An academic paper on the practical aspects of innovation and technology implementation in Hong Kong. This paper suggests that a clearly stated strategy and implementation plan is needed for innovation and technology in Hong Kong.
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The politics and specifics of Knowledge-based economy implementation in Hong Kong
1. 1
The politics and specifics of
knowledge-based economy
implementation in Hong Kong
Dr. Gordon McConnachie
Founding Chairman, Scottish Intellectual Assets Centre &
Chief Technology Officer of Asia Pacific Intellectual Capital Centre
gmcconnachie@apicc.asia
Mr. Alan Ka-lun Lung
Director & General Manager
Asia Pacific Intellectual Capital Centre, Hong Kong SAR, China
alanlung@apicc.asia
Mr. Sharon Gal Or
Business Development Advisor
Israeli Chapter of the STARS Foundation
galorian1@yahoo.com
2. 2
Abstract
Purpose -- The purpose of this paper is to examine practical aspects of the implementation of
innovation and technology in Hong Kong. It takes the view that it is not enough for Hong Kong to
copy Mainland China's innovation system. Hong Kong is a unique part of China under "One Country,
Two Systems" and we need to make best use of Hong Kong's uniqueness and key competitive
advantages as a Chinese city that is part of, yet separate from China. For this reason we need to build
links with world best practices. Hong Kong is most useful if it succeeds in playing a unique and
irreplaceable role as the bridge between China and the OECD countries that would like to do
business with China through Hong Kong.
Design/methodology/approach -- This paper is built upon past whitepapers, presentations and a
proposal to bring Enterprise Europe Network to Hong Kong1
. It starts with the premises that Hong
Kong needs to put economic development and high-end job creation into practice. The paper explains
why Hong Kong’s economic diversification needs to be done through a focus on developing
knowledge-intensive industries and startups. However, before Hong Kong’s innovation ecosystem can
happen, public consensus must be built on why a new economic development direction is now needed.
Findings -- Hong Kong should continue to innovate and to transform itself from an export-dependent
manufacturing centre into one of the world's leading financial centers. Hong Kong should also try to
make best use of its very unique external economy of scale -- China's R&D capacity and the wish
amongst OECD countries to do business with China. These are the unique competitive advantages
Hong Kong needs to discover and exploit. However, indecision and inaction have not been useful. In
practice, support from the HKSAR Government is needed as a lot of practical policy initiatives need
to happen in Hong Kong first. Having a clearly stated economic transformation strategy, putting
together coordinated policies and gaining support from business and the public are the biggest
challenges ahead of Hong Kong.
Originality/value -- The viewpoints and recommendations made in the paper are original ones based
on observation and practical knowledge of the world's innovation eco-systems. Some insights of
economic development history and Hong Kong's political landscape are also included. The paper can
be used as inputs for a strategy and practical implementation of a knowledge-based economy in Hong
Kong.
Keywords -- Hong Kong, Knowledge-based Economy, Innovation & Technology, Enterprise Europe
Network, Innovation Ecosystem, Innovation Strategy, Intellectual Capital Management, 12th and 13th
Five Year Plan of China, Beijing-Guangdong-Hong Kong Knowledge Corridor, China's "Go Out"
Strategy, Economic Development Strategy, Political Economy, Meso-economics, OECD, European
Union, SME's Innovation Capacity, Positive Non-intervention, South Korea, Israel, Taiwan, Systemic
Innovation, Early-stage Technology Development Funding, YOZMA, Venture Capital.
Paper type -- This paper offers viewpoints and practical proposals on the implementation of a high-
value added knowledge-based economy in Hong Kong. It is also an economic development policy
paper that links Hong Kong to the developed OECD countries and Mainland China.
1
These whitepapers cover: "Realizing Hong Kong's prospect as a knowledge‐based economy a part of a rising China",
"Hong Kong Innovation and Technology Role in China's 12th Five Year Plan", "Hong Kong and the knowledge‐based
economy: development and prospects" and "Policy and practices of Hong Kong as a knowledge‐based economy and the
proposed Innovation and Technology Bureau". They are listed in the List of References of this paper.
3. 3
The politics and specifics of knowledge-based
economy implementation in Hong Kong
Table of contents:
Introduction
Why should Hong Kong diversify through a Knowledge‐based Economy strategy?
