Why the Hong Kong government can’t buy its way to an innovative tech scene
Letty Kwan and Chi-Yue Chiu say true innovation comes from not just financial support, but also strong institutions that allow an open exchange of ideas
The Hong Kong public should be familiar with the rhetoric, if not the efforts, of successive administrations to drive innovation, often seen as the holy grail of economic development.
The latest push came in the form of a HK$17 billion package in this year’s budget to finance research projects, encourage small firms to invest in research and development, support local start-ups and assist university teams to commercialise research results. Meanwhile, a report by Our Hong Kong Foundation suggested that we should take a holistic approach by increasing investment in research while ensuring the regulatory environment creates space for innovation.
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These proposals are laudable. But evidence shows that the mere injection of taxpayers’ hard-earned cash into the technology ecosystem is not enough to engender innovation that drives lasting economic growth.
Innovation output can be measured by the quantity of new ideas, products and services, and its benefits can in turn be measured by the impact of these on the local economy. But the most valuable output is achieved when those services and products enjoy transformational global influence. Facebook, Google Maps and the iPhone are cases in point.
R&D investment can improve innovation by attracting talent. However, the supply and quality of global talent (human capital) are not in themselves enough. A key factor is institutional support – a stable sociopolitical environment that safeguards press freedom and the rule of law.
