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Can HK become an innovation Hub ? (Discussion)


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Can HK become an innovation Hub ?

 

Here's a stock to watch, since it has been a big internet/tech success.

And the group also has a large fund backing start-ups.

The better BABA does, the more favorable may be the environment in China & HK for start-ups.

 

BABA / Alibaba Group ... update : about $86 in early Feb. 2015

Baba_zps04477fec.gif

 

( the HKVCF - see below - was planned when BABA was higher, I suppose)

 

In the Mr Shangkong column in today's SCMP:

Georoge Chen asks:

Can funding drive innovation in HK?

 

Government investment may not be enough to encourage young technology entrepreneurs

 

"Let's talk start-ups, the hottest thing being discussed this year from Silicon Valley to Beijing"

+ The world has been inspired by the rise... and revival of internet businesses, following the bursting of the dotcom bubble

+ Cities with a global presence (like HK) want to help lead the way on the internet, and start-up front

+ So far, HK has lagged, and China has done better... Hangzhou is now the home to Alibaba; while Shenzhen hosts Ten Cent

+ In the US more than 500,000 new businesses are launched evry month, more than 11 million Americans have started something parttime, or quit their fulltime jobs to join "the enxt big thing". The passion for start-ups makes the US more dynamic

+ HK's CE, C.Y, Leung wants to spend HK$5 billion boosting local innovation. But most successful start-ups are funded privately, not by governments

 

Why are young Hongkongers reluctant to join start-ups?

Why has HK failed to standout on technological innovation? How can the city do better?

 

He invites emails to: george.chen@scmp.com

=== ===

 

(and THIS related event is soon coming up):

 

Hong Kong Venture Capital Forum

- will happen March 13, 2015 (Froday)

> see: http://hkvcf.hkvca.com.hk

 

"The HK Venture Capital and Private Equity Association (HKVCA) is proud o present its second annual Forum on Friday, March 13, 2015. The theme of the Forum this year is: "Future Technologies and Hong Kong", a reflection of recent local innovations in financial and medical technologies sectors, and the rapidly growing interest in the "Internet of Things"

=== ===

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> similar thread to this one, was started recently on Geoexpat:

https://hongkong.geoexpat.com/forum/155/thread313625.html

Some GOOD Comments have already been posted there.

 

Here's My RESPONSE to the comments on Geoexpat:

 

I agree completely with the comments.
(And I sent an email to George, suggesting he look at this thread.)

Meantime, my two cents on this topic would be:

 

+ The "incubator spaces" probably WERE property plays, but there's nothing wrong with that - since they did provide some useful spaces for your entrepreneurs to meet and set up new businesses. And they also provided a platform for people who had money to meet those who wanted it. I visited HK-Cocoon a few times in its early days, and I was pretty positive on what they were doing. I even offered to volunteer as a mentor. I have some relevant experience, but was rejected - not sure that they wanted any older expats. So I came to see it as a sort of friends-of-friends thing. Not so much open to new comers, or people with overseas experiences. That's a pity maybe.

+ For a while, I considered setting up my own space. I found a possible place to Buy and rent out for young businesses. But I was too slow, and someone else wound up buying it. In fact, this happened twice. But the operations that went into the spaces were not for start-ups, One of my friends got the idea from me. He DID buy a space, and rented to a start-up. His space was in Kwai Hing, and he has done really well with it, as an investment.

+ A key thing for HK start-ups will be building on success. Those who launch businesses and do well, can be a source of capital for new businesses coming after them. The key thing is more than capital, it is having experienced people who can act as mentors for up-and-coming new businesses.

+ In start-ups, people learn as much from failures as successes, and sometimes more. So the culture has to be forgiving of failure - and HK is not very good at that IMHO

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Is Failure good for you?: Do you need cheap space to experiment?

Hongkongers are not allowed to fail. The educational system is designed to select those who make the fewest mistakes, by not taking chances. Space is so limited, and buildings are tall, so perhaps the idea is fixed in people's minds that "there is a long way down... and little chance to bounce back" if they make a mistake - they can fall a long, long way.

Douglas Young wrote about this on the INSIGHT page of today's SCMP (pg.A13), in an article called REAL VALUE - where in he "calls for a rethink of success that recognizes the usefulness of failure... By accepting it, HK may bolster its enterepreneurship with a new spirit of daring." He criticises "the lack of protection for small local businesses." And says, "HK is no place for amateurs: One needs to be a pro to succeed here." The highest barrier to entry, and the thing that discourages experimentation is: "The high cost of space."

I say: How can you start a business in a garage, when its is only the super-wealthy, who dress and act like plutocrat bankers can afford to have a garage?

 

=== ===

( 2 )

 

Just speculating here, but I think the lack of tolerance for mistakes may also be rooted in local culture and "face" in particular. Locals may think failing at an endeavor as something to be ashamed of and hence a loss of face. Maybe even a disgraceful event. That has a powerful effect in deterring people from willing to try and stick their necks out. Locals do not accept that one can recover from failures (despite what some of them may claim) and think once you failed, you will always be a failure.

I mean, sure, experiencing failure is not something to be proud of in the West either, but people usually won't kick you while you are down. They won't necessarily hold that against you in all cases, and particularly in terms entrepreneurship, that may even be a plus in terms of gaining valuable experience.

- Cho-Man

 

(3)

You are very right about that.
I never really understood the "FACE" concept, until I got the concept, that in HK and in China, once you lose Face, it is very hard to get it back... Hence the extreme avoidance of failure.
It is so unlike America.

Maybe it is for "Face" reasons, that people are also so reluctant to talk about Downsizing here. They don't see it was creating flexibility, but rather as losing some on one's prestige.

