Hong Kong should turn its creativity into a new engine of growth

Hong Kong's unseating as the most competitive Chinese city and missed opportunities in the technology sector, notably the failure to support the headquarters of the world's biggest civilian-drone maker DJI, have led to widespread reflection over the city's future position as a place for innovation and entrepreneurship. Hong Kong must not only compete with other Chinese cities, but in a global race for technology start-ups.

Technology start-ups can become an engine of economic growth and job creation. Silicon Valley, for one, is acknowledged for its contribution to the US economy. In Hong Kong, start-ups account for well under 1 per cent of the city's gross domestic product. Employment estimates range from several thousand at registered start-ups to 11,000 at the Science Park, out of a workforce of four million. Start-up venture funding remains miniscule relative to that of other Asian cities.

Hong Kong provides rich soil for idea generation, with its diverse population, high-speed technology infrastructure and reliable intellectual property regime.

However, for the city to become a world-class start-up hub, it must overcome two big obstacles - market size limitations and weak support from established industry.

In order to generate jobs and have an economic impact, Hong Kong start-ups must compete in global, regional and the mainland Chinese markets. To do so, they must make their businesses work despite differences in culture, distribution networks and customer behaviour. In China, successful start-ups must adopt "internet thinking", referring to the cutthroat, winner-takes-all, and execution-driven culture of the Chinese start-up world.

Only those who can rethink market solutions and ensure customer adoption quickly enough can survive. It is essential for Hong Kong entrepreneurs to find strategic ways to work with mainland Chinese counterparts, who have complementary strengths such as prototype manufacturing and first-hand market knowledge.