‐ Hong Kong's innovation system ‐‐ linked to but separate from the national systems
‐ Political economy lesson from Korea ‐‐ from "catch‐up" to "creative" development
‐ Strengthening the innovative capacity of SMEs
Winning the political argument for proactive support to economic development
‐ "Free Market" versus "Economic Planning"
‐ Liberalize the economy by supporting young entrepreneurs
‐ Focus on creating economic growth through SMEs
Building Hong Kong's Innovative Eco‐system
‐ Innovation is more than R&D
‐ Hong Kong's market niche ‐‐ internationalization and the last 10% of R&D
‐ Review the Meso‐economic structure ‐‐ institutions rules and regulations
‐ Address the systemic dimension of innovation
Implementation: the "1,2,3,4,5 steps"
‐ The 1,2,3,4, 5 Steps
‐ Learning from Korea's experience: from "catch‐up" mode to "creative" mode
Next Steps: making things happen
22. 22
References
1. "Realizing Hong Kong's knowledge-based economy as part of a rising China", Gordon
McConnachie and Alan Ka-lun Lung, Paper P001(E), Eighth Annual Conference of the
Asian Studies Association of Hong Kong (ASAHK 2013)
2. “Hong Kong and the Knowledge-Based Economy: Developments and Prospects”, Alan
Ka-lun Lung, Asian Education and Development Studies, Vol. 1 Iss: 3, Emerald Group
Publishing, 2012
3. “Hong Kong’s Innovation and Technology Role in Mainland China’s 12th Five Year
Plan”, APICC Whitepaper #7, March 2011
4. “Policies and Practices for Hong Kong as a Knowledge Economy and the Proposed
Innovation and Technology Bureau”, APICC Whitepaper #8, July 2011
5. “Proposed: Guangzhou-Hong Kong Knowledge Corridor”, Samson Tam Wai-ho, China
Daily Asia Pacific Edition, 6 July 2012
6. "Oslo Manual - Guidelines for Collecting and Interpreting Innovation Data, 3rd Edition",
OECD and Eurostat, 2005
7. "OECD Reviews of Innovation Policy - Korea", OECD, 2009
8. "OECD Reviews of Innovation Policy - China", OECD, 2008
9. "Governance of Innovation Systems, Volume 1: Synthesis Report", OECD 2005
10. "R&D Policy in Israel: An Overview and Reassessment", Manuel Trajtenberg, Tel Aviv
University, February 2000
11. "Mini Country Report/Israel", Pro Inno Europe, December 2011
12. "Building an innovation economy: public policy lessons from Israel", Northwestern Law
School and Kellogg School of Management, May 2011
13. "Hands on or Hands Off? The Nature and Process of Economic Policy in Hong Kong",
Tony Latter, Hong Kong University Press, 2007
14. "Innovation Reinvented -- Six Games that Drive Growth", Miller and Cote, University of
Toronto Press, 2012
15. "Start-up Nation: The Story of Israel's Economic Miracle", by Senor and Singer,
Hachette Book Group, 2009
23. 23
About the authors
Dr. Gordon McConnachie, B.Sc., Ph.D
Dr Gordon McConnachie is the founding Chairman of the Scottish Intellectual Assets Centre
(2003- 2007) and Chief Technology Officer of Asia Pacific Intellectual Capital Centre. He is
a chemical engineer by training and he spent most of his working career with Dow Chemical
where he grew up together with the innovation and technology transfer systems of the world
as we know them today. At Dow Chemical Europe (1989 - 1999), he invented the IP and
Intellectual Assets Management System for the worldwide company together with Phil
Barnett and Gordon Petrash. The system was later modified and applied across the global
company, where Gordon transferred technologies from companies and universities into Dow
Europe which brought him into intimate contact with the EU Innovation Relay Centres (now
Enterprise Europe Network). From 1999 to 2002 Gordon directed the European Intellectual
Asset Management Services of PricewaterhouseCoopers. In 2009, 2010, 2011 and 2012
Gordon was placed on the Global IAM 250 list of leading IA Strategists, one of only a
handful of experts on the list from China and the ASEAN Nations. Dr Gordon McConnachie
can be contacted at: gmcconnachie@apicc.asia.
Mr. Alan Lung Ka-Lun
Alan Lung Ka-lun was born and educated in Hong Kong. He was also educated at the
University of Wisconsin in the USA and Wilfrid Laurier University in Canada. He chairs the
Hong Kong Democratic Foundation (www.hkdf.org), a political and public policy think tank
founded in 1989. Alan is skilled in converting his knowledge of governments and public
policies into practical steps to move forward “Knowledge Economy” initiatives. He is a
member of the Innovation and Technology Advisory Committee of the Hong Kong Trade
Development Council (HKTDC) and he has been promoting innovation and technology
practices in Hong Kong, Guangzhou and Beijing through the Asia Pacific Intellectual Capital
Centre (www.apicc.asia) (where he is Director and General Manager), since 2006. Alan Lung
Ka-Lun can be contacted at: alanlung@apicc.asia.
Mr. Sharon Gal Or
Sharon Gal Or holds a B.Sc. and a M.Sc. degree in Life Science from Tel-Aviv University.
He is a writer and an educator and he is active in facilitating businesses in Israel to reach out
and do business in Asia. Locally in Hong Kong, Sharon is the Business Development
Advisor, Israeli Chapter of the STARS Foundation, an NGO that is active in helping
commercialization of IP sourced from around the world and promoting Hong Kong’s
position as a bridge to China for companies from Israel and from around the world. He is also
the Co-chair of the Green Energy Committee at IPPF - Independent Power Producers Forum
and the founder and CEO of Idea Sign Limited, a professional service company that provides
innovative design and consultancy services to companies.
Sharon Gal Or can be contacted at: galorian1@yahoo.com