- OTP

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(from the GeoExpat thread):

 

(Hi, everyone. I have had a nice response from George Chen of the SCMP, who has read the posts here. He says):

I just read the thread and there are indeed some interesting thoughts/debates. I will continue to explore the topic in my next columns. Meanwhile, feel free to share the SCMP.com URL in your thread. My column is usually "not behind the paywall", i.e. free to read if you click/share the link.

Cheers, George
=== ===

LINK : http://www.scmp.com/topics/mrshangkong
George Chen is the SCMP's financial editor and a Yale World Fellow. Mr. Shangkong columns appear every Monday

Let's see what he has to say in those future columns.
I think this is a very timely topic for HK now.
Keep the comments coming !

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FREE SPACE ???

 

quote_icon.png Originally Posted by shri
Just saw the thing about "Free space" @ Swire ... Excellent!

=== ===

FOCUS

We invest seed capital and time in promising scalable startups. Our team of dedicated startup experts empower founders worldwide with our strengths in marketing, strategy, and access to global industry networks from our headquarters in the heart of Asia – Hong Kong.

 

We also help startups with next round growth, further fund raising and new market expansion. Having all built a series of businesses, our team is well placed to help entrepreneurs succeed.

> http://nest.vc/

=== ===

 

NEST also offer free space, support services (like legal admin etc) and they invest into the business and provide access to their funding platform for future rounds. They seem to have a pretty good participation rate in the startup communities (at HKU, too). Again, I've just seen things online - would love to hear from someone who has been through the program.

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jack ma’s top tips for young entrepreneurs

 

IMG-20150202-WA0033-1024x576.jpgJack Ma’s recent trip to Hong Kong dovetailed perfectly with his recent $1 billion investment in the HK Young Entrepreneurs Venture Foundation. Dubbed Mr Internet in China, Jack Ma had a lot of insights to share with Hong Kong’s Internet generation. Nest’s own token millennial was in the audience, with the following key takeaways.

1. Qualifications don’t matter

Famously scoring only 1 out of 120 in a maths test as a young student, Jack Ma rejects the typical Chinese obsession with scoring top marks. Conforming to the system, he believes, leads people straight into jobs in finance and real estate – traditional jobs fostering traditional mindsets. However, it is only when one is forced to think outside the box, be it due to bad grades or a lack of interest in the conventional paths, that adventure, experimentation and innovation is found.

2. Opportunities are equal

Opportunities come to everyone in equal measure, but you need to recognise them for what they are. Ma observed that the youth these days are much more capable than he was 15 years ago. What they’re missing now is the ability to persevere despite others, and to identify opportunities in the least likely of places. Ma struggled to make sense of typical MBA curriculums that pore over the successes of others. Given the infinitely higher chance of failure, why weren’t students learning how to identify opportunities that are borne out of failures?

3. When the wind blows, even pigs can fly

But what happens when the wind stops? The pigs that weren’t meant to fly will fall. Build something that is sustainable and able to withstand external pressures.

4. Believe in the power of the individual

When asked the familiar founder questions of “when, if ever, is the right time to give up?”, Ma’s answer was refreshing. He didn’t throw out well worn phrases ‘fail fast and fail often’ (though he wouldn’t disagree). Instead, he brought up the example of the typical first round of funding for startups commonly provided by the “Three F’s” (Friends, Family and Fools). These people are often funding an individual, not the idea or the business proposition. The only differential here is the individual’s power to persevere, iterate, learn and change. Ma stressed that in order to change the world, the first thing you must do is to change yourself. Focus on the achievable and change yourself and adapt* when situations call for it.

5. The rise of Data Technology

Throughout the Q&A session with a panel of young entrepreneurs, Jack Ma was adamant in stating that Alibaba is a data company. Not e-commerce, retail, mobile payments or the countless other features that Alibaba has created, but has been built to capture, manage and use data from day one.

==

> http://nest.vc/jack-ma-top-tips/

ADAPT or die ??

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Nation of Innovation - SCMP, pg c6

A group of HK students got an inside look at Israel's creative entrepreneurial culture

 

+ Israel has only 8 million people in a area 2/3rd's the size of Taiwan

+ It has more co's listed on Nasdaq than all of Europe

+ Israel has 3,800 start-up - that's one for every 2,000 people

 

Technion in Israel organized a visit by 50 students from HK.

The trip was led by Solina Chau, of the Li Ka Shing Foundation, & Horizon Ventures.

 

+ Israelis tend to be more open to criticism than HK Chinese

+ Compulsory military training changes Israelis (more disciplined?)

+ Also teaches life skills: team work, strategic thinking, improvisation, risk-taking

+ In Israel's education system, students are taught to question

+ HK students are more comfortable, less stressed

+ Israel (like HK) has no natural resources, and no access to a huge market

 

The Govt in Israel helps: Creates Technology research centers in Universities.

Intellectual property is acknowledged and protected.

 

There are big risks too. An a culture is needed which can accept, manage, and diminsh those risks.

 

(Note: Something I rarely seen people write about is how entrepreneurs REDUCE the risks in their start-up businesses.)

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HK needs risk-takers with new ideas - SCMP

 

- by George Chen, in his MR. SHANGKONG column

 

Sky-high property prices shouldn't be an excuse for the lack of an entrepreneurial culture

 

He starts off: "Is the younger generation unwilling to take risks to start their own business these days?"

 

The traditional career path (banking, law, accounting, or whatever), does not prepare people for risk-taking. 90% of Start-ups fail, and young people in HK seem to be fixated on "safe bets." (He goes on to mention some comments in this Geoexpat thread.) : "Start-ups learn more from failure than success... and the culture has to be forgiving of failure and Hong Kong is not very good at that."

 

My Li Ka-shing has become an icon of Hk success - but "nowadays we blame high property prices for almost everything." (Q: Does the exact thing that has helped Mr Li's success, the big rise in property prices, mean that it is now impossible to follow his path. It is like the old story of someone getting to the top, and then pulling the ladder up with them.)

