Since the Covid-19 pandemic caused Hong Kong to close its border to all non-residents in March 2020, the region and its economy have struggled. Over three years on, John Lee Ka-chiu, government official and Chief Executive of Hong Kong, revealed a 2.7 per cent growth in the economy in the first quarter since the city reopened its doors. But what does the future and potential of Hong Kong now look like? The Fintech Times visited to find out.
In an effort to establish the region as an innovation and technology (I&T) world leader, the Hong Kong government invested over US$19.1billion into the sector between 2017 and 2022. Spending time in and around the city, it is clear that, as a result, there is now renewed hope and optimism for the future of startups and companies residing in Hong Kong.
Sparking growth with the Science Park
Managed by the Hong Kong Science and Technology Parks Corporation (HKSTP), the Hong Kong Science Park in Pak Shek Kok currently houses a working population of 19,000 from over 1,200 companies – which originate from 21 different countries and regions.
Just outside the 22-hectare campus sits InnoCell, a smart living and co-creation space, built to support the I&T ecosystem. The accommodation offers a variety of living options such as the ‘PowerHub’, designed to offer teams a private space to work closely together and accelerate their growth.
InnoCell’s offerings include collaborative working spaces, hot desks, meeting rooms, playrooms, kitchens and a gym. The building exemplifies the clear desire of park executives and the government alike to attract more companies from further afield: not just from mainland China, but from every corner of the globe.
Such has been the success of the Hong Kong Science Park and its InnoCell accommodation, that plans to expand the space drastically also appear to be a real possibility. Eric Or, head of partnerships at HKSTP, explained that the size of the science park could be as much as doubled, while there is also a good chance that an ‘InnoCell 2’ will eventually be built close to the existing offering. Or also claimed that over 90 per cent of the existing accommodation is generally full at any one time – even with a quick turnover of guests.
He also discussed how, because of the increasing interest shown in InnoCell since its opening, a rule has even been introduced preventing HKSTP staff from staying there at any time, unless they receive specific permission – with the rule even extending to staff wanting to visit on their own time, spending their own money.
The ‘Hong Kong Gateway’: the ‘missing piece’
Also looking to achieve a closer relationship with companies worldwide and highlight what Hong Kong and its science park can offer; HKSTP hosted the seventh edition of its worldwide competition for startups: EPiC 2023.
The competition hosted 618 contestants of up to 10 years old, from 55 economies worldwide. This move opened the competition up to substantially more companies, even seeing three unicorns involved: Leapstack Vietnam, Sensor Data and Doratoon.
During the competition final, situated on the 100th floor of Hong Kong’s tallest skyscraper, Or explained that “China is the missing piece” of the expansion ‘puzzle’ for most of the competitors.
“Every company have told us that they want to expand beyond their original country. They already have a presence in Europe, the US, and some even in Singapore. They’re now looking at China as their next growth engine.”
Can Anh Tung, CEO of AI innovation company Leapstack Vietnam, also explained to The Fintech Times the importance of Hong Kong’s unique position when entering the Asian marketplace: “Our target is to first expand into Southeast Asia, followed by Asia Pacific as soon as possible. We think the best opportunity for us is to go to the international market through the Hong Kong gateway. We consider Hong Kong a mature market with a lot of opportunity”.
Kellyann Ripnar, COO of UK-based financial crime ‘vaccine’ provider FinCrime Dynamics – the fintech champion at EPiC 2023, beating 351 other fintech applicants – explained how Hong Kong provides a key to entering not only the Asian marketplace; but anywhere in the world: “If we were to work with a tier one bank or cryptocurrency provider in Hong Kong, for example, that proves our solution is not something that just relates to the UK. It’s actually for the bigger global picture.”
How did EPiC benefit existing science park residents?
While international contestants revealed aims to expand into Asian markets, 153 fintechs and proptechs from Hong Kong applied, with 10 making it into the final 50. All EPiC 2023 semi-finalists also participated in a two-day exclusive ‘Grow Beyond Hong Kong’ immersion programme; experiencing HKSTP’s ecosystem through educational talks, business matching and networking with corporate partners and investors.
The proptech and overall champion, Skyland Innovation, is not only based in Hong Kong, but is also a tenant at the science park. Biang Li of Skyland Innovation explained how, although the company already enjoyed the benefits of the science park, the immersion programme highlighted opportunities available in the region:
“During the two days of the immersion programme, we learnt a lot about the resources available to us. These include the networks and funding available. I have been staying in Hong Kong for many years but I had no idea before the programme”.
Jessy Wang, HRBP at Skyland Innovation, mirrored Li’s views: “It opened our eyes to how many opportunities are available to us. We’re not usually open to this kind of information. EPiC has really been a gateway for us to learn all of these things at a fast speed and velocity to help us grow faster”.
‘The first step into China is Hong Kong’
Similarly, Canvasland, a metaverse advisory and production studio, is already part of the incubation programme offered by HKSTP and also resides inside the science park.
Zen Fong, head of metaverse ecosystem at Canvasland, discussed why the company decided to get involved with the competition despite already having close links with the marketplace and HKSTP: “We really want to attract more business opportunities. While we’d love to get investment, it isn’t our main goal. Our focus is on big logos. The bigger the logo, the more they provide credibility for us.”
Fong and the company took home the prize for ‘favourite pitcher’ at the EPiC 2023 final. After accepting the award, he explained plans to stay closely connected with HKSTP and the science park as the company grows: “We’re currently part of the incubation programme, but in the future, we’d love to join the accelerator programme and become the baby unicorn of the science park”.
Chatchai Chanvej, business development lead at decentralised identity solution provider Finema, spoke to The Fintech Times on how participating in the EPiC competition offered a number of benefits. He explained: “The main opportunity for us here is to find a local partner in Hong Kong and China. The first step into China is Hong Kong. This EPiC competition gives us a great chance to learn more about how to step into Hong Kong. HKSTP, the science park and the immersion programme have also given us a lot of supporting information and everything we need.”
Supporting later startups
Tee Pruitt, head of financial services business at environmental impact centaur Doconomy, explained why the opportunities provided by EPiC could benefit a late startup like itself. Pruitt said: “Right now there’s a lot of interest coming from APAC and specifically China. We got invited to be a part of this and it seemed like a very logical step to come and see the market for ourselves because it has been closed for so long.
“It’s a gateway into China from Hong Kong. But also, the facilities of the science park along with the immersion programme have enabled us to talk to investors and to potential investors. It’s a lot harder to do these kinds of things on your own – it’s great to have your hand held by a trustable partner like this.”
Troy Harvey, CEO of intelligent building system PassiveLogic, commented that “Asia is the fastest growing marketplace by far” and talked about how the EPiC competition offered a good opportunity to explore that marketplace but the science park specifically.
“We look for unique talent in our business. There are lots of roles that we have in our business that there’s at most a few hundred people in the whole world that have that expertise. As I looked at the science park I looked at what we could draw from here and how we could build a team here that brings together some of these unique roles”.
A bright future
Visiting Hong Kong, exploring the science park and speaking to so many company representatives, both there and at the competition, made it abundantly clear that the region has something to offer everyone. Fintechs, proptechs and mid to late-stage startups all have something to gain – whether that be expansion into Asia, or out of Asia – or providing opportunities to work with larger banks and promote products and services across the globe.
With the recent news that Hong Kong’s economy has grown for the first time post-Covid, it seems as though there is no better time than now to get involved with the city – which has made its stance clear: the I&T ecosystem is a top priority and could provide startups with one of the best opportunities for growth globally.