Shaping Hong Kong’s modern identity: the power of innovation & technology

0:11Hello and welcome to the Entrepreneurs on Monocle Radio, the show all about inspiring people, innovative companies and fresh ideas in global business. On today's programme, we're heading to Hong Kong for a very special episode of the show recorded at the Upper House in the city. We'll hear from two leading figures from Hong Kong Science and Technology Parks Corporation, the organisation's CEO and one of its key strategic advisors to explore how this multifaceted incubator of innovation is a catalyst for diversification of the city's economy. This is The Entrepreneurs with me, Tom Edwards.

0:57You're listening to The Entrepreneurs on Monocle Radio. In a city known for vibrancy, HKSTP is turning that energy into innovation. This spirit was on display at the inaugural INT Powerhouse Breakfast Club, a lively event co-hosted by HKSTP and Monocle Radio. As the organisation steering Hong Kong's INT ambitions, HKSTP has cultivated a dynamic community of more than 2 ,300 ventures, 13 unicorns and a vibrant ecosystem supporting at least 24 ,000 innovators, helping position the city as a global innovation powerhouse. According to Dr Sonny Chai, the chairman of the corporation, HKSTP provides all the infrastructure and training and then lets all these ventures fly.

1:43To build on this momentum, HKSTP launched its INT Powerhouse initiative to showcase Hong Kong's soft power and foster thought leadership. As part of the initiative, I joined the Breakfast Club event alongside an all-star cast of top industry leaders to discuss the city's progress and enjoy some lively exchanges about the path ahead. So we pick up with our show featuring insights from the panel and gathering at Upper House in Hong Kong. Let's press on with our special edition of The Entrepreneurs, recorded here at Upper House in Hong Kong, proudly in partnership with Hong Kong STP. Now, if you know the programme, you should know, hopefully, what we do.

2:25We seek out inspiring people, innovative businesses, the freshest ideas that are driving entrepreneurship and business around the world. and that's what we're going to do. We're very lucky. They sometimes let me out of the studio and I get to go out into the field and meet practitioners, exemplars, some of those benchmarkers that I mentioned, and we've got a couple of those here today. I think they're unified by an attitude, a hunger to embrace change and to seize the opportunity that's prompted by it. So let me introduce the special panel to you. We have Albert Wong, the CEO of Hong Kong STP, and alongside him, Dr.

3:02Alan Zeman, of course, chairman of Langkong Fong Group and an advisor to the corporation. Gentlemen, a warm welcome. If I can invite you to grab your microphones so we don't lose any of your insights. Albert, I wanted to start with you, just I guess to get a headline, first of all, in terms of we're talking about innovation and technology and how this sort of shapes, if you like, the identity of Hong Kong. Just give us a quick bit of context in terms of how Hong Kong STP fits into that and to what extent those values, the pursuit of innovation and the drive of technology does inform the identity of contemporary Hong Kong.

3:40Let's start with the macro picture about Hong Kong, China and the world. I think if you look at Hong Kong, for the longest time, Hong Kong is always about finance and tourism and retail and logistics. These are the pillar industries. You're not wrong if you think of Hong Kong that way, but in the past six, seven years, there's been a lot of investment, a lot of national strategy that is put into this place. Two and a half years ago, President Xi was in Hong Kong and he came to the science park. He was supposed to spend 45 minutes in the park, but he spent an hour and a half. His message was that there are innovation technology hubs in China, Shanghai, Yangtze River Delta, Pearl River Delta, Beijing, Tianjin, Hebei.

4:16But Hong Kong is the international innovation technology hub. For various reasons, one of them is that Hong Kong, we have five universities that are ranked top 100. There are only two cities that have so much concentration of R &D universities. There's Hong Kong and London. In fact, London has four. We have five. So this is the very important thing of Hong Kong, that we are good in basic research. But we haven't done good enough in translational, meaning we have done basic research, but they do not turn into products. Versus you look across the border in Shenzhen, they've been doing so good in the past 30 years in commercialization, entrepreneurship.