=== ===

 

REACTION:

We won't have many businesses started in garages or spare bedrooms, since almost no one can afford to keep a garage or spare bedroom. I suggested some years ago that Mr Li's Foundation, might finance the creation of cheap hacker-spaces spread around HK, which might allow teenagers, young adults, and others who are interested to have a cheap place to go to tinker, invent, and network. Where else are they going to do that? They can't easily find a seat in HK's crowded coffee shops, and they will be chased out of a restaurant once they have eaten their meal.

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Global Entrepreneurship Network to Highlight GEC 2015 / in Italy

 

Jonathan Ortmans @jortmans

Italy: Jan 08, 2015

GEN-Universe-chart-160.png

 

In two months, thousands of startup champions from roughly 175 countries will gather in Milan, Italy for the Global Entrepreneurship Congress. Anchored by the Start+Scale Forum and the Research+Policy Summit, the GEC includes dozens of related parallel events conducted by leading global organizations actively supporting the spread of an entrepreneurial culture. Featured throughout those sessions and events during the week-long Congress are a number of programs and initiatives emerging from the network that has driven the massive growth of Global Entrepreneurship Week over the past seven years.

 

The Global Entrepreneurship Network (GEN) represents startup community leaders, researchers, policymakers, educators, investors and of course, entrepreneurs themselves—from young dreamers to experienced founders.

 

The following GEN programs and efforts will be in the spotlight in Milan:

  • GEW Annual Meeting: The host organizations that run Global Entrepreneurship Week campaigns in 157 (and still growing) countries gather for their annual meeting each year at the GEC. It is a chance to review the successes of the previous year and collaborate around plans for the coming November.
  • Startup Open: Breezometer, an Israeli startup that is the most recent winner of the Startup Open, will be featured during the Start + Scale Forum at the GEC.
  • Global Entrepreneurship Index: Released in November during GEW, this new index measures the health of entrepreneurship ecosystems in 130 countries. The leaders responsible for compiling the Index will be on hand at the Research + Policy Summit for a masterclass to discuss how the data can be used to identify initiatives and interventions that target a country’s most critical areas--as well as share plans to expand the Index in the year ahead.
  • Global Entrepreneurship Research Network: This coalition of institutions funding research in the field are focused on developing the next generation of entrepreneurship research. Milan marks the second annual meeting held as part of the Global Entrepreneurship Congress where members share lessons and knowledge to establish open, standardized data resources.
  • Challenge Cup: This year-round startup competition takes place in 16 cities across 11 countries to identify the most promising startups solving the biggest challenges in four categories – education, energy, health and cities.
  • Global Enterprise Registration: Launched just prior to GEW 2014, this partnership with the United Nations Conference on Trade and Development provides a portal that promotes the use and improvement of business registration services for entrepreneurs worldwide. The team responsible for the portal will demonstrate i by allowing easy access to existing online systems and by facilitating the exchange of experiences and best practices among governments.
  • Creative Business Cup and Get in the Ring: These two live pitch competitions have been at the center of GEW for several years and provide a global stage for startups to prove themselves. These and other global picks will be demonstrated and discussed for those looking to compete--or introduce the competition to startups in their country.
  • Startup Nations: An 'unconference' gathering where a group of policymakers and program leaders share ideas at on what is working in their countries and explore regulatory changes and other policy ideas to promote new firm formation.
  • Global Entrepreneurship Survey: The GEN team is releasing a report on the results of its survey of more than 2,500 entrepreneurs around the world as part of Global Entrepreneurship Week. The survey report is intended to help inform future policy decisions affecting new and young firms.

2015 promises to continue the evolution of this network—driven by the communities and countries that celebrate Global Entrepreneurship Week. Other policies and programs within the Global Entrepreneurship Network will be addressed in the coming months and at the GEC. Stay tuned for additional information on the Angels Summit, Startup Experience, the Global Entrepreneurship Library, GES Youth and more.

 

The Global Entrepreneurship Congress is scheduled from March 16-20 at the Milano Congressi. Registration is open and free to all delegates.

 

> http://www.gew.co/blog/global-entrepreneurship-network-highlight-gec-2015

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Focus on HK's Four Weakest Pillars

- How real are these challenges ?

- What's missing from this analysis ?

The Global Enterpreneurship & Development Index (GEDI) measures the health of entrepreneurship in 130 countries, including Hong Kong. They use a survey into 14 different areas of skill and attitude (they call them "Pillars".) HK scored poorly, well below the US and the UK in four of those pillar areas. Overall, Hong Kong was rated as #40 out of 130 Countries. Singapore was #10, and.China was #61,

A Summary follows:
PILLAR ======== : H.K. - / China / Sing . / U.K.- / U.S.- /
==== overall score : 45.9%/ 36.4%/ 68.1%/ 72.7%/ 85.0 /
==== overall rank - : # 40 - / # 61- / # 10- / #04 - / # 01 - /

Competition -------- : : 0.11 / : 0.34 / : 0.57 / : 0.97 / : 1.00 /
Start-up Skills ------ : : 0.22 / : 0.17 / : 0.38 / : 0.60 / : 1.00 /
Tech Sector--------- : : 0.27 / : 0.23 / : 0.77 / : 0.75 / : 0.86 /
Opp'ty Perception- : : 0.30 / : 0.52 / : 0.43 / : 0.69 / : 1.00 /

== ==
What do these terms mean?:

Competition :
Percentage of the TEA* businesses started in those markets where not many businesses offer the same product
Start-up Skills :
Percentage of the 18-64 aged population claiming to posses the required knowledge/skills to start business
Tech Sector :
Percentage of the TEA businesses that are active in technology sectors (high or medium)
Opp'ty Perception :
Percentage of the 18-64 aged population recognizing good conditions to start business next 6 months in area he/she lives in

 

TEA : TEA: Total Early-stage Entrepreneurship Activity Index, surveyed co's (ie young businesses surveyed)

== ==

HK : http://thegedi.org/wp-content/uploads/2014/12/Hong-Kong.pdf

http://thegedi.org/methodology/

 

===== sidebar =====

Is the Global Entrepreneurship Index / Like GEDI ?

