Exclusive Interview with Shirley Yuen

Views from the Chief Executive,Hong Kong General Chamber of Commerce

 

Innovation Hong Kong: How might the HKGCC aid Carrie Lam’s drive to enhance high-tech innovation for Hong Kong?

 

The HKGCC organises the Hong Kong Awards for Industries: Innovation and Creativity, which aims to promote the development of the innovation and creativity culture, and related ecosystems, in the local business community.

 

The Chamber also runs a wide variety of events (both networking and knowledge-based), which helps companies expand their business networks, keep abreast of the latest market information and technological development, and learn from successful entrepreneurs about their innovative and creative approaches to running a business.

 

Within the Chamber’s specialized committees, we also thrash out views and suggestions on ways to enhance Hong Kong’s competitiveness, with high-tech and innovation being high on people’s priority lists. We then distill these down into concrete, practical proposals that we submit to the Government in our submissions. Many of the proposals presented by the CE in her Policy Address stem from the Chamber’s submissions.

 

The CE mentioned that the Government will focus on four key areas in the context of innovation and technology development to drive the economy, namely: artificial intelligence and big data analytics, biomedicine, smart city, as well as fintech. As business and investment drive the economy, we would like to know how the Government came up with these sectors and where the biggest potential opportunities are. We hope to work in sync with the Government to maximize the degree of success in these areas, and the best way to accomplish that is to have a clearer understanding of how they arrived at those sectors so that we can also share our views and experiences. This will be a win-win for all concerned.

 

 

Chief Executive, The Government of the Hong Kong SAR- Carrie Lam meets with Stephen Ng, HKGCC Chairman with his Board and CE Shirley Yuen

 

Innovation Hong Kong: How will HKGCC help its members develop with developments such as the Greater Bay Area, Shenzhen Park, and One Belt, One Road in terms of innovation and investment?

 

A substantial number of the some 500 activities organized by HKGCC annually are knowledge-based, experience-sharing roundtables, which aim to keep Chamber members abreast of the latest development of important issues so as to identify challenges and opportunities.

 

For the hot topics of the Guangdong-Hong Kong-Macao Area, the Belt and Road Initiative and the Lok Ma Chau Loop, for example, we have invited senior government officials, industry practitioners and professional experts to brief our members in such roundtables.

 

HKGCC has also organised missions to visit selected countries along the Belt and Road, and to most cities in the Greater Bay Area (GBA), so that members can have first-hand experience of the places involved and explore collaboration opportunities.

 

The Chamber has formed a Belt and Road Special Interest Group, and a Greater Bay Area working group is in the making, so that we can formulate better and more focused strategies to capture business opportunities for the wider membership.

 

The Chamber will continue monitoring the development of these initiatives closely, and will relay current relevant information to our members.

 

Innovation Hong Kong: How can Hong Kong work to empower more women in science and technology?

 

The old-school thinking that women are not cut out for a career in science and tech businesses is certainly outdated globally as well as in Hong Kong. In fact, many leading tech firms in the world are headed by females, and so are some tech firms in Hong Kong that are also HKGCC members. With anecdotal reports that more and more females are enrolling in science and tech subjects at university, the trend of increased female participation in those previously male dominated careers is definitely rising.

 

The Government should take a more proactive role in promoting science and tech businesses as career options for both genders. HKGCC empowers more women to get into such careers through our Women Executives Club, which aims to strengthen the fellowship of female Chamber members and facilitate intellectual exchange among them by raising awareness of social and educational issues.

 

Among many other activities, the club organized a roundtable event on success strategies of female CEOs in non-traditional professions in Hong Kong a few years ago, with the three CEOs coming from chemical engineering, construction consulting and high tech.

 

Innovation Hong Kong: Tell me a bit more about the Chamber’s response to the Smart Hong Kong Consultancy Report you wrote to Allen Yeung on 20 September 2017.

 

The Chamber has all along been supporting the Government’s initiative to embrace and adopt technology more widely so as to develop Hong Kong into a smart city. We appreciate that the Smart Hong Kong Consultancy Study Report has consolidated valuable input from stakeholders, which provides ample evidence that there is a consensus regarding the overall direction for smart city development in Hong Kong.

 

We therefore urge the Government to be more swift and resolute in breaking through the bureaucratic routine and take the lead to scale up the momentum immediately, particularly when our neighbouring jurisdictions are ahead of us in adopting smart city initiatives.

 

Innovation Hong Kong: Following that more closely, what would an ideal Smart Government of Hong Kong look like in terms of the technology you proposed?

