The Findings of the Global Entrepreneurship Monitor (GEM) Hong Kong and Shenzhen Report on Hong Kong Start-up Businesses

Excerpt from the GEM report

The Chinese University of Hong Kong (CUHK) Business School’s Center for Entrepreneurship (CfE) and Hong Kong Baptist University (HKBU)’s School of Business, published the “Global Entrepreneurship Monitor (GEM) Hong Kong and Shenzhen Report 2016–17” in early February. The GEM Hong Kong and Shenzhen Report 2016–17 shows that the start-up rates recorded a staggering increase in Hong Kong and Shenzhen from 2009 to 2016.

Hong Kong has always lacked long-term technological development policies, and this coupled with Hong Kong’s special geographical advantage and unique regional role has meant that previously local enterprises have only needed to concern themselves about the dynamics of the local market. They have been slow to recognize and react to the changes in both domestic and international markets due to the development of the Internet and e-commerce. This has contributed to the lack of competitiveness and the trend is going from bad to worse.

GEM reported several points worthy of focus regarding Hong Kong start-ups:

2. The research team also observed a major shift in attitudes and entrepreneurial intentions. In particular, 56.8 percent of the adult population perceives start-up opportunities in Hong Kong. Comparing to 2009, the population with entrepreneurial intentions in Hong Kong grew from 7.3 percent to 19.7 percent in 2016, representing an impressive increase of +170 percent. This means that some of the previously successful businesses will face challenges from new competitors.

3. In terms of financial support, the role of the family in financing new ventures is still significant in Shenzhen, but not so much in Hong Kong. Banks are also more supportive of startups in Shenzhen than in Hong Kong and so are venture capitalists, which could be explained by a higher prevalence of start-ups with profound market impact. Moreover, although crowdfunding is more prevalent as the source of capital for early-stage businesses in Shenzhen, it is yet to be adopted in Hong Kong due to some outdated laws and conservative regulatory concerns.

4. The research team interviewed 39 Hong Kong and 37 Shenzhen experts in the field of entrepreneurship about their opinions on how the cooperation between Hong Kong and Shenzhen that would increase the cities’ international competitiveness. The most frequent recommendation was to leverage the natural industry compatibilities between Hong Kong and Shenzhen. Other recommendations include:

• Joint development of industries such as Internet-of-Things, Smart City, Health Tech, Edu Tech, Fintech or E-commerce

• Joint R&D initiatives aiming at cross-border innovation, sharing of talents and intensification of knowledge exchange

• Introduction of joint or cross-border education to develop a shared cultural understanding of each other through opening more world-class academic institutions catering to students from both sides of the border

• Coordinating government policies for entrepreneurship between the two economies, e.g. joint visas for entrepreneurs that would facilitate cross-border operations of many start-ups

Finally, the report pointed out that if Shenzhen and Hong Kong can co-operate closely, the area is not only a very suitable place for the development of start-up companies, but is potentially the world’s strongest! Unfortunately, I believe that at present, Hong Kong and the Mainland have two different ideologies, which are tearing these two strategic places apart! When and how will all these hurdles be cleared? I hope the Lok Ma Chau Loop development plan, which had been put on hold for over ten years, can be implemented as soon as possible, in order to stimulate the Shenzhen-Hong Kong partnership and to open a passage through the barriers that separate Shenzhen and Hong Kong. This will be a big step forward for Hong Kong’s to reclaim her long losing title of the world’s most competitive city again!

以「還俗IT人」自居。香港金融科技革命「吹哨人」。主要工作除了擔任金融科技初創企業顧問外,也是香港城市大學、香港理工大學、香港大學、嶺南大學等知名商學院之特約教授及客席講師,積極透過教育推動本地及大灣區金融科技及智慧城市發展。 放下幾十年編寫電腦程式的鍵盤後近年重新以此寫作。以「但憑愚公志,復我獅山茂」為工作目標。

以「還俗IT人」自居。香港金融科技革命「吹哨人」。主要工作除了擔任金融科技初創企業顧問外,也是香港城市大學、香港理工大學、香港大學、嶺南大學等知名商學院之特約教授及客席講師,積極透過教育推動本地及大灣區金融科技及智慧城市發展。 放下幾十年編寫電腦程式的鍵盤後近年重新以此寫作。以「但憑愚公志,復我獅山茂」為工作目標。