HK’s economy needs to vault its brick-and-mortar past. It has abundant investment capital but lacks the human capital to drive the new initiatives. Shenzhen and Singapore race ahead to leverage the new economy. Chai Hua finds Hong Kong twiddling visa procedures, without a holistic approach to attract foreign talent.
(INFOGRAPHIC: DONG KAI, MOK KWOK-CHEONG / CHINA DAILY)
The old Hong Kong economy relied on its “four pillars” of financial hub, tourism, trade logistics and professional services. The Task Force on Economic Challenges recommended six new sectors to promote, where the city enjoys unique advantages: innovation and technology, cultural and creative, environment, medical, education, and testing and certification services. That was a decade ago. We are still struggling to secure the necessary talent to make this transition work.
For the knowledge industries of the 21st century, Hong Kong has ample investment funds to drive new initiatives, digital startups and high-tech professional services. However, it suffers a crippling deficit of premium talent and expertise to lead the six new sectors identified for growth. The city needs to do much more than tweak visa programs to attract and retain foreign talent. It has lost a decade already.
HK$50b for tech hub
In the 2018-19 Budget, Financial Secretary Paul Chan Mo-po allocated HK$50 billion (US$6.4 billion) to innovation and technology expenditure. Chief Executive Carrie Lam Cheng Yuet-ngor wants Hong Kong to become a technology hub. The Science and Technology Park gets HK$40 billion. HK$20 billion of that pours into the Lok Ma Chau Loop, as only the first phase of the Hong Kong-Shenzhen Innovation and Technology Park.
The Science Park gets HK$10 billion to upgrade facilities for its tenants. Another HK$10 billion is for world-class research institutes or technology companies, to develop commercial applications in biotechnology, artificial intelligence and robotics, at the park.
Far more critical to Hong Kong’s economic transformation is the human capital of IT expertise at the heart of innovation across all industries. We need to assemble a critical mass of experts to drive AI, financial technology (fintech), cybersecurity, data analytics, robotics, blockchains, medical diagnostics, etc. It is also vital to secure managerial leadership to execute innovation projects.
The 2015 Hays Asia Salary Guide indicates there is an increasing preference among multinational companies for candidates already based in the region, who bring East-West cultural sensitivity to their work relationships and client-facing interaction. Local employers find the Hong Kong diaspora attractive, as they generally do not need housing packages, and have acquired a mindset of professional management.
The successful applicants for the TechTAS scheme are also eligible under the GEP and ASMTP, so why would they want to get into all that trouble?
Stephen Barnes, co-founder of Hong Kong Visa Centre
Multiple visa schemes
The Hong Kong Immigration Department (ImmD) has five visa programs for Chinese mainland and foreign talent. The visa programs are being accelerated with relaxation of conditions and quicker approvals. But that is only part of the matrix for foreign talent to consider relocating to Hong Kong. Housing and international schooling for children are negatives for the individual, and add costs for employers. Air pollution and high living expenses lower the city’s attractiveness for families with young children.
In 2006, the Immigration Department introduced the Quality Migrant Admission Scheme (QMAS) limited to an annual 1,000 quota for highly skilled or talented individuals. Unlike the General Employment Policy (GEP) for foreigners and the Admission Scheme for Mainland Talent and Professionals (ASMTP), applicants for QMAS are not required to secure prior local employment before entry.
Only 555 QMAS visas were granted by November 2018. The full year stats will be released next month. The QMAS yields paltry numbers compared to the 50,000 professionals approved under GEP and ASMTP schemes in 2017. Professor John Bacon-Shone of the Social Sciences Research Centre at the University of Hong Kong urges regular review of the QMAS criteria and quota, as business trends shift rapidly for the highly competitive talent market.
Problematic visa process
“QMAS enquiries are increasing in the last two years,” said Jiang Chencheng, CEO of Social Networks Consultancy. She has helped dozens of applicants through this scheme. “Only top talent for specific industries are granted. They need to have patents, international awards, or degrees from global top 100 academies.”
