drawn to Hong Kong, supported by a number of immigration programs offered by the Hong Kong SAR government. 

The universities too have incredibly strong R&D credentials across a number of key disciplines, opening up collaborative opportunities. The Hong Kong Science and Technology Park provides a world-class base for R&D-driven businesses, including state-of-the-art laboratories and shared facilities. The Science Park is also home to two research clusters focused on healthcare technologies and artificial intelligence and robotics, with strong connectivity to local, mainland and international universities. Meanwhile, Cyberport is the flagship base for digital technology industries including fintech, smart living, cybersecurity, blockchain, esports and much more. 

Furthermore, the Hong Kong-Shenzhen Innovation and Technology Park, which is underway at the Lok Ma Chau Loop next to the Shenzhen border, will provide a world-class innovation hub at the very heart of the Greater Bay Area and the opportunities that means.

Funding is the fuel that enables companies to grow. A wide range of options exists from both government programs and private sources. The Hong Kong Special Administrative Region government is committed to supporting and developing startup and I&T companies. A comprehensive range of programs is available to provide support at each and every stage of the business life cycle from setup, hiring, business development, R&D and overseas expansion.

This spectrum of sources is mirrored too in the private sector. A wide range of incubators and accelerators supports early-stage startups, while venture capital and private equity firms assist ventures to scale their business to the next stage. A growing number of family offices, to which InvestHK provides support through a dedicated family office team, adds to the capital pool seeking high quality investment opportunities. This is underpinned by a range of new policy measures, such as the Limited Partnership Fund Regime. Beyond funding, VC and PE firms provide important mentorship, market insights, guidance and access to networks that take startups to the next level.

In time, successful startups can also list in Hong Kong, with some attractive listing rules for pre-revenue biotech companies and weighted voting rights being of particular relevance. 

So as we all look toward emerging from the pandemic — to a future unlimited — Hong Kong offers the ideal testing ground and launchpad for startups, as well as mid-stage to mature startups looking to expand and scale up. In short, Hong Kong is a perfect launchpad for helping businesses to grow and succeed. What I share in this piece is just the tip of the iceberg. If you would like to find out more, join us at the StartmeupHK Festival to hear even more about our first-class proposition.



The author is director-general of investment promotion, Invest Hong Kong. 

The views do not necessarily reflect those of China Daily.

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