Scott ChengandDavid Ketchum

Opinion | Weakest link in Hong Kong’s tech ecosystem? Scale-up funding

With venture capital and IPO growth weak globally, start-ups should aggressively seek international commercialisation, leverage marketing strategies and connect with power players overseas

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The absence of a robust series of funding escalators – from Series A to C, leading to trade sales or IPOs – risks producing numerous start-ups with innovative ideas but lacking commercially viable products. Photo: Shutterstock

Scott ChengandDavid Ketchum

Published: 4:30pm, 24 Dec 2024

Hong Kong has made significant strides since the establishment of Cyberport and Hong Kong Science Park decades ago, which have since evolved to become vital incubators for innovative start-ups. Early tenants such as logistics group GogoX (formerly GoGoVan), AI pioneer company SenseTime and blockchain video-gaming firm Animoca Brands have become strong players in their fields.

The Global Innovation Index by the World Intellectual Property Organisation (WIPO) ranks Hong Kong fifth in Asia and 18th globally. The ambitious remaking of Hong Kong as the Silicon Valley of Asia remains a work in progress. While many success factors are present, elements of the information technology value chain still need to develop and interconnect.

Silicon Valley serves as a model for driving innovation value, characterised by several key factors: strong ties with world-class research universities, government support through contracts and subsidies, a critical mass of leading companies, access to growth capital, and opportunities for acquisitions and initial public offerings (IPOs). How does Hong Kong compare?

Local colleges such as the University of Hong Kong contribute talent, research and innovation to Cyberport while the Hong Kong University of Science and Technology helps to catalyst Science Park projects. The Chinese University of Hong Kong and other top institutions play similar roles, akin to Stanford University’s influence in the Bay Area.

The Hong Kong government, along with public-private partnerships, has effectively “incubated the incubators” to kick-start the infotech sector. Although Hong Kong does not provide the same level of government or military contracts to local companies as the United States does for Silicon Valley, initiatives like the Hong Kong-Shenzhen Innovation and Technology Park and the coming San Tin Technopole in the Northern Metropolis signal support.

The Greater Bay Area offers Hong Kong access to hardware manufacturing and infotech talent. Additionally, technology talent and scientists are recruited from abroad through initiatives like the Technology Talent Admission Scheme.

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