4:51And this is the largest ecosystem across the border. And in my opinion, I was born educated in Hong Kong. I really think that we've lost a number of years. But if Shenzhen can do that in 30 years, we can do that in the next 10, 20 years. This is what we're looking at. The other thing about Hong Kong is that we have a special position in China because we are the most international city of the country. We can bring technology and people in China out to the rest of the world, which we've been doing. I can talk about that too. But we can also attract talent and technology to come to Hong Kong and explore China.

5:21So these are the two main reasons. to basic research and being an international hub of the country. And that is why Hong Kong should play a big role in the IMT, innovation technology, for the country. It's not just Hong Kong, it is China. The globe is a national strategy. Well, we'll talk more about the relationship with China and Shenzhen in a second. But Alan, let me bring you in here. You're somebody that people will know has been a real leading light, a force in, well, I guess, shaping the sort of contemporary fabric of Hong Kong. Just to pick up on what Albert was saying, what do you think that next phase will look like, should look like, in terms of how technology is woven into that fabric?

6:01Well, I think in the past, I mean, I've been here 57 years, actually. So I've been here under the British years, I've been here under the Chinese years, and I've been in China for 45 years as well. And so I've seen the changes taking place. Hong Kong traditionally was known as a cultural desert. technology was not a factor. Hong Kong was all about property market and stock market. And it was a financial center. And that was really, and the gateway to the world, the super connector between China and the West and the West and China. And so that was the way people grew up here, you know, without really advancing in technology.

6:43China, on the other hand, it was just nothing. It was farms and field. But 30 years later, it's one of, to me, it's the most prominent tech place in the world. And we're 14 minutes by high-speed rail away from Shenzhen now. And so China continued on technology. Hong Kong just kind of was stuck in a time warp. But suddenly when President Xi Jinping was here and went to the science park, and I'm in China almost every two weeks. It's so technologically driven, everything. They don't use cash. Everything's Alipay or WeChat Pay. Everything's using your phone and everything's technology driven, everything, whatever you can dream of.

7:26The best in the world, the famous US still uses cash and credit cards and the rest of Europe, same. But because they have 1.4 billion people, they need to do it. Technology really simplifies the life of people. Hong Kong suddenly woke up. If you listen to Financial Secretary, this week has been really busy with so many events in Hong Kong. Every second word that came out of his mouth is about AI, AI, AI. And I think the fact that DeepSeek in China both showed the world what China can do and what can be done for 5.6 million U.S. dollars, compared to 50 billion in a close environment versus an open environment.

8:09It just changed the concept of people, and it enthused now in China everyone, and Hong Kong as well. That euphoria has kind of come into Hong Kong with so much gusto. We just finished the Jump Starter yesterday event, and it was amazing. 800 international people, startups who came to Hong Kong and wanted to, you know, everything, everywhere from Sweden, Switzerland, Germany, you name it. And so everybody has a dream. And Hong Kong suddenly has become, we have money. That's the good thing. And the government suddenly woke up that it's not just about finance. Well, let's interrogate that a bit more deeply now, but let me bring that back to you in terms of this cross-border relationship with all of its complexities.

8:59What does that look like? What should it look like? There's potential for great collaboration. There's obviously a rivalry of sorts. Is it a healthy rivalry? Are there tensions? What's the secret to most effectively navigating the complexities of that relationship? I think this is a very important question. Shenzhen is across the border, definitely a big ecosystem. Hong Kong has a special role. I think we need to find out each thing that I was talking about, the basic research, the international connection. These are the things that we could do well. So I'll be honest, Shenzhen, Hong Kong are rivalry.

9:30There are competitions going on, but we should focus on what we can do well. There's a lot of things that we can do and Shenzhen cannot do. We talk about AI, we talk about biomedical research. Don't just focus on AI. AI is everywhere. I think I would even say that AI, you don't need to talk about it anymore. It's just everywhere, everything. We should focus on getting the, we call it the zero to one, the basic research, and then try to translate that into commercialization and products. The other thing is that we should build up our own investment ecosystem to help the startup technologies. Hong Kong is a big hub for finance, property development, property markets and stock markets.