Research series: Global Entrepreneurship & Development Index (GEDI)

=== === PDF: 2015 Global Entrepreneurship Index === ===

 

Top 5 GEDI COUNTRIES

:# : Country--: score : GDP-- : FIPS
: 1 : U.S. ---- : 085.0 : 45,336 : 840 :
: 2 : Canada- : 081.5 : 36,067 : 000 :
: 3 : Australia : 077.6 : 35,608 : 036 :
: 4 : U.K. ----- : 072.7 : 32,514 : 826 :
: 5 : Sweden- : 071.8 : 34,926 : 752 :

===

> http://thegedi.org/countries

 

About GEDI

The Global Entrepreneurship and Development Institute is a Washington, DC-based policy development organization dedicated to expanding economic opportunities for individuals, communities, and nations. About

 

There are a number of people with Hungarian sounding names working for this outfit, and I wonder if they might me yet another institution funded by George Soros, to push for reforms which suit his personal agenda

 

Footnote:

There's a different survey that puts Switzerland first, and the USA is at #5:

http://www.weforum.org/reports/global-competitiveness-report-2014-2015

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Here are the categories ("pillars") used to compile the GEDI scores

 

I have listed them in order for Hong Kong, starting with the weakest point,

which shows what catergories might bring about the most dramatic improvements in the HK score.

 

Pillar score > and:
Percentage of total new effort for a 10 point improvement in GEDI score

 

PILLAR ======== : Hong Kong / UnitedKingd / UnitedStates /
==== score : rank : 45.9%: r-40 / 72.7%: r-04 / 85.0%: r-01 /
CATEGORY ==== : score+10pts / score+10pts :
Competition -------- : 0.11 > 40% / 0.97 > 00% / 1.00 > 00% /
Start-up Skills ------ : 0.22 > 25% / 0.60 > 15% / 1.00 > 00% /
Tech Sector--------- : 0.27 > 15% / 0.75 > 04% / 0.86 > 08% /
Opp'ty Perception- : 0.30 > 11% / 0.69 > 09% / 1.00 > 00% /

== ==
Process Innovation : 0.49 > 00% / 0.67 > 11% / 0.88 > 05% /
Cultural Support--- : 0.55 > 00% / 0.79 > 02% / 0.83 > 11% /
Networking---------- : 0.57 > 00% / 0.71 > 08% / 0.63 > 33% /
Human Capital ----- : 0.66 > 00% / 0.86 > 00% / 0.94 > 00% /
Internationalization : 0.76 > 00% / 0.63 > 14% / 0.94 > 00% /
Opp'ty Startup------ : 0.77 > 00% / 0.87 > 00% / 0.73 > 22% /
Risk Capital -------- : 0.78 > 00% / 0.64 > 13% / 1.00 > 00% /
Risk Acceptance--- : 0.81 > 00% / 0.81 > 00% / 0.88 > 05% /
High Growth -------- : 0.85 > 00% / 0.66 > 11% / 0.87 > 07% /
Product Innovation : 1.00 > 00% / 0.63 > 14% / 0.84 > 10% /
===============
= individual / instit. : 59.2%: 85.1%/ 69.8%: 89.3% / 77.9%: 92.2% /

 

Entrepreneurial success does not take place in a vacuum. Entrepreneurs exist in the context of their particular geography – be that their local, national, or even supranational economy and society.

This mix of attitudes, resources, and infrastructure is known as the entrepreneurship ‘ecosystem’. The Global Entrepreneurship Index is an annual index that measures the health of the entrepreneurship ecosystems in each of 120 countries. It then ranks the performance of these against each other. This provides a picture of how each country performs in both the domestic and international context.

The GEDI methodology collects data on the entrepreneurial attitudes, abilities and aspirations of the local population and then weights these against the prevailing social and economic ‘infrastructure’ – this includes aspects such as broadband connectivity and the transport links to external markets. This process creates 14 ‘pillars’ which GEDI uses to measure the health of the regional ecosystem.

 

 

GEDI Thinks the UK can move to number one, in as little as 5 years:

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GEDI Thinks the UK can move to number one, in as little as 5 years:

 

(1)

Can the United Kingdom be Number One?

 

The United States stands head and shoulders above of all other countries when it comes to entrepreneurship. While the United States ranks 1st on the Global Entrepreneurship Index (GEI) the United Kingdom ranks 4th. However, the United Kingdom has made important progress over the past decade moving from number 13 to number four. Moreover, it ranks number one in Europe and London ranks number 2 in European cities just behind Copenhagen. What would it take for the United Kingdom to take over the next three spots: Australia, Canada and the United States on the GEI in the next five years?

The United Kingdom would have to move up almost 12 points on the GEI to overtake the United States and five to overtake Australia. However, if it continues its ascent of the last five years it might to able to become the most innovative and entrepreneurial country in the world.

 

What is the unique strength of the United Kingdom that has allowed it to move into the first ranks of entrepreneurship? It is in our opinion the unique position of London as the ‘capital’ of Europe and one of the two most successful cities in the world. London’s leadership comes from at least three advantages: education, immigration and density. First, London is a magnet for entrepreneurial talent from all over the European Union. Almost half of Londoners were born outside the city. Second, the density of the city makes it an ideal ecosystem for high growth entrepreneurial startups to assemble resources. The more dense a region the easier it is to assemble resources for startups. Third, greater London boasts some of the finest knowledge institutions in the world with four of the top twenty in the world: Imperial College, University College London, Oxford University, and Cambridge. Neither Australia nor Canada has a London, though Toronto is an important global city.

