Photo credit: Esri China (Hong Kong)
The Global Competitiveness Report 2016–2017 released in late September by the World Economic Forum ranked Hong Kong as the 9th most competitive, down two positions from last year, while Singapore remained a strong number two for the sixth year in a row, also the highest in the region. Shortly afterwards, a professional accounting body, CPA Australia, expressed its concerns regarding Hong Kong after reviewing its economic sentiment survey. Fifty-six per cent of its respondents anticipated a decline in Hong Kong’s competitiveness next year. Ouch.
What has dragged down Hong Kong’s competitiveness is our lagging “far behind the world’s innovation powerhouses” accordingly to the World Economic Forum’s analysis. CPA Australia also pointed out that Singapore, one of the markets that challenges Hong Kong most, has benefited from its development in FinTech which has become one of the driving forces of its strong economy. Therefore the institution urged the Hong Kong government to provide greater support to spur businesses and entrepreneurs to undertake innovation.
Frankly, it comes to a consensus that the development of innovative technology and new economy is the key for Hong Kong to improve its competitiveness and thus to boost the economy.
Singapore lets it grow
Recently, a few friends simultaneously mentioned an app after touring in neighbouring countries. The taxi-hailing app Grab which was originated in Singapore is a Southeast Asia version of Uber with much higher popularity. You can have the fare estimate at the time of booking without the worry of increase due to traffic jam, known as ‘surge pricing’ on the Uber network. Not only providing taxi and private car hire, motorbike service is also available in countries like Thailand and Indonesia. The company also offers services like courier and food delivery.
Grab was launched in 2012 and has sourced equity financing since 2014. Two years down the road, it has raised funds six times with a fresh capital injection of US$750 million (approx. HK$5.6 billion) announced mid- last month, making it the best funded technology startup in the region. With the latest round of fundraising which was led by Japan’s SoftBank, the valuation of Grab is estimated to reach over US$3 billion (HK$23.3 billion). Back in Hong Kong, we don’t even have a clear directive on the legal status of new economies like Uber.
According to a research from Asian Venture Capital Journal, Singapore has in the last four years surpassed Hong Kong in terms of the dollar value of venture capital investments made (Singapore US$0.7 billion vs. Hong Kong US$0.1 billion last year). As well, the number of deals signed with Singaporean companies outperforms Hong Kong four to five times.
A media portal Tech in Asia also reported that startups in Asia received a record of US$23.4 billion in the second quarter this year, up 20% from the previous quarter. While Singapore ranked 7th and Hong Kong 8th in terms of total deals and total amount invested, the difference between the two markets, however, is significant. Compared with what Hong Kong was able to accomplish, Singapore sourced three times the funding and more than double number of deals.
In the last 20 years, Hong Kong has experienced fluctuations in policies aimed at promoting innovation and technology. It is widely known and agreed by practitioners that our development in the field has lagged behind competitors like Singapore.
A CE for the future
Currently, the society begins to focus on the formation of the Chief Executive Election Committee and the Chief Executive Election coming up next year. I had been a member of the Election Committee in the Information and Communications Technology (ICT) sector from 2007 to 2016. In the upcoming term, I shall leave my post of the Committee Member to newcomers.
Although I shall not be participating in the Committee election, I sincerely remind our future Chief Executive to strengthen Hong Kong’s competitiveness by combining the leading edges of ICT and related industries as the core of the economy. The work has never been easy. However, if the Government can coordinate different opinions and ideas, inspire and galvanize the public forces, its effort in implementation will definitely be more effective.
As praised by the World Economic Forum, Hong Kong has talented people, good infrastructure and world respected judicial system. If our Chief Executive has the ability to create a harmonious environment, I believe the Pearl of the Orient can continue to shine!
- “The Global Competitiveness Report 2016–2017”, 28-09-2016, Klaus Schwab, World Economic Forum http://www3.weforum.org/docs/GCR2016-2017/05FullReport/TheGlobalCompetitivenessReport2016-2017_FINAL.pdf
- “Hong Kong’s economy remains subdued and the SAR faces growing competitive pressures”, 06-10-2016, CPA Australiahttps://www.cpaaustralia.com.au/‾/media/corporate/allfiles/document/media/media-release-hong-kongs-economy-remains-subdued.pdf?la=en
- 〈港明年競爭力半數商界看淡 澳洲CPA倡借鑑星洲推動FinTech〉, 07-10-2016, Hong Kong Economic Journal
- Grab home page https://www.grab.com/sg/
- “Grab Provides First Half 2016 Business Update”, 14-07-2016, Grabhttps://www.grab.com/sg/press/grab-provides-first-half-2016-business-update/
- “Uber rival Grab raises $750M led by SoftBank at a $3B valuation”, 19-09-2016, Jon Russell, TechCrunch https://techcrunch.com/2016/09/19/grab-raises-750-million/
- “GrabTaxi Raises $65 Million To Increase The Competition With Uber In Southeast Asia”, 20-10-2014, Jon Russell, TechCrunch https://techcrunch.com/2014/10/20/grabtaxi-raises-65-million-to-increase-the-competition-with-uber-in-southeast-asia/
- “Singapore ride-hailing firm Grab raises US$750m in Softbank-led financing round”, 20-09-2016, Zen Soo, South China Morning Post
- “Grab raises $750m in Softbank-led equity financing”, 20-09-2016, Jeevan Vasagar, Financial Times https://www.ft.com/content/7f4ba9f4-4824-3c97-b059-f2cd9afbc37d
- “Uber’s Mideast Rival Said to Seek Up to $500 Million New Funding”, 26-09-2016,Dinesh Nair & Arif Sharif, Bloomberg http://www.bloomberg.com/news/articles/2016-09-29/uber-s-mideast-rival-said-to-seek-up-to-500-million-new-funding
- “Asia sees record high $23.4b in startup funding in Q2”, 05-08-2016, Tech in Asia https://www.techinasia.com/talk/asia-sees-record-high-234b-startup-funding-q2
- “Hong Kong vs Singapore VC: Flawed comparisons”, 14-10-2015, Tim Burroughs, AVCJ http://www.avcj.com/author/45/tim-burroughs
[starbox desc=”Winnie Tang
With a PhD in Science and being an honorary professor of the University of Hong Kong (HKU), Dr. Winnie Tang JP belongs to the groups of locally-bred IT entrepreneurs of Hong Kong. She is Founder and Chairman of Steering Committee of the Smart City Consortium, and is the pioneer in bringing the Geographic Information System (GIS) technology to benefit the public and private sectors in Hong Kong. Over the years, she has been actively advocating the use of technology in various sectors including environmental conservation, education and healthcare for a better Hong Kong.