10:08But the VC investment in Hong Kong, in my opinion, is underdeveloped. There are some good VCs, good early stage investors. But I was in Silicon Valley a number of times last year. I think we are way behind that in terms of the way we do early stage investment and how to help the startup. and the other thing about Hong Kong is that in the past few years we have done a lot of work in creating a lot of startup tech companies in Hong Kong we have right now our statistics says that we have about 4 ,700 tech company startups in Hong Kong that seems like a lot we've been growing like 30 40 50 percent every year but this is 4 ,700 but across the board in Shenzhen you talk about 20 ,000 so we need to grow exponentially although we've done a lot of work we're just not big enough So these are the kind of things that we need to do.

10:55And to answer your question, yes, there are rivalry going on between Hong Kong and Shenzhen, but we need to focus on what we can do well. And we need to grow exponentially. And just so you know, in the science park right now, we're now almost full, 95 % occupied. But we're going to build another science park in the Northern Territory in the next five to ten years. The same size of a science park. I have no idea what to do. We're working on it, but we're going to build a new science park in the next five to ten years. Yet more exciting developments. Alan, let me ask you about that. we alluded to the sort of geopolitical landscape and you were saying, you know, the government's kind of woken up to the opportunity.

11:28Does the unique sort of political status of this place provide an opportunity to deliver in terms of the challenge that you painted before? Can you tell us how this backdrop can actually affect the change we need? Well, in the past, we didn't have land. We were blessed with the UK, who were originally deemed 7 % of all the land in Hong Kong for residential and 12 % for commercial. And that's what we were stuck with, and we maintained that. Hong Kong's a beautiful place, but the shortage of land really, really caused a problem for innovation, for new things. But we've now allocated, under the previous administration, to do something called the Northern Metropolis, which is attached to Shenzhen, which is our neighbor, which is a plot of land that really will house, I think, about 300 ,000 residents.

12:28But there's also going to be a big allocation for new development, for technology, for buildings, for attracting talent. And so even the Science Park, there's three buildings that are just being finished. One are finished and the other two will be not too far distant in a place called Hetau. And so the connection, you know, I know we like to think we're different than China, Shenzhen, whatever. It's now becoming the integration, one big area, one big loop. And that's the start of it. And the idea now is to attract companies who can set up that because now we have land. So there's no excuse anymore.

13:12And so, you know, I've seen the Science Park from the first days when I was just starting off, not with people from technology, basically, but, you know, kind of people who are consultants for development, you know, typical government appointees, that kind of thing. But until these two guys came along, Albert and, you know, and the team, just everything changed. And now we became a serious contender. And we have, you know, as he says, we're 95 % full there. And now attracting, and the other thing is startups need money, but I want to attract established companies. Especially, we have the opportunity from China.

13:55There are so many good companies in technology and in all facets of technology, not just AI, but everything. And chips, semiconductors, you name it. And so I honestly think now that we have land and we are the gateway to the West, we can be the super connector between a lot of these companies who want to go to the world. And really Hong Kong suddenly becomes a hub of activity. A lot of companies like Huawei, it's a great company in China. You know, they have the big presence in the science park, but there's so many of those kind of companies. And so, you know, now AstraZeneca will be opening up in Hong Kong and CATL, the battery company, will be opening up in Hong Kong the first two.

14:42But the more internet and the more technology companies who can open in Hong Kong, it changed the brands immediately. You know, it's a different world suddenly. Well, let's talk about that opportunity as a super connector. And I suppose there's various facets to it. There's this question of market access. Yes, there's obviously the issue, Albert, of funding, but talent is something you've both alluded to already. What is the critical talent acquisition strategy as you see it? Or perhaps more explicitly, what should that strategy be? Yeah, Alan was talking about Huawei and some of these big companies that are moving to Hong Kong.

15:20Companies move to Hong Kong not because of the incentives or other things, it's really because of talent. We've been working on the talent initiative in the past few, four years. It's actually really not part of our mandate to do anything about it, but we have done a lot of work in talent. And when I talk about talent, there's really two things. One of them is to provide opportunity for the local youngsters. There's a lot of good young people in Hong Kong that are very good in the STEM subjects, in the science, technology, mathematics. They often win a lot of things in international competition.

15:46So we need to provide them opportunity for training, for development, for internship, and also let them know what is going on, what is available. So give an example. Last summer, we have about 350 interns in the science park. Most of them are from local, but a lot of them are from international. They had a great time. I put them in the startup and they learned a lot. And I went to UK just last month. I went to UCL, Imperial, and King's College, and then Cambridge, Oxford. They were all the students. In UCL alone, they have like 600 applications for our internship. So one of the things that we want to do is provide opportunity for the youngsters to experience what it is in technology innovation.