 

Firstly, the formulation of a Smart Government is a prerequisite and is fundamentally important for the development of Hong Kong into an innovative and sustainable smart city so as to enhance Hong Kong’s competitiveness.

 

We are glad that the Government has adopted some of the suggestions in our smart city submissions, in particular, designating a high-level authority to champion the smart city agenda, empower government departments to get on with specific projects and ensure interdepartmental collaboration to achieve the objectives of the six smart dimensions. This top-down approach is believed to be the most effective in breaking the existing departmental silos within  government bureaucracy.

 

As she mentioned in her 2017 Policy Address, Chief Executive Carrie Lam will personally chair an internal Steering Committee on Innovation and Technology to drive development and to steer collaboration across bureaux and departments, with effect from the most senior level.

 

One immediate area which springs to mind is moving from paper-based to electronic. The amount of paperwork required for something as mundane as a vehicle registration to visa applications is unbelievable, and as such drags down productivity and unnecessarily raises costs. At the Chamber, our online business documentation services have saved a huge amount of paperwork. It has significantly reduced the time and cost needed for processing, and of course we can see immediately the status of applications. So we have first-hand experience of how productivity, efficiency and cost effectiveness can increase by going digital.

 

At the same time, various government departments need their data to be able to talk to other departments. Everything needs to be able to be synchronized across all records, so if I update my address with one Government department, it can automatically be synced with others which will obviously save an enormous amount of time and effort.

 

Also, the Government should identify and implement handy technological solutions that could bring in quick wins to demonstrate social and economic benefits of smart city development, so as to promote Hong Kong’s smart image.

 

Innovation Hong Kong: In September, you wrote a letter to Agnes Wong, Director-General of Communications at the Communications Authority, regarding changes from fixed satellite to mobile services. Why is this important for Hong Kong?

 

The reassignment of the existing 3.4 – 3.7 GHz band from fixed satellite service use to that by mobile service is an important step forward for Hong Kong if we ever want to introduce 5G services in the HKSAR. This is of particular significance to the future development of innovation and technology in Hong Kong, given that 5G is fundamental to driving the wider adoption of the Internet of Things, a key ingredient in the Government’s aspiration to transform Hong Kong into a smart city.

 

Also, the change will align mobile service standards in Hong Kong with those in other jurisdictions and minimize the possibility of cross-border interference from Mainland China, which plans to implement its own 5G services by 2020.

 

Innovation Hong Kong: What are your thoughts regarding the economic roadmaps from Beijing for 2020 and 2030?

 

At the opening of the 19th National Congress of the Communist Party of China on 18 October, President Xi shared his vision of making the country a global economic leader by 2050, as he envisioned that such development would be sustained by a thriving middle class, among other favourable factors.

 

Certainly, he was not being unrealistically optimistic, as he also flagged that the “imbalanced and inadequate” growth of the Chinese economy would be the main challenge at the current stage of development. He followed by suggesting that growing income inequalities, along with weak innovation capabilities and  shortcomings in environmental protection, were some key concerns.

 

These visions, together with others that President Xi laid out in the 19th National Congress, are in line with the commitments proposed in the 13th Five Year Plan, which vow to eradicate rural poverty by 2020 and transform the country into an innovation-driven economy by 2030.

 

To develop the country into an innovative economy, investment in the relevant areas is required. According to the National Bureau of Statistics, research and development (R&D) expenditure in the Mainland surpassed RMB 1.5 trillion (US$225 billion) in 2016, representing 2.1% of the Chinese economy. This puts the Mainland in the ranks of Belgium (2.5%), France (2.2%) and the Netherlands (2%), but it is still behind South Korea (4.2%), Japan (3.3%) and the United States (2.8%), suggesting that there is ample room for further R&D investment, which in turn should stimulate stronger economic growth.

 

Therefore, with the continued support of the top leaders, we expect R&D’s share of the Mainland’s GDP to increase steadily over this new term of the Government. During the course of such development, more favourable policies could be introduced and implemented. As a whole, we expect a stronger investment wave targeted at strengthening the country’s innovation capabilities, which may be done through new and increased incentives for relevant investment activities.

 

If R&D’s share of GDP increases to, say, the level of the U.S. in 2022, the R&D expenditure in the Mainland will reach RMB 3,382 billion, representing an increase of 116% against the 2016 level. Not to mention the indirect benefits resulting from R&D investment, the increased R&D activities by themselves would be an eminent driver of growth for China’s economy over the medium term.

 

Innovation Hong Kong: What do you hope the Pearl Bay Bridge will achieve when it opens?

