Is Hong Kong Falling Behind?
Hong Kong has always been a special place in the region as one of the worlds largest financial hubs behind London and New York, the gateway for international businesses looking to operate in China, a retail hotspot for tourists and critical to the business world in APAC.
Over the years this has been changing and Hong Kong as a result has seemingly been in decline. Expat packages are no longer the norm and are now few and far between making it harder to woo international talent to the market to take up senior business roles. Shanghai and Beijing are becoming more international and Hong Kong is no longer a critical entry point to the China market for international businesses and Chinese businesses looking to operate internationally. Tourism has been greatly affected and retail, partially as a result has been on a downward slope along with other factors such as rising rent prices in the commercial sector. Singapore recently leap-frogged HK as the 3rd largest financial market internationally and Shanghai, Beijing and even Shenzhen are rapidly creeping up the list of most important financial markets.
In the world of digital technology and innovation, Hong Kong has not kept pace with other leading markets in the world. This can be partly attributed to the traditional background of HK (despite having the highest number of smart phones per person and mobile penetration above 95%) and the businesses operating being quite risk averse but also to the lack of real investment in bettering this. Singapore have invested heavily into financial technology and new technology in general whilst HK has focused on a new airport runway and high speed rail line into China. Cities and the people in them are shaped by the forces of innovation and technology. And today, it is digital technologies that are shaping our urban way of life and most people are enthusiastic about the benefits that technology affords us in our daily lives. There is so much improvement to be made in Hong Kong but this needs the backing and investment of the government and businesses to drive this, even the adoption of a simple digital payment method for taxi’s, which seems so basic and yet has not been implemented unlike most other major cities.
How can HK attract the talent that it clearly needs? Salaries are seemingly not as competitive as they once were and Hong Kong can be a very costly place to live with education costs extremely high and places limited at international schools, rents being amongst the highest in the world and not necessarily getting a substantial amount of space for the money and if you are looking to get a foot on the property ladder HK was recently found to be the most expensive city in the world to buy a home compared to the average median income for the seventh year in a row. On the positive side Hong Kong can still be seen as a very important business location and is the freest economy in the world with a tax level that is quite favourable to those high earners. It is also a wonderfully vibrant place to live and a truly international city.
Certain industries seem to be shifting their focus and it is the banks and insurance groups, retailers and travel & hospitality businesses where we are seeing these larger scale “digital & technology transformation projects” here in Hong Kong. There has been a realisation that certain things need to change/improve in order to keep business growing and that largely centres around how you interact and deal with your customers/citizens and their overall experience as-well as streamlining and centralising internal systems and processes, all of which requires unique and experienced digital and technology talent. This may be one reason behind the “digital transformations” not running and developing as smoothly and quickly as had been hoped by the businesses, however also the understanding and “buy-in” from top management seems to be lacking, if the issues that candidates and clients share with me is accurate.
So although we can see Hong Kong going through a bit of a decline and having to re-brand itself in a manner of speaking, this should present some unique opportunities for talent from the digital and technology skill set areas to really come in and effect positive change, especially if a data driven approach is utilised using the vast amounts of data available through multiple channels. Are the government and companies themselves that require this talent and these changes, ready to invest in them and implement them fully before Hong Kong lags too far behind other major cities?
Time will tell.
By Chris Ingham
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