Needless to say, the busiest place in Hong Kong is Central, where the financial industry gathers. Crowds of people are surging, shoulder to shoulder, and during the rush hour, well-dressed migrant workers line up in long lines waiting for the bus;

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The busiest place in Hong Kong, needless to say, is Central, where the financial industry gathers.

Crowds of people are surging, shoulder to shoulder. During the rush hour, well-dressed migrant workers line up in long lines waiting for the bus; even the Kwai Tsing Pier, where the trade and transportation industry gathers, has mountains of containers, and the arms of cranes stretch out to the sky, row upon row.

In contrast, the Science Park is sparsely populated and located in a remote location. If you take a taxi, the driver may not even know where it is at the first time. However, the Hong Kong government is making a rapid change, and many major actions in the future may be carried out in the Science Park.

As a financial center and business capital, Hong Kong has embarked on the road of technological innovation, but it started late and faced many difficulties. But it is a path that must be taken. Hong Kong’s new chief executive Li Ka-chiu said, “Without technological innovation, there is no future.” Huang Keqiang, CEO of Hong Kong Science and Technology Park, also said that "technological innovation" is not a multiple-choice question for Hong Kong today, but a must-answer question.

In the current global transformation, if Hong Kong does well in science and technology innovation, it will become a financial center, a trade center and a science and technology innovation center. It will play an unprecedentedly important role in China's economic landscape in the future.

However, if Hong Kong wants to build a "technological innovation" future, it is necessary to first think about three questions: "Why engage in science and technology innovation? What are the difficulties? How to go forward?"

01

Hong Kong’s “four wheels”

You might as well take stock first, what does Hong Kong have now? Hong Kong's two economic pillars are trade logistics and financial services, each accounting for about 20% of the GDP. The booming development of these two industries,

, is not unrelated to Hong Kong's own efforts, but it is also "God will give you food".

When Hong Kong was first opened, it was a trade base established by the British to open up the Chinese market. After the reform and opening up, this unique location advantage became more prominent. Although China is opening up to the outside world, it is actually "ajar". Many industries still have tariffs, and Western high-tech embargoes still exist. Countries treat Hong Kong and Mainland China differently. Take the United States as an example. The United States passed the United States-Hong Kong Policy Act in 1992, authorizing the U.S. government to continue to treat Hong Kong differently from mainland China in trade, including tariffs and export controls, after the handover of Hong Kong's sovereignty.

The trade status is very different, but the distance is only across a river, which provides Hong Kong with an excellent opportunity-re-export trade.

Hong Kong profits from charging "handling fees" in re-export trade. Taking 2018 as an example, the volume of re-export trade was about three times Hong Kong's GDP. Hong Kong only needs to charge a service fee of about 6%, and the scale can reach 20% of GDP. Through re-export trade, Hong Kong, which has almost no manufacturing industry, has become the sixth largest exporter of goods in the world.

Another advantage of Hong Kong is the financial industry. Hong Kong has free flow of funds and is under China's sovereignty. It has naturally become a center for China's financial circulation in extracorporeal circulation. It is not only the listing destination for a large number of high-quality companies, but also the largest in the world. RMB offshore business center. Trade and finance have thus become the "two wheels" driving Hong Kong's development. However, in recent years, relying solely on these two wheels seems to be running more and more unstable:

On the one hand, the confrontation between China and the United States has become increasingly fierce. The United States has threatened to cancel Hong Kong’s unique trading status, coupled with the Hainan Free Trade Island and other Policies will dilute Hong Kong's advantages to some extent and cause Hong Kong's throughput ranking to continue to decline. On the other hand, the financial industry's ability to absorb employment is extremely poor, accounting for about 20% of the economy and creating only 7% of jobs. A large number of employed people have been squeezed into low-end jobs in the catering and retail industries, and these jobs have limited room for advancement, hindering social mobility and widening the gap between rich and poor. Hong Kong society has gradually realized that technological innovation lies in solving problems.

In addition to the two wheels of an international financial center and an international shipping center, the future of Hong Kong should also include the northern city as a strategic economic hinterland and the establishment of an international innovation and technology center as a strategic breakthrough. "It is like the close cooperation between the four wheels of a car. ".

02

Hong Kong’s resource curse

Hong Kong’s actions in science and technology innovation are not too early. In 1999, it established a HK$5 billion “Innovation and Technology Fund”. But the pace is not big. The annual investment of the above-mentioned funds is not much. Even if it has increased significantly in the past two years, it only totals HK$4.8 billion.

In contrast, " Shenzhen Venture Capital " ( Shenzhen Innovation Investment Group ), also established in 1999, has developed rapidly. In the first half of this year alone, it has invested in 1,463 projects, with a cumulative investment amount of approximately 859 billion yuan. One of the reasons why Hong Kong started early and made such slow progress may be observed by applying the theory of “resource curse”.

Hong Kong’s unique location advantages bring about the re-export trade and financial industry, which are like some kind of natural resources. Funds, talents, and policies are all tilted towards these fields, and the scientific and technological innovation industry, which is full of risks, is obviously not as safe as real estate investment. Just like the rich oil resources in countries in the Middle East, social industries are heavily dependent on oil.