 

So what will it take for the United Kingdom to become number one over the next five years? Looking at the United Kingdom we see that its institutions are much stronger then the individual indicators. So the focus of improving the entrepreneurial ecosystem has to focus more on people then on institutions. When we look at society’s attitudes towards entrepreneurship, individual abilities to start firms and the aspirations of entrepreneurs to create something of great value what we find is that the United Kingdom compared to the United States, Canada and Australia ranks on par with these countries in entrepreneurial abilities. So it is not a lack of abilities that will decide its future.

 

However, when we look at societies attitudes towards entrepreneurship the gap with the leaders widens. And when we look at the aspirations of U. K. entrepreneurs their aspirations are a full 20 points below the United States. Moreover, it ranks number 17 in aspirations globally well behind countries like Singapore, United Arab Emirates, Israel, France and Germany!

 

The aspirational deficit in the United Kingdom is unacceptable for a country that wants to be a global leader. The problem is that in a country where a billion pounds is viewed as a birth right by many the aspiration to create a billion dollar company does not resonate for the best and the brightest. The aspirational deficit is pervasive and tightly structures not random. The country has a deficit in product innovation, process innovation, high growth companies, internationalization and risk capital. While other countries in this neighborhood will have some strong and some week pillars in their aspirations the United Kingdom’s pillars are all bunched together as if policy is in fact stacked against scaling and creating billion dollar companies. If the United Kingdom and London can reform capital markets, increase innovation and become more global it can climb into the very top ranks in the GEI.

 

> http://thegedi.org/can-the-united-kingdom-be-number-one/

 

==

(2)

London and the REF: Excellent universities will drive the UK's rise

 

This is the second of a series on London and the UK’s potential rise to Number 1 globally for entrepreneurship.

In my last blog I asked the question, “Can the UK be Number 1?” My answer: The UK can surely surpass Australia and Canada even though it has a large aspirational deficit. The reason is that the UK has a resource that neither the number two country Canada nor the number three country Australia has—London. London has several key advantages that no other city has: knowledge, density and immigrants.

 

On December 18th, the United Kingdom released the results of the Research Excellence Framework (REF) 2014. The REF is a new system for assessing the research excellence of UK higher education institutions. The rankings list research in four categories including world leading, international excellence, recognized internationally, and recognized nationally. While no one should accept these results without reading the fine print, the results were rather impressive in light of my previous observations on London as a powerhouse.

 

The six leading universities in terms of research excellence (The schools with the highest proportion of world leading research) were: London School of Economics (LSE) 49.9%; Oxford 48.1%; Cambridge 46.8%; Imperial College London 46.4%; University College London (UCL) 42.6%; Cardiff 40.5; and King’s College London 40.2%. For the first time London has overtaken the Oxbridge domination. Not only did LSE take the first spot, but four of the top seven posts went to the City of London. This is important for London. But from the UK perspective, six of the seven are in the “golden triangle” of greater London. Cardiff is in Wales. So from a UK perspective, London is a global educational powerhouse all on its own. Need proof?

 

If we now look at the QS World University Rankings tables we see that the top schools are MIT (Boston); Imperial (London); Cambridge (Cambridge); Harvard (Boston); University College (London); Oxford (Oxford); Stanford (San Francisco); Cal Tech (San Diego); Princeton (Princeton); Yale (New Haven); Chicago (Chicago); ETH (Zurich, Switzerland) University of Pennsylvania (Philadelphia); Columbia University (New York); Johns Hopkins University (Baltimore); King’s College London (London); University of Edinburgh (Edinburgh); Lausanne (Lausanne, Switzerland); Cornell University (Utica); University of Toronto (Toronto).

 

So where does London stand globally? From the list of the top 20 universities, London has 5 of the top 20 and three out of the top five. The next city is New York that has three of the top twenty spots if we count Princeton (45 miles away) and New Haven (45 miles away). So New York City Proper has only one world class institution. No other city has more than one top university including Chicago, Toronto, San Francisco, and Los Angeles.

 

How is this connected to entrepreneurship?

The Knowledge Spillover Theory of Entrepreneurship (KSTE) tells us that cities that have more knowledge will have more entrepreneurship; the more competition the city has the less entrepreneurship but density will mitigate this effect. Finally, the fewer institutional constraints the more entrepreneurship.[1] Let’s focus on the education. I view this from positions at both LSE where I am in the Management Department and Imperial Business School where I am a visiting professor—a stone’s throw away form King’s and UCL. Oxford and Cambridge are an hour by train! LSE is the leading social science university in the world and Imperial is the world’s leading technical university. Both UCL and King’s have a very broad knowledge base.

 

What does this mean for the UK?

First and foremost, London is an educational powerhouse second to none. Second, if enough technology transfers into innovation and entrepreneurship London can pull the U.K. into the first ranks of entrepreneurship, in part because it does not suffer the aspirational deficit that the UK suffers. London with its large immigrant population has a much better aspirational ranking only second to Copenhagen and tied with Paris ( http://thegedi.org/downloads/ ) than the UK as a whole. But London still needs to improve its entrepreneurial ecosystem and its aspirational deficit to overtake Canada and Australia.

 

> http://thegedi.org/london-and-the-ref-excellent-universities-will-drive-the-uks-rise/

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Can HK learn from... HUNGARY ?

 

Entrepreneurship in an illiberal, unorthodox country: The case of Hungary

 

From its historically low 33.5 GEI score in 2008, Hungary improved significantly to 50.3 in 2011.

