Innovation and start-ups drive youth mobility
10 November 2019
For years, Hong Kong has been ranked as one of the freest economies in the world in tandem with its status as a top international business and financial centre. This is attributable to the persevering and enterprising people of Hong Kong, who, for generations, have been striving for innovation and excellence. It is also an accomplishment built upon our advantages of having a favourable business environment, an independent judicial system, unrestricted flow of information and capital, a low and simple tax regime, as well as an open, inclusive and diversified society.
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These attributes have made Hong Kong a preferred destination for multi-nationals to set up offices and regional headquarters. The number of business operations with parent companies overseas and on Mainland China and the number of start-ups in Hong Kong have been on the rise. In 2019, the number of overseas and Mainland companies in Hong Kong reached 9 040, representing an increase of 9.9% when compared to 8 225 in 2017. Among them, 1 541 were operating as regional headquarters. At the same time, the number of people engaged by these companies also reached a record high of 493 000, up 11.3% when compared to 443 000 in 2017. In terms of source country/territory, Mainland China ranked first with 1 799 companies, followed by Japan (1 413) and the United States (1 344). These companies have not only brought in capital, but also created jobs in Hong Kong and strengthened our competitiveness.
Hong Kong is also an ideal base for start-ups. Start-up founders can make their entrepreneurial dreams come true with vigorous support from the Government and various sectors of the society. The local start-up scene has developed rapidly in recent years. The number of start-ups in Hong Kong reached 3 184 in 2019, up 42.8% when compared to 2 229 in 2017. These companies engaged over 12 400 persons, which nearly doubled (up 97.4 %) the number in 2017 (6 300 persons). The start-up business community is internationalised, with 34% of start-up founders coming from various parts of the world. Topping the list is the United States (15.4%), followed by Mainland China (14.0%) and the United Kingdom (12.5%). The primary businesses of these start-ups include financial technology, e-commerce, supply chain management, logistics technology and information.
A lot of local young people aspire to start their own business to unleash their potential but, being greenhorns in the business world, they lack sufficient capital and experience to go it alone without support.
In view of the situation, the Government has made concerted efforts with various sectors of the community in recent years to provide strong support for youth innovation and entrepreneurship. A number of programmes have been implemented with initial achievements.
First of all, the Youth Development Fund (YDF) administered by the Youth Development Commission (YDC) under my chairmanship has approved matching funds for nine non-governmental organisations (NGOs) in total since its establishment in 2016, through which about 100 youth teams involving around 190 youth entrepreneurs have been offered support to start their own business. It is pleasing to know that some of these youth entrepreneurship projects, spanning industries such as information technology, internet and professional services, have tapped into the markets of other cities in the Guangdong-Hong Kong-Macao Greater Bay Area. It is evident that the YDF has helped realise the ideal of entrepreneurship for many young people.
In March 2019, the YDC rolled out two new funding schemes to provide start-up assistance and incubation services that befit the needs of interested young enterpreneurs. The two schemes met with a warm response with applications received from over 40 local NGOs.
To achieve the objective of poverty alleviation and prevention, the Government has been actively funding and conducting capacity building programmes for young people through the Social Innovation and Entrepreneurship Development Fund (SIE Fund). So far, over 2 700 potential social entrepreneurs have been nurtured. The SIE Fund also provides funding for social innovation programmes. Over half of the 160 innovative ventures currently funded by the SIE Fund, involving about $26 million in total, were proposed by young people.
Besides, Hong Kong Science Park and Cyberport have rendered holistic support for start-ups through their incubation programmes and attracted the participation of about 500 start-ups. The Innovation and Technology Fund also provides funding to local universities through the Technology Start-up Support Scheme for Universities (TSSSU) to support their teams in starting technology businesses and assist them in commercialising their research and development results. Over the past three years, 134 start-ups have received a total funding of $72 million under TSSSU.
To support youth start-ups and youth cultural and arts development, the Government has launched the Space Sharing Scheme for Youth (SSSY) for owners of revitalised industrial buildings and commercial buildings to contribute floor areas for the operation of co-working space or studios through tripartite collaboration among the business sector, NGOs and the Government.
SSSY has received positive response from various sectors of society. Up to now, there are 12 participating properties providing a total area of over 110 000 square feet, benefiting over 1 300 young people. I have visited some of these properties and stood witness to the success of SSSY. I am so glad to see the young people put their ideas into practice, creating their own business step by step under SSSY.
The Hong Kong economy has already slipped into a technical recession under the influence of the social incidents in recent months. The value of total retail sales in September 2019, provisionally estimated at $29.9 billion, decreased by 18.3% over the same month in 2018. The value of total receipts of the restaurants sector in the third quarter of 2019, provisionally estimated at $26.4 billion, fell by 11.7% over a year earlier. It was the largest year-on-year decline since the outbreak of SARS in the second quarter of 2003, reflecting the severe blow of the social incidents to the retail, food and beverage businesses. Consumer sentiment was affected by the subdued economic outlook.
Besides, the total employment figure for the period between July and September, reduced by about 8 200 to 3 855 400, was slightly lower than the level a year ago. It is expected that the labour market will be faced with great pressure due to ongoing street violence and grim economic prospects. The Government will closely monitor the situation.
The fact that the President met the Chief Executive in Shanghai last week demonstrates the Central Government’s unswerving support for the SAR Government, giving strong impetus to Hong Kong. The most pressing task for Hong Kong now is to end violence and, with the positive energy of all law-abiding and peace-loving citizens, work with resolve to restore order and safeguard the territory’s prosperity and stability.
The SAR Government will make every effort to mend the rift and communicate widely with all strata of society to tackle the deep-rooted social conflicts in earnest. We will also continue to reinforce Hong Kong’s traditional strengths and invest in the future, nurture talent and promote upward social mobility, as well as upgrade our manpower resources to strengthen our soft power and long-term competitive edges, with a view to ensuring the long-term development of Hong Kong.
