Why shadowing Singapore or China won’t help Hong Kong climb back up global innovation rankings

Victor Zheng and Roger Luk say it is the dynamic Anglo-American model that can lead Hong Kong to innovative excellence, but first there must be a change in attitude

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Solar panels used to power walkway lights are positioned along the Marina Bay overlooking the skyscrapers of Singapore in April last year. Singapore’s efficiency ratio on innovation is below the global average, and it is not a good example for Hong Kong to mirror. Photo: AFP

Published: 1:21pm, 22 Aug 2017Updated: 7:06pm, 22 Aug 2017

When the Innovation and Technology Bureau was set up in late 2015, aspirations were high and promises made. However, Hong Kong has fallen three places, to 16th, in this year’s Global Innovation Index. Why have all the government efforts in the past 20 years or so proved ineffective?

The Global Innovation Index 2017 report, covering 127 economies, offers much insight. The main index is comprised of the input and output sub-indexes. It has five areas of innovation “input”: institutions, human capital and research, infrastructure, market sophistication, and business sophistication. The two areas of “output” are knowledge and creativeness. The ratio of output to input reflects innovation efficiency.

Two changes have happened in the past four years: Ireland replaced Hong Kong in the top 10 in 2015, and Germany replaced Luxemburg in 2016. Singapore has hovered between sixth and seventh. Despite renewed government commitment, Hong Kong’s area ranking has tumbled from 10th in 2014 to 16th. Nevertheless, our efficiency index is still comparable to Singapore’s.

However, Singapore ranks high in the “inputs”, but low for “output”, where it is below mainland China. Thus, its efficiency ratio is below the global average, and it is not a good example for Hong Kong to mirror. Hong Kong lags behind particularly in human capital and research, as well as business sophistication. Mainland China is catching up in business sophistication but still lags behind in other areas.

Sammy Kam, technical director at Octopus Holdings, addresses the START FinTech conference 2017, as Gatecoin founder-CEO Aurelien Menant, HSBC’s digital experience chief Sean Seah and Peter Koo, partner of advisory in audit at Deloitte China, look on, at the Hong Kong Convention and Exhibition Centre on July 27. Photo: Jonathan Wong

Hong Kong must focus on innovation and science to maintain its edge

A further breakdown of the index shows that the mainland and Hong Kong both lag behind in tertiary education and research. Moreover, Hong Kong is weak in knowledge workers, innovation links and knowledge absorption. Here, Singapore is the leader and the mainland is catching up. Hong Kong’s problem is its poor performance in “output”, in particular its knowledge and technology area ranking.

The mainland Chinese model is efficient but restrictive. The Singapore model is comprehensive but inefficient

If Hong Kong wishes to advance its innovation efficiency, the development models of European and American economies may prove more rewarding. The statistics of Nobel laureates are enlightening. Since 1901, there have been 881 recipients of academic prizes, of whom 553 have come from US universities; 129 from the UK and 107 from German universities. Only three each have come from India and China.