Hong Kong must open the door to innovation

 In Economic Development & Economy, Poverty, Social Assistance, Welfare & Labour
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The government announced Hong Kong’s poverty line last week and found that 1.02 million people, or 15.2 per cent of us, are poor. The official strategy to alleviate poverty is to find ways to grow our economy, provide employment opportunities for people, particularly the young, that create upward mobility, while ensuring support measures are pro-children and pro-employment and targeting groups such as those with disabilities, ethnic minorities and single parents.

 

The question that must be asked now is, as well as income redistribution, can there also be a redistribution of opportunity to our youth by bringing back a level playing field? Can this be done through knowledge-based economic development, where the key drivers are innovation, creativity and entrepreneurship?

 

In a free-market economy such as Hong Kong, the government should not micromanage the economy but should instead provide a vision for high-quality economic development and facilitate it.

 

Silicon Valley in California is widely recognised as the world’s most successful knowledge-based economy. Hong Kong also received a very high rating in the 2013 Global Innovation Index. It should seize this opportunity by using its special advantages under “one country, two systems”, not only to help ourselves, but also to assist China, Europe and the members of the Association of Southeast Asian Nations in building their economies.

 

The money missing from the pockets of our youth could be provided by venture capitalists.

 

To take advantage, the community, in particular our youth, will require government help. Hong Kong is a high-cost developed economy that needs to be “innovation driven” rather than “efficiency driven”. The central government cannot provide the key for Hong Kong’s social and economic development as mainland solutions may not work in our free environment.

 

Hong Kong has a narrow industrial base and its only natural resource is its human capital. This has been the case since the early 1970s when Hong Kong began developing into the modern, mature economy it is today.

 

Hong Kong needs to recognise that innovation – not sticking with the status quo – is how we will progress. Social development that focuses on the redistribution of wealth from the rich to the poor cannot be the only way to eliminate poverty.

 

There is abundant financial capital in Hong Kong; the money missing from the pockets of our youth could be provided by venture capitalists who are more than willing to support other people’s ideas and rely on their entrepreneurial skills to make money for themselves.

 

There is a strong mismatch between Hong Kong’s capacity for innovation and its innovation ranking in the world. Its low level of innovation output could be linked to a lack of understanding of the power of knowledge and intangible capital to create wealth.

 

For example, Hong Kong is ideally placed to commercialise scientific output from mainland China, Europe and around the world – this is an innovation strategy that doesn’t need deep pockets and heavy investment in research and development, and could be acceptable to the financial secretary.

 

Political leadership is needed to make things happen. Support from the business community, lawmakers and the general public is essential to build a sustainable social and economic development structure.

 

The chief executive needs to put forward solid policy measures for innovation and technology in his next policy address to move Hong Kong to a knowledge-based economy in the next 10 to 20 years.

 

 

Alan Lung Ka Lun (龍家麟)

Chairman, Hong Kong Democratic Foundation (香港民主促進會主席)

 

 

This article with the subtitle “Alan Lung says helping youth fulfill their potential can alleviate povertywas published in Insight & Opinion of South China Morning Post on 3 October 2013.

 

 

 

 

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