SCED's Speech at ACCA Annual Conference 2015 (English only)
Following is the speech by the Secretary for Commerce and Economic Development, Mr Gregory So, at the ACCA Annual Conference 2015 today (May 16) :
Mr (Fergus) Wong (ACCA Hong Kong, Chairman), distinguished guests, ladies and gentlemen,
Thanks for being here on a Saturday morning. Good morning, everyone! Well, I suppose some of you are thinking that it would have been a good morning if you were still in bed rather than listening to me now. Perhaps I should just try a typical government speech that would surely put you right back to sleep...
On second thought, since you are here already, we might as well make this day count. Let's talk about something interesting. Actually, today's theme "Corporate Entrepreneurship" happens to be a topic that I am very passionate about. I am truly glad to be here to share my views with you all.
To get started, let me first tell you a rather inspiring story: During China's Warring States Period, the real power lied in the hands of feudal lords, people of superior status in the royal family. Among these, the most eminent were known as the Four Princes of the Warring States Period: Lord Pingyuan of Zhao, Lord Xinling of Wei, Lord Chunshen of Chu and Lord Mengchang of Qi.
It was customary for these lords to surround themselves with talented individuals. They invited such people of great wisdom and ability to be lodgers in their homes. For example, Lord Mengchang became known as "the one with three thousand lodgers". A couple of these lodgers later on repaid Mengchang's hospitality by helping him get through many difficult and even life-threatening challenges, and in the process, helped Mengchang became the leader and the most powerful of the Four Princes.
Why am I telling you this story? Because this is the kind of "Corporate Entrepreneurship" that I want to convey to you all today. Corporate entrepreneurship is really a spectrum. On one end of the spectrum, we have intra-preneurship, meaning innovation derived internally from the current employees, the process of which is more controlled but typically slower. On the other end of the spectrum, we have exo-preneurship, externally sourced innovation through subcontracting for example, the process of which is speedier but could be chaotic.
Somewhere in between, we have this Mengchang style of entrepreneurship, which has the best of both worlds of intra-preneurship and exo-preneurship. And this happened some 2 300 years ago. We should all marvel at the wisdom of our ancestors.
Fast forward to today, it seems like history is repeating itself. Just like the four princes constantly competing with each other to attract the best lodgers, in today's world, we are seeing established corporations going above and beyond to get the best talents, or startups, and incubate them in their facilities. For example, major consumer brands such as P&G, Unilever and Mondelez are spearheading the new incubation model, which gives startups funding, support and sometimes access to in-house laboratory facilities. Google has similar aspirations. With their famous "20% time" rule, Google requires their employees to spend one day a week on side projects to encourage innovation.
Want some local examples? AIA and Nest have a 12-week "AIA Accelerator" programme for startups; Swire Properties has a six-month "blueprint" programme in its Taikoo Place office premises; and Google is in partnership with The Chinese University of Hong Kong to create an incubation programme for startups. These are some of the new initiatives from the private sector other than the publicly-funded incubation programmes of Cyberport and Hong Kong Science Park. And I haven't even mentioned the co-work spaces, the number of which increased significantly over the past couple of years, from just three in 2010 to 42 today.
So, why are the big companies interested in "lodging" startups? Because the major brands are constantly looking for ways to enhance innovation and creativity to stay ahead of the competition, just like Prince Mengchang wanted to stay ahead of the other feudal lords. Many startups boldly apply new technologies, information technology in particular, disrupting the traditional modes of operation. They translate state-of-the-art technologies into competitive products and services that change consumption patterns and open up new markets. By supporting startups which have the entrepreneurial passion to turn innovative and creative ideas into thriving businesses, the big boys may themselves become a powerful innovative force in our economy and stay ahead of the curve.
Since I am speaking to an audience from the financial sector today, let me use financial technology, or FinTech, as a case study.
FinTech covers a wide variety of products and services for the financial services sector, such as mobile banking, personal finance, capital markets, mobile payment and data analytics. FinTech may be used to identify risks, fight financial fraud, visualise market trends as well as identify growth opportunities. With FinTech, new innovative business models, new products and services can also be developed to transform audit, accounting and finance.
FinTech is actually gaining substantial traction here in Hong Kong because we are endowed with a sound legal framework, an effective and clean government, and, as you all may attest to it, we have an efficient accounting and professional support services. We have the safest, most efficient and sophisticated financial infrastructure to support high frequency and large volume financial transactions.
Let me give you two examples of Hong Kong-based FinTech startups. One is "8 Securities", which provides a trading portal giving customers access to over 15 000 global stocks and funds, market information and a private investor community. Another example is DemystData, which uses big data analytics to help financial institutions make better lending decisions. These startups have successfully applied FinTech to offer innovative services to customers.
Established financial firms are increasingly turning to FinTech startups for solutions to deal with new regulatory requirements, security concerns, big data analytics and changing customer demands. Why? Because it is indeed a win-win scenario for both parties - By partnering with financial institutions, startups with brilliant ideas can have easier access to a vast number of risk-taking investors. Financial institutions can also advance their competitive position and cut time to market by adopting innovative concepts and game-changing products developed by startups.
It has become quite clear that startups are the breakthrough in business growth. I encourage you to look to and work with startups. Why not recruit promising startups, and let them innovate from within the organisation. Help them, help you. You want to stay competitive? Get the competitive edge from startups, which may surprise you with their out-of-the box thinking. Want to grow your business exponentially, not just to sustain it? Do the extraordinary and change your business model, by tapping the rich pool of startups.
And to ensure that startups will continue to blossom in Hong Kong, the Government has several initiatives. Specific to the financial sector, we will set up a steering group to study the development of FinTech in Hong Kong. We will also launch e-cheque by the end of the year to enable users to securely make cheque payments and receive cheques through internet banking, thereby saving time, cutting cost, and at the same time ensuring data security.
To ignite business innovation, we have been encouraging the sharing of government data for innovative applications. Starting this year, we have opened to the general public all Public Sector Information (PSI) in digital format for free. And as the number of startups grows, financing needs increase as well. We have launched a pilot scheme in the Hong Kong Science Park, which is a HK$50 million corporate venture fund for co-investment, on a matching basis with private funds.
Also, our InvestHK has launched a large promotion campaign known as StartmeupHK Venture Programme since 2013 to promote Hong Kong's advantages as a leading global hub for startups. The campaign has attracted innovative startups with potential to the city, and brought Hong Kong based enterprises to the attention of many international angel and venture capital investors. All in all, the Government will continue to collaborate closely with the industry to develop Hong Kong into a hub for startups.
Ladies and gentlemen, innovation is re-shaping consumer lifestyles, work habits and business activities in a revolutionary way. Case in point, I am standing here talking to you all with a clipmic, because I want to be innovative. I believe the Government needs to connect with audience much better, and standing behind the podium simply will not get the job done. This act of mine, to certain extent, is a form of corporate entrepreneurship. Hopefully, I may add value to my big corporation.
Ends/Saturday, May 16, 2015
Issued at HKT 12:22