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Can HK become an innovation Hub ?

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  1. #1

    Can HK become an innovation Hub ?

    Can HK become an innovation Hub ?

    BABA / Alibaba Group ... update



    ( the HKVCF - see below - was planned when BABA was higher, I suppose)

    In the Mr Shangkong column in today's SCMP:
    Georoge Chen asks:
    Can funding drive innovation in HK?

    Government investment may not be enough to encourage young technology entrepreneurs

    "Let's talk start-ups, the hottest thing being discussed this year from Silicon Valley to Beijing"
    + The world has been inspired by the rise... and revival of internet businesses, following the bursting of the dotcom bubble
    + Cities with a global presence (like HK) want to help lead the way on the internet, and start-up front
    + So far, HK has lagged, and China has done better... Hangzhou is now the home to Alibaba; while Shenzhen hosts Ten Cent
    + In the US more than 500,000 new businesses are launched evry month, more than 11 million Americans have started something parttime, or quit their fulltime jobs to join "the enxt big thing". The passion for start-ups makes the US more dynamic
    + HK's CE, C.Y, Leung wants to spend HK$5 billion boosting local innovation. But most successful start-ups are funded privately, not by governments

    Why are Hongkongers reluctant to join start-ups? Why has HK failed to standout on technological innovation? How can the city do better?


    He invites emails to: [email protected]
    === ===

    (...and THIS is coming up):

    Hong Kong Venture Capital Forum
    - will happen March 13, 2015 (Froday)
    > see: HKVCF | Hong Kong Venture Capital Forum

    "The HK Venture Capital and Private Equity Association (HKVCA) is proud o present its second annual Forum on Friday, March 13, 2015. The theme of the Forum this year is: "Future Technologies and Hong Kong", a reflection of recent local innovations in financial and medical technologies sectors, and the rapidly growing interest in the "Internet of Things"
    Last edited by OffThePeak; 09-02-2015 at 03:46 PM.

  2. #2

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    I think it can be. There has been an increase in support and facilities in recent years, from co-working spaces to incubators. There's still a way to go, but I see things only getting better.


  3. #3

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    Its also a question of mindset and local culture. Innovation often requires entrepreneurs. While we do have examples of unsung heroes in entrepreneurship here in HK, there could have been a lot more successful entrepreneurs if the environment here is more conducive and encouraging of risk-taking and more forgiving toward failures (an unavoidable byproduct of the drive for innovation).

    And that requires wholesale change in mentality for HK, not just education, but also the culture as a whole.

    Nowadays local culture is too risk aversed, too conservative and unwilling to experiment. The government definitely has a role in trying to change this. Too bad it has set bad examples in the media industry by shielding failing but well-connected ATV and kicking the ambitious upstart HK TV to the curb. So first thing first, the government itself must stop blocking innovation.

    Ultimately HK society as a whole need to reassess the values it want in order to push for innovation.

    Last edited by Cho-man; 09-02-2015 at 04:29 PM.
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  4. #4

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    Also you need changes in Company Law and Bankruptcy law.
    Today no Bank will give unsecured loan to a business. If the business fail, the owner is forced to file personal bankruptcy. This prevents future ventures.

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  5. #5

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    Quote Originally Posted by Oldtimer:
    Also you need changes in Company Law and Bankruptcy law.
    Today no Bank will give unsecured loan to a business. If the business fail, the owner is forced to file personal bankruptcy. This prevents future ventures.
    You raised a good point. I think there is a huge room for improvement when it comes to creating more start-up capital. Venture capital and angel investors has a long way to go in HK.

  6. #6

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    There has been an increase in support and facilities in recent years, from co-working spaces to incubators.
    These are real estate plays, not innovation plays.

    Venture capital and angel investors has a long way to go in HK.
    Again, how much of the investment goes into real estate and not into innovation - i.e. rent.

    If the government wanted to get into the innovation game here's what they need to do:

    1) Provide modern space at minimum possible rent - $10/sq ft per month for example. Structure the deal .. less space, lower tier pricing, more space and the longer you're there the pricing goes up gradually... none of that 100% increase shit that the private sector thinks is "market rates".

    2) Provide administrative support - create a team of accountants, HR and support team which will serve these tenants. "CFO / team" in a box type thing...

    3) Involve banks to provide easy banking facilities for credit card processing and other financial support based on the innovation teams using the certified admin team...

    List could go on... needs some more thought...
    Last edited by shri; 09-02-2015 at 04:41 PM.
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    Quote Originally Posted by shri:
    These are real estate plays, not innovation plays.



