Can Hong Kong Emulate The Success Of Hangzhou’s Tech Titans?

The financial challenges confronting Hong Kong, such as deficits and budget cuts, have generated significant debate and anxiety in the city. However, amid these discussions, a crucial aspect appears to have been overlooked – the potential for Hong Kong to explore new avenues for growth.

With the rise of DeepSeek – developed in Hangzhou, Zhejiang province – some Chinese cities are questioning why they have not seen the emergence of similar tech start-ups. In Hangzhou, a group of six artificial intelligence (AI) and hi-tech companies, known as the “Six Little Dragons”, have made a name for themselves, with the founders of DeepSeek and Unitree Robotics even attending a symposium on private enterprise hosted by President Xi Jinping.

Though Hong Kong currently lacks a robust presence in advanced science and technology, it should be asking similar questions. It should reflect on why it has not been able to foster start-ups the way Hangzhou has, and take lessons on how to cultivate a vibrant tech entrepreneurship ecosystem.

To position itself as a leading player in the global tech industry, Hong Kong must first establish itself as a high-quality talent hub and a tech-focused innovation centre. This transformation requires the development of an ecosystem that supports young entrepreneurs and promotes the growth of successful start-ups.

While the vision for tech progress is centred on the Northern Metropolis, the pace of advancement has been sluggish, raising doubts about Hong Kong’s ability to keep pace with its counterparts. In the Hong Kong Park of the Hetao Shenzhen-Hong Kong Science and Technology Innovation Cooperation Zone, just three buildings seem to be due for completion soon. This slow progress starkly contrasts with the rapid development seen across the Shenzhen River.

To address the obstacles hindering development, Hong Kong is adopting the zone-development model from the Chinese mainland for the Northern Metropolis. Assigning sizeable land parcels to developers and leveraging the private market for site formation and infrastructure development can enhance efficiency and reduce costs.

A general view of the land where San Tin Technopole, a key part of the Northern Metropolis, will be built, as seen on February 27. Photo: May Tse

Allocating land to attract major industrial projects, particularly leading technology companies, can significantly transform the region and expedite its evolution into a hi-tech hub. Companies like Huawei – which has a sprawling compound on the banks of Songshan Lake in Dongguan, Guangdong – serve as a prime example of the scale and ambition achievable in such hubs.

The success of Hangzhou’s Six Little Dragons can be attributed to proactive policies that include incentives such as rental subsidies. BrainCo, for instance, was founded in the United States in 2015 but later relocated to Hangzhou. BrainCo has emerged as one of the world’s major brain-computer interface companies in terms of financing and investment in research and development, alongside Elon Musk’s Neuralink.

The key takeaway from Hangzhou’s achievements is that without adequate space and financial support, Hong Kong may struggle to entice and retain tech entrepreneurs. Yet Hong Kong cannot afford to lag behind in the AI-driven tech revolution. To forge a path, it must first identify its own strengths and limitations.

The emergence of Six Little Dragons, for example, is deeply rooted in Hangzhou’s DNA. As a pioneer of the digital economy, Hangzhou has cultivated a diverse range of emerging industries and cutting-edge productive services, establishing itself as a key hub for China’s internet and AI sectors.

This aerial photo taken on November 28, 2023 shows a general view of Chinese e-commerce giant Alibaba’s headquarters in Hangzhou. Photo: AFP

Hong Kong recognises the significance of future industries such as life and health technology, artificial intelligence and data science. If its ambitious initiatives are to succeed, it must address several major challenges.

A major concern is the city’s lack of substantial research and technological breakthroughs. Japan, for example, has been a front runner in various areas of medical research and clinical applications, propelling global progress in health. Key domains where Japan has excelled include regenerative medicine, cancer research, longevity studies and dementia and Alzheimer’s research.

Hong Kong doesn’t have to replicate Japan’s achievements but it is vital for the city to leverage its strengths and focus on specific areas where it can compete with global leaders. By emphasising fundamental research, Hong Kong can lay a robust foundation for sustained success in key sectors.

The Northern Metropolis University Town should be envisioned as the nucleus and driving force of the innovation and technology cluster. By attracting renowned global universities and top talent to the academic town, Hong Kong can position itself as a world-class scientific and technological innovation platform and establish itself as a globally competitive industrial base.

An integral component of fostering innovation and entrepreneurship is the cultivation of a supportive ecosystem that nurtures aspiring entrepreneurs and supports innovative endeavours. Among the Six Little Dragons, three were founded by graduates from Zhejiang University, including the founder of DeepSeek.

President Xi Jinping shaking hands with DeepSeek founder Liang Wenfeng during a symposium on private enterprise in Beijing on February 17. Photo: CCTV

Zhejiang University stands out for its highest entrepreneurship rate among universities in China, placing it well ahead of its peers. This success underscores the importance of establishing a conducive environment for entrepreneurship within educational institutions.

Encouragingly, several universities in Hong Kong have taken proactive measures by implementing entrepreneurship programmes to cultivate hi-tech entrepreneurs. Through robust partnerships with industries, especially the vibrant Chinese private sector, these initiatives aim to instil students with an entrepreneurial mindset early in their academic journey. This strategic approach ensures that students are well-equipped to navigate the complexities of the business landscape and spearhead innovative initiatives.

By fostering a culture of innovation, collaboration and entrepreneurship, Hong Kong can establish itself as a premier hub for groundbreaking ideas, transformative ventures and sustainable economic growth.