Savantas Policy Institute as research partner has collaborated with the Center for Entrepreneurship (CfE) of the Chinese University of Hong Kong (CUHK), Hong Kong University, Hong Kong Baptist University, and the Shenzhen Academy of Social Sciences and published the Global Entrepreneurship Monitor (GEM) 2016 Hong Kong & Shenzhen Report. The last GEM report focused on Hong Kong and Shenzhen was published in 2009, when circumstances for entrepreneurs in both cities were vastly different.
GEM’s annual reports are widely recognized as the most authoritative international poll of entrepreneurship in the world. Its indicators are often cited along other prominent indexes, such as the World Bank’s Ease of Doing Business Index, the Political Stability Index, or the World Economic Forum’s Global Competitiveness Index. GEM results are used in academic research and by government and business leaders to devise effective policies for boosting creativity, knowledge transfer, and economic activity. This year, the study has been conducted in 66 economies worldwide.
The GEM Hong Kong and Shenzhen highlights the significant improvement since 2009 in the two cities in terms of the environment for entrepreneurship. Hong Kong and Shenzhen have their own respective areas of specialisation. Hong Kong entrepreneurs are more focused on developing new products, whereas entrepreneurs in Shenzhen focus on new technologies; Hong Kong startups are born and bred locally but aim at the international market, whereas Shenzhen-based startups are founded by people from all over China and tend to focus on the Mainland market. If the two cities can cooperate and collaborate, complementing each other, we are guaranteed to be on top of the global tide of entrepreneurship and innovation.
The foreword of the report is written by the chairperson of Savantas Policy Institute Mrs Regina Ip, as follow:
It has been widely acknowledged that entrepreneurship is an important driver of economic development. Entrepreneurial activities spur growth, create jobs and spark innovation. Being entrepreneurs is not just about running their own companies. In Schumpeter’s view, entrepreneurs are agents of innovation who bring new ideas to the market. The 2007 Economic Report of the President (of the United States) defines entrepreneurship as "developing new ways of doing business and making risky investments to implement them". It points out that entrepreneurship involves taking risk; but when companies compete through entrepreneurship and innovation, the economy as a whole benefits from the efficiency gains. Both large and small businesses can innovate. It is no wonder that China’s 13th Five Year Plan places strong emphasis on mass entrepreneurship and innovation as a main theme of our national economic development strategy.
Hong Kong has long prided itself on its entrepreneurial spirit. In the post war period, our entrepreneurs played a key role in Hong Kong’s industrialization, creating an economic miracle that placed Hong Kong on the pantheon of Four Asian Tigers. This spirit seems to have declined since the 1980s. The rapid growth of the property and financial sectors has crowded out many other riskier economic activities. Fortunately the tide has turned over the past few years. After the 2008 financial crisis, the city has seen a greater awareness of the importance of entrepreneurship and innovation. The government has stepped up its support. The ecosystem has also changed for the better. Private incubators are mushrooming. According to the latest Invest Hong Kong survey, the number of local co-work space, incubator and accelerator locations increased from 3 in 2010 to 48 in 2016. 5,618 workstations were available and 1,926 start-ups registered in these locations, both up by 24% from 2015.
Despite the encouraging signs, we should pay attention to quality in addition to quantity. We need to promote high-growth, high-impact entrepreneurship that effectively drives economic development. Among other factors, technology plays a crucial role in accelerating the growth and magnifying the impact of start-up ventures.
Our neighbouring city Shenzhen has transformed itself to a hotspot for technology-based entrepreneurial activities over the past decade. High R&D investment and a wide variety of policy support measures have laid fertile ground for high-tech entrepreneurship. Shenzhen is home to tech giants Huawei, ZTE and Tencent. Many more companies are making their start there. The contribution of entrepreneurial activities to Shenzhen’s economic growth is evident. In 2014, the GDP per capita of Nanshan District, Shenzhen’s tech hub, rose to 308,700 yuan, overtaking Hong Kong.
Hong Kong and Shenzhen can make further progress in spurring high-growth entrepreneurship by complementing each other. DJI is a case in point. This world’s leading consumer drone manufacturer, now headquartered in Shenzhen, was founded by a Mainland engineering graduate in Hong Kong University of Science and Technology. This success story demonstrates what can be achieved with Hong Kong’s world-class tertiary institutions and Shenzhen’s strong manufacturing base.
For years, Savantas Policy Institute has been one of the advocates for cooperation between the two cities in promoting innovation and entrepreneurship. The prospects for collaboration have received a boost with the announcement of the Hong Kong/Shenzhen Innovation and Technology Park in Lok Ma Chau Loop. The Global Entrepreneurship Monitor 2016: Hong Kong & Shenzhen Edition, jointly conducted by scholars and experts from both cities, is a timely effort to inform future collaboration. The study provides a multifaceted analysis of the entrepreneurial landscape in Hong Kong and Shenzhen, shedding light on potential areas of cooperation between the two cities to increase their competitiveness on the international arena.
As pointed out by this report, developments such as Internet-of-Things, Smart City and Fintech offer a lot of opportunities for collaboration. To improve the synergy between the two cities, we should step up efforts in promoting joint research and development and facilitating cultural and personnel exchange. I hope the useful pointers provided by this study can contribute to development of high-growth, high-impact entrepreneurship in both cities.
Chairperson of Savantas Policy Institute