HK is'losing out', but the spirit remains
Updated: 2014-09-12 07:02
(HK Edition)
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Hong Kong people are renowned for their resilience and entrepreneurial spirit, but a recent study claims that the SAR has yet to match some of its neighbors in terms of that business spirit.
The unflattering remarks were made in a study conducted jointly by Google and The Chinese University of Hong Kong's (CUHK) Centre for Entrepreneurship. The report says local entrepreneurs are under pressure from societal values and challenges in securing seed capital for their businesses, which, in turn, have lowered their entrepreneurial spirit.
Thus, it says, Hong Kong is losing out in this respect to other cities in the region.
Years of economic prosperity have resulted in a high risk-averse society, forcing younger generations to go for safer career options encouraged by parents, the study says, and social antipathy in Hong Kong to embarking on an atypical career path is also strongly perpetuated by friends in addition to family.
"Hong Kong is quite successful in some industries, like the finance industry, which are able to give employees very high payoffs. Meanwhile, the city's unemployment is low, and it's quite easy for young people to find jobs," Professor Kevin Au, director of the center, told China Daily.
"They (young people) may not like the job they found. But, compared to other places, including the mainland, they can find a job pretty easily here," he explained, adding that since it's quite easy to get a job, young people in Hong Kong are usually less motivated in starting their own business.
He said Hong Kong people still harbor a very strong mentality of working for big corporations, while parents and schools are pushing youngsters to take examinations to get higher grades so they could ultimately land up at big-name corporations.
In tandem with social pressure, aspiring entrepreneurs also have to face their families and friends, and they have few options for initial investment. Based on a survey of 612 entrepreneurs, 88 percent of them said their prime source of seed capital is self-funding.
Small market
Despite an abundance of financial resources given Hong Kong's status as a global financial hub, professional investors are not contributing to local startups for various reasons, such as Hong Kong's small market size, a lack of strong business ideas and legal issues that hinder investment opportunities.
"Hong Kong startups, as a whole, may not be very attractive to venture capital. One of the reasons is that venture capital investors are usually not interested in businesses that only serve a particular market. They want to invest in businesses that can scale up," Au said, adding that fortunately, an increasing number of local young entrepreneurs are now targeting not only the local market, but also the mainland and overseas.
Nevertheless, experts note that the future is bright for reviving the SAR's entrepreneurial spirit, as major institutional players continue to accelerate investment and involvement in the city's startup environment. In addition, knowledge providers from the private sector and universities are getting more involved in offering programs and training tailored to the needs of entrepreneurs.
The survey also shows that a typical Hong Kong entrepreneur is male (72 percent); most likely between 21 and 25 years old (38 percent); holds a BA (58 percent); and is a graduate of a local university (83 percent).
Most entrepreneurs cite their major strengths as creative thinking, business management and presentation skills, while they are least strong in fundraising and coding, while most of them lack experience in entrepreneurship.
Contact the writer at sophiehe@chinadailyhk.com
(HK Edition 09/12/2014 page9)