However, Hungary’s GEI score has been declining over the last three years to only 42.7 in 2013

 

Since the 2010 elections, Hungary has been following a unique, yet controversial and debated way of economic and political development. The Hungarian prime minister, Viktor Orbán claims that Western democracy has been failing and a strong ‘illiberal’ leadership is necessary to recover from the crisis. The ruling party, FIDESZ is aiming to strengthen the role of state and government regulation at the cost of weakening market system forces. Under the name of ‘unorthodox’ economic policy the Hungarian government has comprehensively centralized the administration, increased state ownership, levied new, selective taxes, begun to regulate utility prices heavily, and introduced discriminatory rules in many industries. At the same time education, the health system and social security support has been declining.

 

However, one of the most debated steps has been the change of the incentive structure by supporting the emergence of a new ruling elite. Amongst others, specific licenses (e.g. tobacco selling), explicit rental rights (soil rents), public and EU financed tenders, and selective orders have contributed to the rise of an oligarchic capitalism resembling Russia’s. And what about entrepreneurship? It is clear that most of the changes are against what we call the supporting entrepreneurial ecosystem. At the same time, however, the new technology boom has also reached Hungary giving a push to the emergence of many young, innovative entrepreneurial startups. This startup activity has been supported by government sponsored venture capital funds considerably alleviating the equity gap in the technology dominated high tech and high growth sectors. In addition, many other government and Hungarian National Bank initiatives have been created to improve the financing possibilities of businesses.

 

What can the Global Entrepreneurship Index (GEI) data show us about Hungary’s entrepreneurial ecosystem?

From the historical perspective, Hungary has long been in the middle of GEI rankings. From its historically low 33.5 GEI score in 2008, Hungary improved significantly to 50.3 in 2011. However, Hungary’s GEI score has been declining over the last three years to only 42.7 in 2013. At the same time, other EU member Central and Eastern European countries improved their entrepreneurial position. Not only the Baltic states but Poland, Romania and Bulgaria were also ahead of Hungary according to the latest GEI 2015 report.

 

Examining further the Hungarian entrepreneurial ecosystem in sub-index level it is clear that Entrepreneurial Attitudes are the lowest out of the three sub-indices followed by Entrepreneurial Abilities. Entrepreneurial Aspirations are the best out of the three sub-indices. Having a closer look at the fourteen pillars, three bottlenecks can be identified: Opportunity perception has always been Hungary’s worst pillar but Product innovation and Competition are also well below averages. In somewhat varying degree, these three pillars have been amongst the lowest pillars over the whole 2006-2013 time period.

 

An interesting case is the Risk capital pillar: From being a serious problematic factor in 2006 it improved by 2010 significantly, especially due to increased informal investment activity. However, while informal investment improved, small business lending declined considerably. So, the informal investment improvement alone may not be a positive sign for better finance opportunities. In 2013, Finance became problematic again by being the forth weakest pillar. However, focusing only on the improvement of financing options would not help Hungary improve its entrepreneurship ecosystem, since the country faces three other, even more binding bottlenecks: opportunity perception, innovation and competition.

 

Thus, the Hungarian entrepreneurial ecosystem showed several changes over the 2006-2013 time period. After an impressive improvement, GEI scores declined over the 2011-2013 time period. While the government elected in 2010 introduced many new rules and practices that were against the market economy principle and entrepreneurship, GEI data did not show a major collapse of the Hungarian entrepreneurial ecosystem. However, it seems that a slow weakening could continue, especially if the present trend of private and individual initiations are further discouraged and state intervention is increased. Besides focusing mostly on improving the financing possibilities, Hungarian economic policy should pay more attention to other even more binding problems in opportunity perception, innovation and competition.

==

> http://thegedi.org/e...ase-of-hungary/

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Philippines and Thailand... added to the comparison:

 

:A Summary follows:
PILLAR ======== : H.K. - / China / Sing . / Thai.- / Phil.- / U.K.- / U.S.- /
==== overall score : 45.9%/ 36.4%/ 68.1%/ 32.1%/ 27.7%/ 72.7%/ 85.0 /
===== overall rank : # 40 - / # 61- / # 10 - / #68 - / #95 - / #04 - / # 01 - /

Competition -------- : : 0.11 / : 0.34 / : 0.57 / : 0.38 / : 0.43 / : 0.97 / : 1.00 /
Start-up Skills ------ : : 0.22 / : 0.17 / : 0.38 / : 0.49 / : 0.40 / : 0.60 / : 1.00 /
Tech Sector--------- : : 0.27 / : 0.23 / : 0.77 / : 0.23 / : 0.08 / : 0.75 / : 0.86 /
Opp'ty Perception- : : 0.30 / : 0.52 / : 0.43 / : 0.35 / : 0.48 / : 0.69 / : 1.00 /
===== overall rank : # 40 - / # 61- / # 10 - / #68 - / # 95 - / #04 - / # 01 - /

--> http://thegedi.org/countries

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Can HK help start-ups to scale up?

Low taxes and strong rule of law provide the perfect environment for new businesses to Grow

(notes from Mr Shangdong column, SCMP Feb. 23, 2015, pg. B12)

 

+ many HK-based VC's complain they cannot find good co's to invest in

+ they do not see HK co's being able to grow to sufficient size (to make a good profit)

> see: facebook.com/mrshangkong

 

Question: Can HK nutured co's really "grow into China"?

Or will they be stopped (by their potential Chinese competitors)?

How can you be "close to the customer" when you aren't?

===

 

We hunt Unicorns but also need to value Zebras

(notes from FT article dated Feb. 25, 2015)

A "unicorn" is a rare co. that creates US$1billion in value

 

"Every entrepreneur who applies to accelerators such as Y Combinator or Seedcamp wants to build the next unicorn"

But smaller start-ups are the necessity of the millions who "are looking to take control of their own economic future by being self-employed or starting their own small business."

