In the current era of technological disruption and shifting economic alliances, the Hong Kong Special Administrative Region is executing a deliberate and strategic transformation to reinvent itself from a traditional financial and trade center into a leading global innovation and technology hub. This transition, symbolized by the recent introduction of a fifth cohort of 18 high-potential enterprises, represents a calculated shift in economic policy designed to secure the SAR’s future competitiveness within China’s development landscape and the global economy.

Anatomy of strategic transformation

The arrival of this latest group of enterprises marks a significant milestone. The initiative has now attracted over 100 companies, which have committed to bring in HK$60 billion ($7.72 billion) in investments and create 22,000 jobs, signaling the emergence of a new economic paradigm. A key indicator of success is the composition of this cohort, which boasts 40 percent international representation, including three global pharmaceutical leaders. This diversity demonstrates that Hong Kong’s appeal transcends geographical and sectoral limitations and reflects a sophisticated understanding by the SAR government of the nature of global competition. This is not an accidental shift but the result of a well-considered economic development strategy that deliberately moves beyond traditional reliance on financial services, trade, and logistics toward a more diversified, innovation-driven model.

HK’s renewed global appeal

Hong Kong’s ability to attract significant overseas enterprises, particularly leading pharmaceutical companies like Roche, amid global geopolitical tensions speaks volumes about its enduring strengths. This success signals the city’s emerging status as a life-sciences innovation center, an achievement that hinges on robust intellectual property protection, regulatory clarity, and scientific talent — areas where it has made substantial investments.

While Hong Kong has traditionally been described as a superconnector between the Chinese mainland and global markets, its role is evolving into what might be termed an “innovation synthesizer”. It’s becoming a place where Eastern and Western technological expertise, capital, and market knowledge converge to create unique competitive advantages. The Hong Kong-Shenzhen Innovation and Technology Park (HK-SZ I&T Park) in the Lok Ma Chau Loop is a prime example, serving as a testing ground for policies that facilitate the cross-border flow of talent, capital, goods, and data, thereby creating a unique environment for collaborative innovation.

The government’s strategy demonstrates a sophisticated understanding of how modern innovation ecosystems develop. Financial Secretary Paul Chan Mo-po’s emphasis on importing innovative ideas and advanced technologies alongside capital investment highlights that true technological advancement requires the migration of knowledge systems and technical capabilities. This focus on attracting enterprises with these intangible assets represents economic planning of a high order.

Testimonials from established companies, such as Vobile Group, point to Hong Kong’s foundational advantages: a predictable legal environment, English-language capability, and international business compatibility. These attributes, cultivated over generations, are critical for knowledge-intensive enterprises and form the bedrock upon which the new innovation ecosystem is being built.

Hong Kong’s journey offers valuable insights for economies navigating technological disruption. Its deliberate approach — building on existing strengths like its legal system and global connectivity while actively cultivating new capabilities in innovation — provides a model for how mature economies can reinvent themselves

Greater Bay Area dimension

Hong Kong’s innovation strategy cannot be viewed in isolation; it is intrinsically linked to its role within the Guangdong-Hong Kong-Macao Greater Bay Area. The enterprise attraction initiative demonstrates sophisticated spatial awareness, positioning Hong Kong as the international research and development and financing hub within a regional ecosystem that includes Shenzhen’s manufacturing prowess and Guangzhou’s industrial base. This integration allows enterprises to leverage Hong Kong’s strengths in basic research and intelligence protection while maintaining access to the world-class manufacturing and scaling capabilities available elsewhere in the region.

The HK-SZ I&T Park is critical as a pioneer in bridging the “one country, two systems” divide. Its planned facilitation of cross-border data flows, in particular, could establish Hong Kong as a leader in regional data governance — a critical issue for modern technological enterprises and a potential template for innovation zones globally.

From superconnector to innovation incubator

The attraction program suggests an evolution beyond the superconnector function toward a more active role as an innovation incubator. The concentration of pharmaceutical enterprises indicates an emerging specialization in life sciences — a sector that aligns perfectly with Hong Kong’s research capabilities, regulatory standards, and healthcare infrastructure. This represents a maturation of the city’s strategy, moving from general ecosystem development to targeted capacity building in areas of comparative advantage.

This transformation represents a sophisticated blending of proactive government intervention with market-based mechanisms. The approach can be described as “directed flexibility” — maintaining Hong Kong’s famous regulatory agility and business-friendly environment while actively addressing market failures in innovation ecosystems. The tailored recruitment of enterprises, which involves understanding specific corporate needs and crafting appropriate support packages, demonstrates a new model of public-private partnership that provides strategic direction without stifling market vitality.

Hong Kong’s consistent ranking as the world’s freest economy, its position as a top global financial center, and the strength of its higher education system (with five universities in the global top 100) provide the foundational conditions for this innovation drive. These assets create a virtuous cycle: attracting talent, generating knowledge spillovers, and supporting enterprise formation.

To sustain this momentum, I propose the following strategies: Develop specialized “regulatory sandboxes” for emerging technologies like artificial intelligence in healthcare and fintech; create a “Greater Bay Area talent pass” to facilitate seamless movement of researchers and entrepreneurs throughout the region; establish a “Hong Kong innovation financing platform” to create a comprehensive funding ecosystem; build specialized infrastructure such as bio-manufacturing facilities and quantum computing centers; and launch a “Hong Kong global technology fellowship” to attract exceptional international talent.

Conclusion: a model of strategic reinvention

Hong Kong’s journey offers valuable insights for economies navigating technological disruption. Its deliberate approach — building on existing strengths like its legal system and global connectivity while actively cultivating new capabilities in innovation — provides a model for how mature economies can reinvent themselves. This transformation carries significance beyond economic metrics; by developing new growth engines and creating high-quality employment, it strengthens social stability and enhances the appeal of the “one country, two systems” framework. The successful implementation of this innovation strategy is evidence of Hong Kong’s legendary resilience and its capacity to ensure continued relevance and prosperity in the century ahead.

The author is a member of the Fujian Provincial Committee of the Chinese People’s Political Consultative Conference, and vice-president of the Internet Professional Association.

The views do not necessarily reflect those of China Daily.