    Again, how much of the investment goes into real estate and not into innovation - i.e. rent.

    If the government wanted to get into the innovation game here's what they need to do:

    1) Provide modern space at minimum possible rent - $10/sq ft per month for example. Structure the deal .. less space, lower tier pricing, more space and the longer you're there the pricing goes up gradually... none of that 100% increase shit that the private sector thinks is "market rates".

    2) Provide administrative support - create a team of accountants, HR and support team which will serve these tenants. "CFO / team" in a box type thing...

    3) Involve banks to provide easy banking facilities for credit card processing and other financial support based on the innovation teams using the certified admin team...

    List could go on... needs some more thought...
    How much? The cynical response would be that I suspect a lot of any potential fund will actually be diverted, misused or misappropiated into existing venture to be used by the pre-existing real estate developers. In other words, a slush fund by the goverment to reward its business buddies.

    After all, we have a precedence for this. It didn't involve an investment fund but land development, but the same principles apply in both case, misuse of resource intended for start-ups. I am referring to the development of Cyberport, supposedly an area to nuture IT start-ups, was awarded by the government to Pacific Century (controlled by Richard Li, one of Li Ka Shing's son) without an open tender. Instead of being a real hotbed for tech start-ups as originally planned, a big chunk of the land was used for, guess what, good old luxury estates.

    So if we are to avoid a repeat of the Cyberport fiasco, some major oversight of the fund will be required, namely to ensure the money goes to real start-ups creating real value.

    If I could end on a more optimistic note, hopefully the government and everyone else have learnt a lesson from Cyberport and the fund will be used more successfully this time.

  8. #8

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    Cyberport was a joke .... we were the only tenant on our floor at one point (70-80% vacancy) and they wanted to increase our rent because of guess what.... "Market rates".

    Missed opportunity in Wong Chuk Hang. They let so many buildings convert from industrial to commerial by paying a small fee. Would have been interesting if instead of taking money from the developers they'd extracted rent control options for SMEs.

    I am a strong believer that early innovation does not need money, it needs support. Provide the idea guy holistic support - IT, admin, HR, design, logistics, management etc... don't just throw money at the guys as large chunks will probably be wasted on support.

    Create training programs ... go beyond how to make a web page type shit...

    Lots of theoretical ways the government can stimulate innovation and employment without sinking tons of money into it.

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  9. #9

    I agree completely with the comments made here.
    (And I will send an email to George, suggesting he look at this thread.)

    Meantime, my two cents on this topic would be:
    + The "incubator spaces" probably WERE property plays, but there's nothing wring with that - since they did provide some useful spaces for your entrepreneurs to meet and set up new businesses. And they also provided a platform for people who had money to meet those who wanted it. I visited HK-Cocoon a few times in its early days, and I was pretty positive on what they were doing. I even offered to volunteer as a mentor. I have highly relevant experience, but was rejected. So I came to see it as a sort of friends-of-friends thing. Not so much open to new comers, or people with overseas experiences. That's a pity maybe.

    + For a while, I considered setting up my own space. I found a possible place to Buy and rent out for young businesses. But I was too slow, and someone else wound up buying it. In fact, this happened twice. But the operations that went into the spaces were not for start-ups, One of my friends got the idea from me. He DID buy a space, and rented to start-ups. His space was in Kwai Hing, and he has done really well with it, as an investment.

    + A key thing for HK start-ups will be building on success. Those who launch businesses and do well, can be a source of capital for new businesses coming after them. The key thing is more than capital, it is having experienced people who can act as mentors for up-and-coming new businesses.

    + In start-ups, people learn as much from failures as successes, and sometimes more. So the culture has to be forgiving of failure - and HK is not very good at that IMHO

    Last edited by OffThePeak; 09-02-2015 at 06:33 PM.

  10. #10

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    Quote Originally Posted by shri:

    I am a strong believer that early innovation does not need money, it needs support. Provide the idea guy holistic support - IT, admin, HR, design, logistics, management etc... don't just throw money at the guys as large chunks will probably be wasted on support.

    Create training programs ... go beyond how to make a web page type shit...

    Lots of theoretical ways the government can stimulate innovation and employment without sinking tons of money into it.
    Not disagreeing with you that start-ups need those things, but those "support" do cost money, so money is what is needed. But as always, how the money will be distributed and monitored ​will be the key.
    Last edited by Cho-man; 09-02-2015 at 06:42 PM.

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