Besides lofty benchmarks, she found it onerous to apply. “The review period is as long as one year, or at least nine months,” she said, with a market price of HK$60,000 to 80,000 per case for service agencies. The ImmD maintains “it is imperative for us to collect and verify the necessary documents from the applicants. The non-statutory ‘Advisory Committee’ will further assess them”. The office announces four selection results each year. As the scheme is an immigration visa, the evaluation is very strict.
Talent list and tech scheme
To better match visa applicants to Hong Kong needs, the government published the Talent List in August, awarding bonus points for QMAS candidates in 11 specific industries. In three months, five QMAS applications were eligible for the bonus points under the Talent List and all have been allotted quotas, states the ImmD.
A pilot Technology Talent Admission Scheme (TechTAS) was introduced in June 2018 to speed up applications for firms at the Science Park and Cyberport in seven specific areas. The Innovation and Technology Commission (ITC) granted 219 approvals for firms incubated in the two tech hubs to recruit non-local talent between June 2018 and January 2019. Among them, 68 were alloted to Cyberport to recruit non-local talent for AI, cybersecurity, data analytics and fintech.
There are 2,000 tech firms registered with the two facilities. A 2015 survey of technology companies in Hong Kong indicated 90 percent face difficulty filling vacancies. The TechTAS visa program is encouraging but the chronic talent shortage remains.
“I have not got any enquires about the scheme,” said Stephen Barnes, co-founder of Hong Kong Visa Centre, a visa application consultancy firm. Barnes has been working in the industry for 25 years and processes 500 applicants each year on average. “It is targeting very narrow fields of technology and only for programs set up in the two technology parks,” he said.
Barnes feels it is a “burdensome” program, requiring employers to advertise the vacancy first to show there are no suitable local applicants, then apply for the quota, and then hire more local employees per the visa conditions, to compensate for foreign recruitment. “The successful applicants for the TechTAS scheme are also eligible under the GEP and ASMTP, so why would they want to get into all that trouble?”
The GEP is first choice for expats entering Hong Kong. The success rate of the GEP and ASMTP averages 85 percent, per ImmD data, while QMAS yields less than 20 percent.
Hurdles for startups
Barnes suggests attracting potential startups and entrepreneurs by offering an easy-to-apply, one-year trial visa to be strictly reviewed before extension. In 2015 the government introduced the “Startup Visa” under the GEP where applicants within a government-approved program could be fast-tracked.
In addition, the Entry for Investment for foreign entrepreneurs (Entrevisa) was offered to applicants who can prove they can make a “substantial contribution to the economy of Hong Kong”. Many startups find that impossible before they even start, said Barnes.
By comparison, Singapore’s “Entrepreneur Pass” (Entrepass) only requires the applicant’s company, if registered, to be less than six months old, while Hong Kong’s Entrevisa has more qualifying hurdles like business turnover, number of jobs created, and quantum of investment.
Easier in S’pore and mainland?
For foreign startups, Hong Kong and Singapore both evaluate the core operators and investors, but the latter also recognizes intellectual property, research collaboration, and track record. In 2017, Singapore broadened the criteria for startups to attract more talent, extending validity to two years.
Many Chinese mainland cities offer preferential policies, tax breaks, and incentives to attract overseas talent. Shenzhen categorizes several levels of talent with different amounts of cash incentives, housing subsidies, and even investment in innovative projects up to millions of yuan. Shenzhen is well established as the Digital City of China with all the major local digital corporations operating there, as a magnet for new economy investment and aspiring talent.
• Foreign talent consider multiple criteria before relocating
• The decision to relocate factors children and families too
• Extreme air pollution is a health hazard most families avoid
• A high salary without affordable, livable housing is unattractive
• What lessons from Singapore in recruiting foreign IT talent?
• Can HK proactively pitch to the mainland and Asia to plug its talent gaps?
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HONG KONG NEWS