 

I think the completion of the Hong Kong-Zhuhai-Macao Bridge and the Express Rail Link will bring huge benefits for all in the Greater Bay Area. The massive savings in time through improved connectivity, flow of goods and people will benefit everyone. It will open up the entire western region of Guangdong, so create growth and development in those cities. We will have far easier access to new opportunities, goods and services. The greater interconnectivity of the GBA as a whole will bring in more overseas investment. And we will be right in the middle of these new opportunities. The GBA represents the world’s 10th largest economy. It houses the factory of the world, and the world’s busiest air and sea cargo hubs. We are in a very exciting place at a very exciting time. I have very high expectations of the benefits it will bring to both the public and business.

 

For example, we can partner with other cities in the GBA to woo more international tourists as part of multi-destination holidays in the area. This will be a boom for key sectors from the airport and hotels down to local mom and pop shops or restaurants with the easier flow of people.

 

To further grow the air cargo business in the GBA, we can encourage closer collaboration between the Hong Kong and Zhuhai airports, again to capture the opportunities generated by the rapid development in the western GBA. We look to the Government for leadership in working with the Zhuhai authorities in facilitating development on this front.

 

Innovation Hong Kong: Affordable housing is a major challenge face Hong Kong. What would your suggestion be to developers?

 

We understand that home ownership is one of the key aspirations of the majority of Hong Kong citizens, particularly young families. Unfortunately, housing affordability in Hong Kong has increasingly become an issue in recent years due to a combination of factors from within and without our borders. These include quantitative easing by central banks around the world, persistently low interest rates, keen investment interest from and appetite of overseas investors, and the inability for supply to keep up with demand. Most of these factors relate to the demand side. But supply and demand feed off each other. If supply were sufficient, we would have the high prices that we have now.

 

We have been talking about better supply of land for many years. The Government has been presenting proposals for possible sites. The CE has a new Land Supply Task Force to identify possible options. These are good initiatives, but we need to get everyone onboard. We can identify sites for reclamation, land rezoning, and so on, but they won’t be any use if people are not onboard. So besides identifying more sites, the Government has to put a lot of attention into allowing people to present their views and ideas directly. I am not talking about just doing more consultations, which tend to be a one-way street, but organizing open debates for both sides to express their opinions.

 

Also, the Town Planning Board also needs to be closely involved and engage with people. The solutions need everyone’s contributions. We cannot just say the Government needs to solve the problem. It will require the Government to facilitate, the public to support, the town planning process to be expedited, the construction cycle to be shortened, labour shortages to be addressed … so there is far more to it than simply saying making more land available will solve the  housing problem.

 

It seems there is a rising contradiction between the aims of Hong Kong and the competitive realities of Shenzhen as a place to live and work with high-tech manufacturing and innovation. What do you think of this sentiment?

 

I am not certain if it is correct to say that there’s a “rising contradiction” between the cities so to speak. Hong Kong certainly possesses strengths over Shenzhen (e.g. finance and professional services), and vice-versa (e.g. high-end manufacturing and e-commerce).

 

Given the proximity of the two cities and the scarcity of resources such as talent and capital, some degree of competition is only natural without coordination of governments. And this is exactly why the Central Government is putting so much emphasis on better collaboration of governments in the Greater Bay Area to prevent duplication in deployment of resources.

 

There are also areas where the two cities can seek more collaboration, which requires cross-border movement in talent, capital, commodities/services and information. However, as they fall under different customs zones as well as legal and administrative systems, such improvement in cross-border movements will depend much on positive efforts to strengthen cross-institutional cooperation and collaborative interaction between the two cities.

 

Innovation Hong Kong: How can Hong Kong strive become the hub of the 21st Century Maritime Silk Road over Shanghai?

 

The distinct geographical location of the two cities differentiates the roles and the positioning of Shanghai and Hong Kong. Shanghai, being the financial centre of Mainland China, is probably in a good position to serve nearby Mainland cities along the Silk Road. Hong Kong, as a major international finance centre, is better positioned to deal with matters involving Mainland China and other countries along the Silk Road. Therefore, the two cities are not necessarily in acompetitive stance but rather can collaborate on many fronts to push forward the Belt and Road Initiative.

 

Hong Kong’s strengths are in its international expertise and reputation. These advantages should not be underestimated. The OBOR will first benefit financial and professional services, because these sectors will be the first movers. Financial institutions, lawyers, accountants, architects, engineers, etc all will be playing an important role in facilitating the OBOR. We have the expertise. We understand different cultures. We have an internationally renewed reputation for quality, expertise, integrity and for getting things done. All these advantages cannot be easily replicated by any city in the world, let alone Shanghai.

 

Shirley Yuen, CE HKGCC with the Chairman of HKGCC Stephen Ng

 

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