16:26We don't do education. We don't do research. we wouldn't touch what the university is doing. But we want to provide opportunity and give them hope that pursuing career and technology is good. I honestly think that this is shifting. I keep saying I was born educated in Hong Kong. I haven't spent much time working in Hong Kong because there's just not enough opportunities. And if you think about, if you look at the Hong Kong culture in the past, it was, say, eight years ago. It's always about finance, and I wanted my son to be an iBanker. Of course, they wanted to be a doctorate and lawyers, But in my days, in the 80s, 90s, it's CS, computer science and engineering.

17:01But nowadays, it's business. But I think it's changed a lot. The culture has shifted a lot. There's a lot of interest of pursuing a career in technology. So that's for the local. And I would say equally important is to attract talent from overseas. So I'm not saying which one is more important, but equally important, local talents and international talents. And we need to attract all the talents from different parts of the world. I was in some of the international universities in West Coast, Berkeley and Stanford. And the opportunity for these people to come work in Hong Kong, they want to do that.

17:31You come to Hong Kong, I would say that you are working close to China, but you're in a different system, one country through system. And the opportunity is for you to work with the universities, pursue basic research while doing this translation. So the talent landscape is about two things, give opportunity and give hope to the locals. And equally important, bring all the talents from different parts of the world. And I think Hong Kong can do this better than any cities in China. Can I ask you, Alan, about tension? And it's interesting, I think, if you think culturally, and Albert was talking about the shift in culture, if we look at culture, if we look at placemaking, things that you've been so deeply involved in, balance is always critical, right?

18:10And you need to balance up the heritage play and all of that incredible story with this much more progressive and fast-moving agenda. is there a tension there with making sure that Hong Kong strikes the right balance? And as someone who knows it so deeply, how do you strike that balance? You're a man who knows. I think that for sure, as Albert said, there's a new, well, this generation now of young people who, before we're lost, you know, who really gave up on Hong Kong, many laughed, you know, and we've been through many, many different ups and downs. And so now, suddenly, there's this whole renewed optimism.

18:52And it's funny, one thing, I believe, changed the optimism of all young people, all people around the world, and really marks China and Hong Kong as being a place to suddenly come, and that's DeepSeek. DeepSeek was able for 5.6 million US dollars to prove with open source, you know, instead of closed source, which ChatGPT was doing with OpenAI was doing, was really able to show that you don't need to spend 50 billion on a closed source system. 5.6 million, everyone can be in technology and do well. I saw this morning that Liang, who headed it, he's now, I think, the second richest in China. Just unbelievable, just within the last few months, actually.

19:44And so that was the game changer, both for China and Hong Kong, to wake up that we can also do. We used to look up to the U.S., so there's a cultural change. The other thing that we must remember, We have five top universities. For the last 20 years, we've been the top 100. Three of them are in the top 25 consistently. And so R &D is amazing. And if you look at, if you follow the news, what's happening is all scientists, all people who were in the U.S. in top universities and all that, all Chinese, are all coming back to China. In Hong Kong, I believe, as we now have the initiative of being, you know, with all this R &D that we have and the young people, I believe we can really make a statement for ourselves and really become a culturally driven, well, IT driven city, you know, and not just about finance.

20:45The good thing is IT needs finance. That's one thing that we excel in. We have 2 ,700 family offices at the moment. And within the next two years, we will be number one. And we were number two before Switzerland, as, you know, traditionally was always number one in family offices. We will beat Switzerland in two years. And so, yeah, and the government finally is, you know, HKIC, you know, the different organizations putting$100 billion into different technology-driven companies, startups. And so now we were weak in BCs, especially in technology for a while, because it was not the thing. Now you're going to see a totally different mandate.

21:31Well, and it's interesting that there's this sort of emphasis on genuine value creation. This is important if we look even at the work of Hong Kong STPL, but, you know, it's about, you know, you're a park, but it's also about investment, not a gigantic player, but a very significant one. But the pursuit of value creation, we need to make sure we're not always discussing these things in abstract terms. I mean, are there interesting sort of case studies or use cases that can demonstrate that kind of value generation in the work that you have done and still do? Yeah, the science park itself is not a big area.

