While there is a general consensus that Hong Kong
needs to diversify from its heavy reliance on financial
services and property, more discussion is needed on how to move forward.
Certainly, there is no lack of entrepreneurism here.
Hong
Kong has to look more closely at its long-term economic survival. The task is
not straightforward. The city cannot rely on policies handed down from Beijing;
they may not work in our free market economy. And, now the British are gone, it
is not politically correct to copy the UK model, either.
To
come up with our own answers, we need a good understanding of the economic
transformation of the OECD countries. Then, we need to devise a strategy, and
find support from the public and Legislative Council to make things happen.
The
Organisation for Economic Co-operation and Development acknowledges the link
between a knowledge-based economy and the creation of high-wage and
high-quality jobs. This knowledge-based development strategy, however, seems to
lie in the "I don't know that I know" portion of Hong Kong's
collective intelligence. Hong Kong doesn't seem to recognise its own potential
and has so far failed to find a strategy for economic diversification and the
creation of high-end jobs expected by the younger generation.
Hong
Kong has always been about free trade, a good legal system, and a strong belief
in the free market principle. We have thrived on new ways of thinking and doing
things. We have all the basic conditions needed to make things happen, yet we
don't recognise that we are already a developed economy, and that the
game-changing opportunity must be based on innovation, not suspicion of the
unknown, indecision and inactivity.
A
knowledge-based economy is not just about research and development, and the
pursuit of knowledge in universities. It is also about making money.
Policymakers
should note that South Korea has formally abandoned the "catch-up"
mentality and is thinking of itself as a global leader of development. To
achieve this, Seoul has decided it should not rely on thechaebols, the
large family-owned conglomerates, for further economic development. Instead, it
is trying to strengthen the innovative capacity of its small and medium-sized
enterprises.
Hong
Kong started as a trading port and later became Asia's financial centre. It is
probably more international than Korea and we should remember that generating
economic growth through knowledge- intensive businesses is what Silicon Valley
is about. The shining Asian example of this mode of development is Taiwan. This
strategy of trying to put innovative SMEs at the centre of the "new
economy" has been adopted by many OECD countries.
Hong
Kong's Economic Development Commission, established recently by the government,
will probably come up with a new policy to support SMEs. But a strategy of
picking and predicting winners and supporting certain industrial sectors at the
expense of others is not feasible. The key to success has to be
across-the-board support for knowledge-intensive SMEs, including those in the
service sector, given that they are the source of many innovative ideas and
development capacity for other sectors of the economy.
The
fundamental conditions to build a knowledge-based economy are already here. We
don't need a miracle to make things happen; some clear-headed thinking and
small policy adjustments will do the job.
Hong
Kong prides itself on being a rules-based society that provides a level playing
field. Investing more in education, in science and technology, an innovation
ecosystem, and support for young entrepreneurs are all part of an
intellectually sound and politically defensible economic development strategy.
We
would be wise not to try to duplicate what the mainland and the rest of the
world are already doing. Rather, we should focus on our niche - international
connections, the last 10 per cent of research and development,
commercialisation and the Closer Economic Partnership Arrangement (Cepa) with
mainland China. We can offer a platform for the mainland to "go out"
and international enterprises to "go in", provide the service
capacity for Chinese enterprises and focus on commercialisation. These are all
sound strategies.
This
month marks the 10th anniversary of the signing of Cepa, an appropriate moment
to consider an upgraded strategy. A renewed focus on innovation and technology
co-operation between the mainland, Hong Kong and Europe will benefit all. Hong
Kong needs to: develop and utilise the skills required to strengthen its SMEs'
capacity to innovate; realign and co-ordinate R&D spending; think
internationally; and, see itself as a leader not a follower in regional
development.
The
government must be prepared to lead, soliciting support from the business
community, the public and lawmakers, with a focus on implementation,
accountability and good governance. This will ensure economic development
brings benefits to the younger generation sooner rather than later.
