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Ningrong Liu

Hong Kong is drafting its first‑ever five‑year plan, a historic blueprint to chart long‑term development. Much has been said about reforms and paradigm shifts, but far less attention has been paid to the true architects of this journey: Hong Kong’s elites. Their choices will determine whether the city reinvents itself as an innovation hub or slides into stagnation.
For decades, Hong Kong’s movers and shakers maximised returns from finance, trade and real estate. But as the global economy pivots towards technology and innovation, these engines face mounting headwinds.
To navigate this transition, Hong Kong requires a profound “power shift”, a systemic re‑engineering of mindsets, incentives and risk appetites across business, bureaucracy and academia.
Hong Kong’s history shows that elite behaviour determines the city’s trajectory. At each juncture, successive migration waves reshaped its elite class, catalysing economic rebirth.
The first defining wave arrived after World War II, led by Shanghainese industrialists fleeing civil war. They did not merely relocate; they transplanted capital, technical expertise and an entrepreneurial spirit that fuelled Hong Kong’s industrialisation. Their willingness to embrace high-risk ventures laid the foundations of a global manufacturing hub.
Another wave, spanning the 1960s through the 1970s, brought migrants from Guangdong. While they did not arrive as elites, their industrious labour powered Hong Kong’s export miracle. Crucially, this era showed that elite-led value creation requires an ecosystem capable of integrating and mobilising new social groups.

Today’s wave includes mainland professionals, wealthy families and global talent. They bring essential technological literacy and venture capital.
Each wave underscores Hong Kong’s phoenix-like resilience. The city’s edge has never been static infrastructure, but the capacity to reinvent its economic drivers. As Hong Kong now navigates a hi-tech paradigm shift, its elites must embrace the creative destruction that such a shift entails, not cling to dwindling legacy rents.
Past waves thrived because Hong Kong rewarded enterprise. Yet today, systemic incentives breed complacency. The Northern Metropolis could be a hinge point. More than a land plan, the project is a litmus test of whether elites can pivot from rent‑seeking to risk‑taking.
Conceived as Hong Kong’s future silicon engine, the Northern Metropolis risks being approached through an outdated lens. Traditional business elites built fortunes in low‑risk, asset‑heavy sectors like real estate and utilities. Because hi‑tech research and development requires venture capital and long incubation periods, hesitation is natural. Without structural incentive shifts, the project will fail to become an ecosystem for technology.




Singapore offers a sharp contrast. It is ranked at the top of the Elite Quality Index (EQx), a political economy index that evaluates 151 countries on the extent to which their elites create sustainable societal value. Its elites – guided by a state that co‑invests and shares risks – have embraced advanced manufacturing, deep tech and biomedical innovation. Hong Kong must learn from this.
According to Professor Tomas Casas-Klett from the University of St Gallen, co-creator of EQx, a society’s vitality rests not on wealth but on elite quality. High‑quality elites expand the pie through innovation and risk‑taking; low‑quality elites defend rents and legacy monopolies.
Hong Kong’s statutory bodies and civil service must evolve. In a traditional bureaucracy, the personal risk‑reward asymmetry is skewed: pioneering an unproven tech policy yields little upside, while any public failure brings intense scrutiny. A true innovation hub requires public institutions to pivot from being mere regulators to becoming strategic risk partners.
Similar misalignment exists within our tertiary institutions. Hong Kong boasts world‑class universities and brilliant minds. However, promotion systems largely reward journal publication and citation counts, while applied research, patents and policy‑relevant work are undervalued. A culture of institutional conservatism discourages entrepreneurial leaps.


Hong Kong must realign incentives. First, reframe the business proposition. The government should design land allocation and development policies in the Northern Metropolis that tie land access directly to key performance indicators (KPIs) on tech incubation, R&D spending and global talent recruitment. By making value creation more profitable than simple land banking, the private sector will channel more capital towards technological innovation.
Second, re‑engineer public-sector KPIs. Public institutions must cultivate a “calculated risk” culture by introducing regulatory sandboxes where bureaucrats are insulated from political fallout when they test innovative frameworks. Flexible pathways for tech veterans to enter mid‑senior levels of government could inject necessary market dynamism into policymaking.
Third, reshape university culture. The University Grants Committee should help advance research on policy, industry, technology transfers, patents and partnerships. Universities need visionary leaders capable of shaping culture and steering through entrenched habits. They must have the capacity to translate breakthroughs into ventures and lead with courage in environments resistant to change.
With the right incentives steering Hong Kong’s financial capital, institutional power and intellectual creativity, the city’s elites can be persuaded to abandon rent preservation and embrace calculated risk to drive innovation. This is the “power shift” the city must execute to secure prosperity.


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To become the best it can be, the city should align capital, governance and academia along new priorities anchored in innovation


To become the best it can be, the city should align capital, governance and academia along new priorities anchored in innovation.


Hong Kong economy

Banking & finance

Technology

Singapore

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Expresses the views, ideas and conclusions of the author. (Eg. Enough of Crazy Rich Asians, think of crazy poor Hongkongers.)


Why Hong Kong’s elites must become risk-takers again

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}To become the best it can be, the city should align capital, governance and academia along new priorities anchored in innovation

To become the best it can be, the city should align capital, governance and academia along new priorities anchored in innovation