The startup scene in Hong Kong is still young and fragile, but local governments have created a new masterplan in which the city could become the San Francisco to Shenzhen’s Silicon Valley in the ‘Bay Area’ of the Pearl River Delta.
Few people think of Hong Kong as a startup hub that can compete with the likes of San Francisco, New York, Stockholm or Berlin. And when we look at Asia, Singapore has quite an edge over its competitor as a startup nation.
The ‘problem’ with the former British colony is that it’s economy used to rely heavily on real estate and finance, which resulted in an aging population that never felt the urge to innovate (in sharp contrast with mainland Chinese), and with few young locals that started a tech company. ‘Why risk your career in one of the most expensive cities in the world when you can make loads of money as a banker’, is the general idea.
Policymakers acknowledged the problem years ago, and set up initiatives to diversify the economy such as Cyberport and Hong Kong Science and Technology Park (basically two big incubators for young tech companies and research institutions). But it is only recently that the Hong Kong startup scene really is knuckling down to business.
“According to Compass, we’re the fifth fastest growing tech hub in the world”, explains Karena Belin from WHub, the local Startups.be-equivalent. “In two years’ time, investments in our ecosystem went up from 30 million to 300 million dollar. Hong Kong is home to more than 2.500 startups now.”
The city is heating up its startup scene not only because it has to diversify its economy (while revenue streams in tourism, banking and logistics are on a downward slope), Hong Kong also feels Shenzhen breathing down its neck, the megalopolis of about 20 million people that’s just across the border with China.
Shenzhen is pivoting at the speed of light from China’s manufacturing hub into a center for research, development and production of advanced technology. More than 8.000 tech companies - most of which are startups - have set up shop in the city’s Nanshan district. Entrepreneurs from all over the world flock to the area.
“Especially in connected hardware, Shenzhen is the place to be”, argues co-founder Bay McLaughlin of hardware accelerator Brinc. “It won’t be long before almost everything we use in everyday life will be connected, and most of those things will be developed in Shenzhen, whether you like it or not. The whole world will get to know the power of China.”
In its efforts to keep up with its imposing neighbor, the Hong Kong government created a new masterplan that must bring Shenzhen and Hong Kong closer together. The goal is to create a brand-new tech park on the border area between China and Hong Kong, that’s still a swamp right now.
Lok Ma Chau Loop
The new 'high-tech border city' (Lok Ma Chau Loop Innovation and Technology Park) is being pitched as an incubator for future Asian tech giants. The idea is that tech companies would be even closer to Shenzhen’s cheap manufacturing and innovation, while retaining Hong Kong’s rule of law and internet freedom, with eased border crossings between the two.
The deal between the two cities - Shenzhen also supports the project - reflects a wider plan by China to bind together Hong Kong with neighboring municipalities in the Guangdong province (an urbanized area of more than 60 million people). For many, the ultimate dream is for Hong Kong to become the San Francisco to Shenzhen’s Silicon Valley in the new ‘Bay Area’ of the Pearl River Delta.
It speaks for itself that, when both metropolises join forces on a deeper level, they would have a very strong case against competitors such as Silicon Valley/San Francisco, European tech hotspots and Singapore (South East Asia). Although it would certainly be Hong Kong that would benefit most, as Shenzhen is strong enough to continue its quest for world tech dominance on its own.
Do you want to experience China for yourself? We’re organizing a week-long GoGlobal Mission to Hong Kong and Shenzhen from 8 to 13 July 2018 (during Rise Conference, Asia’s biggest and foremost tech conference).
Which startups should apply?
- Companies that are working in design, architecture, product development and prototyping (all areas where the Chinese still have some serious catching up to do, certainly when they want to conquer international markets).
- Startups in fintech, as Hong Kong is one of the world’s most important finance centers, where you can find all the big players on a few square kilometers.
- IoT-specialists, certainly when they have a platform to build on. Shenzhen is the IoT-capital of the world and the universe.
- Healthcare-specialists, as healthy aging is becoming a big topic in HK and in China.
- Businesses in logistics & transport, with Hong Kong and Shenzhen both having one of the biggest ports in the world.
- HR-tech is booming in Hong Kong, as is ED-tech, food-tech and fashion-tech.
- Startups in cleantech, aerospace and next generation it, all of which are important topics in China.
- Startups that want to discover the fast-growing Shenzhen and Hong Kong tech ecosystems.
- Startups that want to experience Rise Conference.