 

"Policy makers should focus less on how to create a homegrown Google, and more on how to support the seeming prosaic yet crucial ambitions of the tens of millions of founders - let's call them zebras - who just want to may the rent, go on holiday once in a while and have reliable healthcare, and send their kids to a decent school."

 

Big New co's like: Apple (thru its Aps Store), and Etsy, Airbnb, and Uber...

Are enabling smaller co's to start, by growing up in the changing environment they are creating.

 

Etsy: Support, global reach, economies of scale

Airbnb: promotion, ability to generate revenues from property

Uber: flexible hours, less need for (expensive) cars

 

Policy makers need to be careful not to crush the unexpected opportunities that innovation provides

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Hong Kong Moving Forward - SCMP series

 

In real Hunger Games, HK Loses - Mar. 2, 2015, pg. A4

Hong Kong co's lack the hunger... to conquer the world

 

The lack of ambition is disappointing, says Dr Roy Chung Chi-ping

+ HK's Main advantage : a global financial centre

+ But mainland co's are more eager to compete globally

+ HK co's reluctant to make int'l acquisitions, they "lack vision"

+ HK's growth has slowed to 2.3%, down from 4.5% - 10 year average

 

Li Ka-shing's Hutchinson Whampoa is best example of HK Global focus

+ Financial services in Israel and France

+ Telecoms in Britain

+ Operates ports in HK and on mainland

+ Supplies energy in Canada and the US

+ Global reach stretches over 50 countries

 

Why so few HK going global?

+ Too easily satisfied (with the HK market), or

+ They are afraid of losing money (elsewhere)

 

Pearl River cities have their own advantages:

+ HK : Financial services

+ Macau : MICE (meetings, incentives, conferences, exhibitions)

+ Shenzhen, Zuhai : great ports, good education, work-force

 

Why not more of a Regional Focus ??

+ Four cities have a combined GDP : over $600bn (= Argentina)

+ Special visas still required for travel across the border

+ HK qualifications are often not recognized in China

 

Opportunities:

+ Labor Shortages in hospitality, catering & engineering

+ HK could excel in creating engineers, like aircraft engineers

+ Youth could "show more passion", more positive morale

+ Govt has a role to play in lifting morale, education, etc

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HK's Start-ups that "get away"... and the "Missing Rungs"

 

In George Chen's Mr. Shangkong column, he talks about:

 

DJI, Dajiang Innovations, "the world's largest supplier of civilian drones", now headquartered in Shenzhen. The founder and CEO, Frank Wang Tao, graduated in 2006 from HK-UST, and had been keen to set up his start-up in HK.

 

He ran into problems:

+ Lack of funding (for start-ups)

+ Lack of govt policy support, and

+ "Other operational issues in the city"

==

 

I would be interested to hear more about the "other operational issues",

but this may be a good time to mention:

 

THE MISSING RUNGS in the Finance Ladder.

 

What's that?

All start-ups need different rounds of financing to get to big size.

 

+ Friends and family money : may be (nearly) as available in HK, as in most places. I do not think HK entrepreneurs have less persuasion skills, or less wealthy F&F than entrepreneurs elsewhere. But the "high cost of space" may make the start-ups more expensive. And potential start-ups are less likely to have spare space or equipment in their spare rooms or garages (if they even have a garage.)

 

+ A major global financial center : such as HK is, can readily finance large, profitable and growing companies.

 

But how many HK start-ups make it to the SIZE where they have HK$5-10 million needed just for the fees etc. to go public on the HK stock exchange?

 

The "Rungs" in between these two extremes seem to be scarce or missing in HK.

 

How easy is it to get second round money, and the GEM market, where small entrepreneurial co's might theoretically be able to raise money, does not seem to be very cheap or easy to access.

 

So the sad truth is, many first-stage start-ups may be launched and die "on the vine" unable to get the subsequent money that they need.

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AGENDA:
What are HK's Advantages, How to build Innovative and sustainable start-ups around them.

Starting point (let's not be negative, but let's be realistic)
Challenges - as identified by the GEDI surveyors
+ Competition ------ : : 11% of best country
+ Start-up Skills ---- : : 22%
+ Tech Sector------- : : 27%
+ Opp'ty Perception : : 30%
Other challenges:
+ "Missing rungs" : a big gap from F&Family to a HK listing
+ Little cheap space for experimentation

What is Great about HK :
+ One of the Top financial centers in the world
+ Good universities, esp. for Law, Accounting, & Finance
+ A stable legal base from which to address China & the world
+ HK Govt is making a move to back innovation
+ Many visitor's willing to buy luxury brands

 

Top Pillars in the Survey:
+ Risk Capital -------- : : 78%
+ Risk Acceptance -- : : 81%
+ High Growth -------- : : 85%
+ Product Innovation : :100%

 

An article in the SCMP looked at the Top "product innovation" score.

What it really means is:

HK is quick to buy and adopt things like new mobile phones and phone aps.

It does not mean that HK MAKES the innovations. So we are good first customers of certain

innovations. I really wonder how much of that score comes to HK, because mainlanders

come to HK to buy new tech products at a cheaper price than they can find at home.

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(Related MEET-UP Groups):

 

Thirsty Thursdays HK

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Whether you're creating a startup, a new app, or a fashion brand - this get together is for you to meet others doing similar things. Exchange stories, swap contacts, make new introductions. What the MeetUp is About It is an open event for creative freelancers, designers, photographers, programmers, and entrepreneurs to get together at one of the Hive Hong Kong spaces.
* Who should join. Any entrepreneur... [read more]
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IS THIS THE SECRET to one of HK's best areas for Innovation ??

