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Hong Kong's Startup Scene

Updated:2018-5-2 10:18:27    Source:www.tannet-group.comViews:492

Hong Kong’s startup ecosystem is relatively young, it has grown quickly in recent years. Many entrepreneurs are attracted by the city’s high rate of internet penetration, which has allowed for greater adoption of tech innovations. Additionally, the Hong Kong government has been aggressively promoting initiatives to expand entrepreneurship in the face of increased competition from southeast China. In addition,  Hong Kong’s proximity to Shenzhen, one of the key tech start-up hubs within mainland China, has added dynamic considerations to the Hong Kong startup environment, and this has multiple effects for multinationals and foreign investors.

The Evolution of Hong Kong’s Startup Scene
According to the 2016 survey released by InvestHK, the investment promotion arm of Hong Kong, the number of startups in the city rose from 1,558 in 2015 to 1,926 in 2016, an increase of 24 percent. The main business fields for the surveyed startups are described immediately below.

Additionally, the majority of Hong Kong startups, about 52 percent, focus on both business-to-business (B2B) and business-to-consumer (B2C) activities simultaneously. Their main market focus is Hong Kong – 87 percent listed the city as their major current market.

However, Asia and North America topped startups’ ambitions, with 56 percent listing the Chinese mainland, 49 percent listing Taiwan, 41 percent listing the Americas and Canada, followed by a close processions of Japan, Hong Kong, and ASEAN.

Government Initiatives
To galvanize the startup community, and attract attention, the government has released a series of initiatives focused on increasing available funding through venture capital funds, as well as funding for universities aimed at encouraging technology startups.

Last year in 2016, the government expanded their scope and depth through a HK$2 billion Innovation and Technology Venture Fund. The Fund seeks to invest in local innovation with private venture capital matches.

Prior to this in 2014, the government-established Innovation and Technology Commission (ITC) rolled out the ’Technology Startup Support Scheme for Universities’ (TSSSU), which provided six universities HK$4 million (US$515,000) each in annual funding to support tech startups.

During the 2017 Policy Address, the government laid out their plans to continue support into startups, totaling six individual items that address startup applicability.

Integration into the Pearl River Delta
Another major announcement during the 2017 Policy Address was the Hong Kong and Shenzhen deal to jointly develop the Lok Ma Chau Loop into the Hong Kong-Shenzhen Innovation and Technology Park, a controversial decision amongst both parties.

The Park settles a land ownership dispute between Hong Kong and Shenzhen, but also raises questions regarding the integration of the two cities, the two rules of law and ecological concerns.

Thus far, the relationship between the two cities has been more cooperative than competitive, with Hong Kong specializing in international access and talent, and Shenzhen specializing in manufacturing capabilities. (Source: China Briefing)

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