Is the world’s new capital of innovation in Silicon Valley? Tokyo? Think again. The crown now belongs to a place that blends skyscrapers, factories and a relentless entrepreneurial spirit — the Shenzhen-Hong Kong-Guangzhou cluster, which dethroned Tokyo-Yokohama for the first time in the Global Innovation Index 2025, compiled by the World Intellectual Property Organization — a milestone that is not just symbolic, but a signal that the global map of innovation has shifted, with Hong Kong sitting squarely at its heart.
How did this happen? It’s easy to point at statistics — patents, scientific papers, and venture capital transactions. But those numbers are the result of careful design, not by chance. Shenzhen brought the raw tech muscle, home to Huawei, Tencent, and a roster of cutting-edge startups. Guangzhou contributed industrial scale and a market large enough to test and commercialize new ideas. And Hong Kong supplied what no high-tech ecosystem can thrive without — liquidity, global connections, and institutional trust. Together, they form a synergy that now outperforms every other innovation hub in the world.
A key reason for the cluster’s leap to first place was the inclusion of venture capital transactions as a new metric. This change highlighted Hong Kong’s strength. The city has quietly built one of Asia’s most vibrant venture markets, supported by an open economy, independent legal framework, and access to international capital. In recent years, Hong Kong’s startup ecosystem has seen significant growth, with the number of startups reaching a record 4,694 in 2024, a 10 percent increase from the previous year. Additionally, the fintech sector alone attracted over $1.5 billion in equity placements in July, highlighting the city’s growing appeal to investors. The Hong Kong Stock Exchange and Clearing Ltd has bolstered the ecosystem by introducing special-purpose acquisition companies and patient capital funds, attracting the next generation of global tech enterprises.
Hong Kong is no longer merely a bridge between the Chinese mainland and the wider world — it has the potential to be a driver of global innovation. But potential alone is not enough; the city must continue to innovate, to invest, and to lead
Yet this story is not just about money. Hong Kong has the intellectual firepower to match its financial muscle. The Chinese University of Hong Kong has filed more patents over the past five years than any other local institution, with more than 2,400 approvals. The Hong Kong University of Science and Technology and the University of Hong Kong are emerging as global players in artificial intelligence and biotechnology. Many of these breakthroughs are realized through collaboration with Shenzhen enterprises. AI-driven diagnostic systems and other technologies developed in these partnerships are now deployed across the Guangdong-Hong Kong-Macao Greater Bay Area, proving that cross-border collaboration is not a buzzword — it is working.
Government policy has been another crucial ingredient. Since 2017, Hong Kong has invested nearly HK$200 billion ($25.7 billion) into research infrastructure, applied science, and university-industry collaborations. Recently, the city also launched a HK$10 billion Innovation and Technology Venture Fund aimed at strategic industries: AI, semiconductors, and new energy. Tax incentives and accelerator programs have attracted frontier startups to Hong Kong, significantly expanding the city’s innovation ecosystem in recent years. Meanwhile, Guangzhou has implemented complementary policies, including substantial angel investment support, creating a level of regional coordination that few Western economies can match. These efforts have strengthened the cluster’s overall capacity for innovation and enhanced Hong Kong’s role as a key hub for translating ideas into tangible outcomes.
All of this is cause for celebration, but celebration must be tempered with realism. The metrics that propelled the cluster to first place — patents, academic output, and venture capital — are not equally stable. Venture flows, in particular, can fluctuate with global market sentiment. A sudden downturn could quickly shift the picture. Even more fundamentally, Hong Kong remains light on advanced manufacturing. If it leans too heavily on finance, it risks being a facilitator rather than a creator, a city that funds innovation rather than produces it. In hard-tech industries, where long-term research and industrialization matter, this could become a critical vulnerability.
The path forward is clear. Hong Kong must convert this recognition into sustainable leadership. That means bolstering foundational research, scaling mechanisms to translate ideas into industries, and nurturing an environment that attracts and retains top international talent. Hong Kong’s distinct advantages — its openness, legal certainty, and global connectivity — must remain uncompromised, for they are the glue that holds the ecosystem together.
Even as caution tempers celebration, there is no denying the magnitude of the achievement. The world’s most dynamic innovation corridor no longer runs through Palo Alto or Yokohama; it runs through the labs of Shenzhen, the factories of Guangzhou, and, crucially, through the deal rooms and lecture halls of Hong Kong. The city’s combination of finance, talent, and policy savvy has enabled it to punch far above its geographic weight.
The question now is whether Hong Kong will consolidate this position or rest on its laurels. Rankings are snapshots, not guarantees. Without continuous investments in research infrastructure and industrialization, and without deeper integration of high-value technology commercialization, today’s global recognition could become tomorrow’s historical footnote. Hong Kong is no longer merely a bridge between the Chinese mainland and the wider world — it has the potential to be a driver of global innovation. But potential alone is not enough; the city must continue to innovate, to invest, and to lead.
For now, the moment deserves its applause. The Greater Bay Area has rewritten the rules, and Hong Kong has proved that a city can be small in size but enormous in impact. Yet the work has just begun. Sustaining this position will demand boldness, vision, and strategic patience — the very qualities that Hong Kong has shown it possesses. The world is watching, and for the first time, it is clear that the future of innovation is being written right here, in our own backyard.
The author is chairman of the Asia MarTech Society and sits on the advisory boards of several professional organizations, including two universities.
The views do not necessarily reflect those of China Daily.
