Crouching tigers, hidden dragons - Center for Entrepreneurship - CUHK

Apr 15, 2015 - stakeholder groups, such as co-working spaces, business .... facilitating the development of startups in Hong Kong. ..... IP applications.
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Eight action plans for invigorating Hong Kong’s startups & awakening local innovation

Drawing by Peter Dingle

Marta K. Dowejko & Kevin Au Center for Entrepreneurship, The Chinese University of Hong Kong

Crouching Tigers, Hidden Dragons

Recent years saw a tremendous increase in activities that aim to foster entrepreneurial spirit of Hong Kong. Many new stakeholder groups, such as co-working spaces, business angel groups, startup incubators, or crowd-funding platforms, have embraced their roles in nurturing local startups. Universities and government bodies have revamped their programs as well and have put more emphasis on knowledge and innovation transfer activities to encourage new cohorts of entrepreneurs to enter the scene. Yet, Hong Kong is still struggling to overcome, what many locals call, the “Values of Central”. Getting rich quickly, investing solely with own benefit in mind, or focusing on maximizing the profit, these are the attitudes that contribute to the short-term outlook driving many business and developmental activities in Hong Kong. Not surprisingly, “Values of Central” put a mental blockage and create barriers to the development of a more vibrant and diverse entrepreneurial scene, which is often far from being upscale and resource-rich.

Local dragons, or fast-growing and insatiable startups with an appetite for the worldwide market, remain hidden from the public eye. Local tigers, or innovative and agile startups capable of turning their industries upside down, are crouching, waiting for the perfect moment to overrule the short-term mentality of their peers and local stakeholders. The efforts to revive the entrepreneurship scene of Hong Kong we are currently observing are the first step forward towards stimulating the dynamism, open mind, and community spirit in local society. They are the first step towards giving wings to our dragons and encouraging our tigers to spring into their first big jump. All they need is our encouragement and help. In return, the development of as little as two percent of newly registered Hong Kong businesses per year would impact local economy in the next 4 years by:  Introducing 11,480 stronger high-potential startups into the economy, which currently accounts for 3.6% of all companies with less than 10 employees;

 Creating over 338,800 new jobs locally, which accounts for 41.5% of current employment in firms with less than 10 employees;

 Increasing Hong Kong’s GDP by additional 0.24%, which accounts for 1.02% of GDP currently created by companies with less than 10 employees;

 Filing 7,800 new IP applications for patents, trademarks or designs. In this report, we have devised eight action plans to address systematic challenges to strengthening local entrepreneurship. All recommendations are designed to create positive change in public acceptance, social capital, human capital, and organization of the startup ecology. Together, they constitute the “Wheel of Change” framework, formulated to address the development needs of Hong Kong’s startup ecosystem. The following action plans are offered:

Crouching Tigers, Hidden Dragons Awaken the dormant entrepreneurial spirit Battle the short-term mentality Give back to the community Encourage synergies in the startup ecosystem Build on an excellent infrastructure Refine the administrative rigor Relay the creative spark Ignite the self-propelling cycle of innovation

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We discuss each of the action plans below.

Hong Kong’s dormant entrepreneurial spirit is the result of the inculcated risk-aversion, good economic conditions, and an overbearing peer pressure from the friends and family of potential entrepreneurs against launching own businesses. The entrepreneurial spirit of Hong Kong could be brought back to life through a more intensive engagement from the media, co-working spaces, and the entrepreneurial community. Short-term mentality of local population also constitutes