According to findings revealed today from Google and the Chinese University of Hong Kong (CUHK) Center for Entrepreneurship’s new study, Hong Kong’s startup ecosystem has grown by almost 300% since 2009, with significant growth in physical hubs, startup accelerators and incubators, funding providers, and university support. However, in contrast with the city’s business-friendly policies and growing startup ecosystem, Hong Kong’s overall entrepreneurial spirit remains low as local entrepreneurs face pressure from societal values and experience challenges in securing seed capital from local financial resources.
Years of economic prosperity has resulted in a high risk-averse society, leading to younger generations opting for safer career options encouraged by parents. Social antipathy in Hong Kong to embark on an atypical career path is also strongly perpetuated by friends in addition to family. The study noted that pressure from family and friends of entrepreneurs who decided to delay their plans increased 39% and 436% respectively after entrepreneurs enrolled in startup-related programs.
In tandem with the social pressure aspiring entrepreneurs face from family and friends, they also have few options for early investment – 88% of entrepreneurs stated their major source of seed capital as self-funding. Despite an abundance of financial resources given Hong Kong’s status as a global financial hub, professional investors are not contributing to local startups because of various reasons, such as Hong Kong’s small market size, a lack of strong business ideas and legal issues that prevent investment opportunities. In consequence, 64% of experts stated the most important limitation for Hong Kong entrepreneurs is inadequate accessibility to financial resources.
Nevertheless, experts note that the future is bright for reviving the city’s entrepreneurial spirit, as major institutional players continue to accelerate investment and involvement in the city’s startup environment. In addition, knowledge providers from the private sector and universities are becoming more involved in offering programs and trainings tailored to meet the needs of entrepreneurs.
Dominic Allon, Managing Director of Google Hong Kong, said, “There is still much to be done to build a better ecosystem for local youngsters and entrepreneurs. Through the EYE Program, we want to address the challenges entrepreneurs face by inspiring them with a positive mindset, empowering them with multidisciplinary skills, and providing valuable networking opportunities. We are delighted to see how the EYE Program has taken off thus far, and hope our commitment will push forward the ecosystem and industry partners to turn Hong Kong into a digital hub for entrepreneurs.”
Professor Kevin Au, Director of CUHK Center for Entrepreneurship, explains, “If we were to describe Hong Kong’s entrepreneurial ecosystem with startup theory, we would conclude that it has performed a mostly successful commercialization and is now in its growth stage. Hong Kong is waking up, as one of our experts said, and it is doing it with its well-known dynamism and drive. What’s the next step? Initiatives like the EYE Program are making a sizeable contribution to advancing Hong Kong’s overall startup community, and we encourage more participation from the broader society to make an even bigger impact.”
The final report, available in November, will include a detailed analysis of trends, challenges and opportunities, as well as recommendations for Hong Kong becoming the hub for entrepreneurs.
A snapshot of key findings from the EYE Program Entrepreneurship Ecosystem of Hong Kong Interim Report includes:
A typical Hong Kong entrepreneur
Societal factors are preventing entrepreneurs from making the leap
Challenges in obtaining early-stage investment and seed capital
The future is bright
The EYE Program Entrepreneurship Ecosystem of Hong Kong Interim Report is a comprehensive study from over 400 sources, including survey responses from 612 young entrepreneurs, interviews from a panel of 12 local experts, analysis from international databases and reports, and social networks assessing the viability of the local entrepreneurship ecosystem. The goal is to identify the growth and challenges in Hong Kong’s startup ecosystem, and to generate enthusiasm and support for aspiring entrepreneurs.
The press release is issued by Google.