How China Is About to Flip from Trade Exports to Trade Services

By JC Collins

The Made In China label became a symbol of economic production lost in the western world alongside the rise of cheap labor and goods from the emerging economies. The cultural meme of “everything made in China” became common and could be heard at any given moment, anywhere in the developed world.
Whole industries and business models were built around the economic methodology of exporting cheap goods. Such as numerous chains of dollar stores, and brand name clothing outlets, which manufactured products in the Chinese provinces with the lowest labor costs, and then sold the goods at inflated prices to the developed world.


China now has the largest economy on Earth, and the monetary structure which made the USD the center of the solar system is shifting towards a multilateral framework. The Chinese currency, renminbi (RMB), or otherwise yuan, which is the unit of measurement, (such as the relationship between the British sterling and its unit of measurement the pound), will soon no longer be taking a subservient position against the American dollar.
==
> more: The Redback Revolution | philosophyofmetrics

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  • 2 weeks later...

UPDATE : On the HK Innovation Group: March 11th Meeting

 

We had a nice Brainstorming session last week

 

There were six of us, with backgrounds in Venture Capital, Private Equity, Incubation,

Entrepreneurship education, Mining investing, who are also involved in actual start-ups.

 

We discussed the challenges and advantages of doing business in HK. And came to the conclusion that the HK govt can do more to encourage innovation, but the main job falls to entrepreneurs themselves. We need to find ways to cope with expensive space, a risk aversion towards non-conventional careers, and a small market in HK, with barriers that do not make it easy to "jump the fence", and expand a business into China, or globally. Areas to focus upon might be: luxury goods, branded and high tech products where HK's small market size is doubled or tripled or more by purchasing power of mainland visitors. New businesses where HK has special needs and can act as a decent test-bed for later expansion elsewhere. And maybe medical products and financial services where HK's strong legal protections and credibility give it a natural advantage over mainland companies.

 

Areas where HK can improve, include certain areas of education : engineering, medical, and online marketing of goods. HK should also be looking for ways of "filling in" the missing rungs on the "financing ladder", and in particular the weak funding pools between the start-up and early stage investing, and (the very expensive) full-blown HK listing. At present, how do early stage investors "harvest" a profit?

 

We would like to meet again, perhaps expanding to a larger group - 8 can be easily accommodated, and perhaps at least 10-12 in the present venue. The next meeting might be in the second half of April.

 

After the meeting, I thought that some areas of potential focus next time might be:

+ The larger cycle of start-ups in HK, and how our present stage of the cycle can be analyzed to find better opportunities, and generate higher returns

+ Specific areas of potential opportunity, such as: phones Aps (how to improve the odds), a tweak to the crowd-funding model, Bitcoin innovations, environmental services to clean up the air quality in the Pearl River area... etc.

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HK co's want access to this market someday... But we know how this story will end

 

Investors Jump aboard tech start-ups in China / WSJ, Mar. 13-15, 2015, pg.1

 

Technology start-ups in China are raising cash at a record pace from private investors, prompting concern about potential overvaluation

 

+ Chinese tech co's raised $5 bn in private deals in the 2nd half of 2014, compare d with $700mn in the same period, a year earlier. With $1.1 bn for Xiaomi Corp, being the biggest single fund-raising, valuing the Beijing based smartphone maker at $46 billion, making it the world's most valuable tech start-up

 

+ Latest hot-deal: $800mn+ for Shanghai-based Dianping, which is similar to Yelp, and this round values Dianping at around $4bn, twice the value of a year earlier, and more that publicly quoted Yelp, at $3.4 bn

 

YELP ... update

YELP_zpsuujvdplh.gif

 

+ It's chief Chinese rival, Meityuan raised $700m in January

 

+ These co's haven't yet figured out how to generate revenue consistently, and investors are using optimistic yardsticks, like "user numbers" and "gross merchandise volume" to value them. (At some point, profits will matter, and if they are not massive, the valuation will collapse)

 

+ The herd instinct is in full bloom, as investors "seek to associate themselves with high profile investments"

 

Some investors are concerned about valuations, and are balking at new investments.

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Is Too much time "wasted" on Business Plans? ...

& Not enough time is spent of Experimentation

 

Perhaps most business plans are written to soon, and a Start-up needs

a robust "experimentation" phase before a final plan is written.

We also need to TEST "our core ideas about how customers behave"

 

This video nails it:

Our approach to innovation is dead wrong | Diana Kander | TEDxKC

Published on 27 Aug 2014

This talk was given at a local TEDx event, produced independently of the TED Conferences. In the past decade, we've seen an explosion in the number of business incubators, startup accelerators and entrepreneurial training programs. But Kander argues all of these programs share an enormous fatal flaw. Diana's talk challenges our thinking about entrepreneurship and presents a new approach for startups and corporations alike.

 

Diana Kander entered America as an eight-year old refugee of the Soviet Union. By the time she was an American citizen, she had perfected her skills as a capitalist – selling flea market goods to grade school classmates at a markup.

 

Entrepreneurs cannot be "fortune tellers who read the future", it is better to be:

"Detectives who use facts to back up assertions" about how products and customers behave.

WE NEED PROOF.

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Premature optimism?

 

City at "tipping point" as hub for start-ups , SCMP, pg. A3

Post Game Changers forum hears about efforts to lure innovative firms

 

+ HK is growing as an innovation hub, "despite competition from Singapore, Tokyo, and the mainland"

+ Funding and support for start-ups have improved markedly

+ The HK govt is doing more (than previously), with measures to help the 320,000 SME's in the city

+ In 2010, there were just three incubator and co-workspace locations in HK. Now there are 35 (as of last year), with 1,065 registered start-ups and 2,381 employees

+ Raising money at the earliest stage is now very possible

+ One cautionary comment came from Outblaze CEO, Yat Siu, who said that HK's educational system needs a revamp, because it was "still turning out bureaucrats"

=== ===

 

But what next?

Will these co's get the stage-2 (and beyond) Funding that they may need to reach Cash Flow positive?

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