This awareness is deeply rooted in the fabric of Hong Kong society.

For example, it has become a common practice for the top scorers in the Hong Kong DSE exam to apply for medical studies every year, because doctors are the most stable choice to enter the middle and upper class. Most of the remaining students will choose business majors. There are very few students choosing science and engineering subjects. Even in 2020, one of the four top students admitted to Hong Kong University of Science and Technology enrolled in engineering subjects and was reported by the media. There is also a resource curse, which is not a curse from abundant resources, but a curse from scarcity, and that is land. Land anxiety has long shrouded Hong Kong, so industrial development often takes land as the starting point.

For example, in 1999, Zhang Rujing, who resigned from TSMC, hoped to implement the "Silicon Port" plan in Hong Kong. However, at that time, Hong Kong public opinion questioned that it was actually "land speculation," and the Hong Kong government ultimately did not allocate land. As everyone knows what happened later, the project finally landed in Shanghai and received a piece of almost free land with an additional five years of tax exemption. This is now " SMIC ", with a market value that once exceeded 600 billion yuan. Of course, the difficulties do not only come from within Hong Kong. Hong Kong is limited in size, and the development of science and technology innovation must cooperate with the mainland. However, in a business context, although Hong Kong has returned to China, it is still outside the country and faces many problems.

For example, a scholar from the School of Medicine of the Chinese University of Hong Kong has developed technologies such as non-invasive pregnancy tests and cancer screenings, which have promising market prospects. Rapidly achieving results in the Hong Kong local market, the first step of expansion was to target mainland China, but was hampered by China's regulations that prohibit the export of human genetic information.

Both the mainland and Hong Kong are aware of this problem, so you will see that the planning of the northern metropolitan area and the Greater Bay Area is accelerating in the past two years.

03

has done a good job, but it is not enough

To be fair, despite the difficulties, Hong Kong's scientific and technological innovation has still made great achievements. For example, the Hong Kong Science Park, which just celebrated its 20th anniversary, has 17,000 jobs in the park, including 11,000 R&D personnel. This year, 278 start-ups have graduated from the incubation program of the Science and Technology Parks Corporation.

Looking at the entire Hong Kong, the number of people employed in Hong Kong's science and technology industry has also increased from about 35,000 in 2014 to about 45,000 in 2019; the number of start-ups has increased from about 1,070 in 2014 to about 3,800 in 2021.

In fact, Hong Kong's scientific research strength has always been strong. Hong Kong's weakness lies in how to transform scientific research results into market results.

"The scientific research level of Hong Kong universities is good, and several universities are ranked in the top 100 in the world. However, Hong Kong has the achievements of scientific and technological innovation, and it needs to be commercialized in terms of the transformation of achievements. The entire Guangdong-Hong Kong-Macao Greater Bay Area There is a huge market for in the district, and in the future we should cooperate with more scientific and technological innovation institutions and companies in Shenzhen," said Hong Kong Legislative Council member Chen Zhongni.

is actually like DJI . Even if it is the fruit of successful cooperation between Hong Kong and Shenzhen. DJI was first incubated at Hong Kong University of Science and Technology, and then took root in Shenzhen. It achieved market-level success with the help of the mainland's superior resources.

In fact, the technology field is also facing a new change. It is called "Made in China 2025" in China, " Industry 4.0" in Germany, and " Industrial Internet " in the United States. The names are different, but the connotations are similar. , which can be roughly understood as the development of advanced manufacturing industries that are based on new technologies and smart production and do not require too much land or labor. This may be an opportunity for Hong Kong. Hong Kong's advantages are abundant funds, low taxes, and a concentration of high-end universities. Its disadvantages are high labor costs and high land costs. "Industry 4.0" can precisely leverage strengths and avoid weaknesses.

The new Chief Executive Li Jiachao is committed to improving officialdom, and his political platform emphasizes the performance appraisal of officials, which may help promote scientific and technological innovation. If we look at China as a whole, the country is in the midst of a huge transition in the transformation and upgrading of its economic structure and the promotion of high-quality development. If it succeeds, it will enter the ranks of developed countries, and if it fails, it will fall into the middle-income trap.

In this revolution, if Hong Kong does well in science and technology innovation, it will become a financial center, a trade center and a science and technology innovation center. Its position in China's future economic landscape will be unprecedentedly important.

If we take the global perspective, the confrontation between China and the United States has become increasingly serious, especially in the field of science and technology, where various embargoes and restrictions are emerging one after another. For Hong Kong, this situation coexists with danger and opportunity: the danger is that it is tied to China's economic train, and Western countries' restrictions on China are beginning to affect Hong Kong; the opportunity is that for China, which is already the world's second economy, it cannot To avoid extensive connections with the global economy, Hong Kong may be more important as a "super contact" than in the previous decade, and this is no exception in the field of science and technology innovation.

If we turn our perspective back to Hong Kong again, after more than a hundred years of vigorous development, the economy has slowed down and the structure has become unbalanced. It is urgent to find new momentum. Just like a big ship, it has both the wind and the danger of rocks, but when it crosses it, it is a new continent.