22:03We've talked about 200 ,000 square meters of land, 20 hectares, 22 hectares. We have altogether now about 2 ,000 companies, all of them are on site. We provide a lot of communal facilities for semiconductor data, biomedical, for startup, for small companies to do their product development. and we also do things like incubation programs. So you have an idea to start a company. We'll work with you over the period of one to three years to realize your dream to not just about product, but also finding businesses. A number of things that we have done recently on top of all this talent and incubation is to bring these companies outside of Hong Kong because Hong Kong itself is so small, only 7 million population.

22:44We need to bring them outside of Hong Kong, like going to China, Greater Bay Area, but even more importantly, going to the West Coast. Last year, we sent five companies to Palo Alto for six months and asked them to just go there to survive, not to train, not to be trained, not to learn, but to survive. And they need to figure out what to do with the legal entity and ended up they all raised some funding and businesses. We're going to send 10 companies next month. And we are sending companies to Singapore, Southeast Asia, Thailand to look for businesses. And a couple of companies are successful in the Middle East.

23:19So one of the biggest value creation for us to do is to help these guys find businesses, not just the technology science, but commercialize, find the businesses. The other big thing is not just about finding businesses, but also finding investors. So we are an investment fund. From our own balance sheet, we're able to fund a VC. We invest in Siri to sit to A round. We have invested in about 30 to 40 companies now, but also we own some shares in some of the better companies. So altogether, we have about 130 companies that we own some shares. We are now, the AUM as an management is about$2.2 billion, so roughly$300 million.

23:57So we have evolved from being a park management company, facility management, into incubator, to accelerator, to a talent hub, to a$2.2 billion,$300 million AUM investment fund. And I am sure in the next five to 10 years, we'll have new things to do. I don't know yet. We're going to pivot and find new things to support all this development. Because Hong Kong is growing up so fast, I cannot predict what is going on. It's just the only thing I can predict is that it will be very, very exciting. We are getting philanthropy. I mean, we're getting donations to help us. And we got a lot of help from good people to help want to play a role in this.

24:33It's not about the money, but want them to be part of our ecosystem. So we are, Sun and I keep on reinventing what we're doing. I'm sure there will be new things going. By the way, I was saying that with the next five to 10 years, we're going to build a new science park. So there will be a lot of exciting things happening here. So just come talk to us. I just want to ask about this sort of the internationalizing of these tech advances. And you've both spoken about this so much. Just if we look at the U.S. And Alan, I'll throw this over to you. Obviously, we don't want to get into the thorny issues of what's going on in D.C.

25:02at the moment. But, you know, these things need to be looked at on a global basis. I don't know. If Sino-U.S. tensions are ratcheted up, if there's an escalation there, what kind of trickle down and what kind of impact does that have on trying to drive a progressive tech-led agenda and is it one of those examples where it makes things more volatile it maybe adds uncertainty does it also provide a great opportunity if that's happening over there well it certainly does because before of course everybody looked to the u.s as the gift to the world you know especially for technology and every other thing they were their number one in the world europe where you come from was, you know, US was the savior for here.

25:46And we just had something called the Boao Conference in Shenzhen. Our chief executive, John Lee, was just there. And I think in the month after next, he will be leading a delegation to the Middle East of first time companies from China, a lot of companies from China, from Hong Kong in technology, basically, because that's what China is all about now, because they have an aging population. And what President Xi Jinping has deemed in two sessions, which just finished a few months ago, was that they must, well, number one, they've recognized all private enterprises because private enterprise, in the past, the SOE, the state-owned enterprise, was really the ones that they had to look after because they employed a lot of older people.

26:34But now, going forward, technology is deemed that China must use technology now. 50 % of the SOEs has to be done. All the factories need to use technology as 50 % to really deem, because as people retire, technology, you know, robotics is like their number one in the world at the moment. And they're using it in a lot of production facilities. And so they're so far ahead of the world in that. And so what will happen is Hong Kong suddenly, with the chief executive joining with, well, leading actually the pact of the Middle East of both Hong Kong and mainland, the integration together is suddenly looking as one instead of two separate places, which is a change of a culture.