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Start-up Ecosystem in Hong Kong – The Factors for the Success of Start-ups
Hong Kong’s start-up ecosystem is growing fast and has over 3,000 start-ups which employ over 12,400 employees across 92 co-working spaces, incubators, and accelerators as of 2019. The bustling island city-state attracts talents around the world and start-up founders are from multi-cultural backgrounds.
Hong Kong: A Successful Start-up Ecosystem
It is estimated that Hong Kong has the 5th fastest growing start-up ecosystem in the world with a calculated start-up valuation of more than US $15 billion. The 2019 Global Innovation Index also listed Hong Kong as the third most innovative location in South-east Asia, East Asia and Oceania.
The city boasts eight home-grown unicorns (start-up companies that are valued over $1 billion):
- GoGoVan (raised US$250 million)
- Klook (raised US$200 million)
- Lalamove (raised US$100 million)
- Sensetime (raised US $1 billion)
- AirWallex (raised US$202 million)
- BitMEX (trading history of over US$34 billion worth of Bitcoin since its launch)
- The TNG FinTech Group (raised US$115 million)
- WeLab (raised US$425 million)
Reasons for Success
There have been various factors viewed as necessary for the success of start-ups:
Start-ups face a challenging time during the early stages of growth and require capital and support to survive past the initial period. It is therefore common for start-ups to rely on external funding and initiatives. The Hong Kong government has provided extensive support over the years and start-ups are provided with financial support through initiatives such as InvestHK and StartmeupHK.
Start-ups are known to be rebellious and require a degree of flexibility in regulations in order to succeed. Too much red tape and rigid regulations may stifle start-ups and prevent them from scaling well. Hong Kong’s unique and progressive regulations have allowed for a better business environment for start-ups to survive in.
Hong Kong is home to many skilled talents of whom are needed for start-ups to succeed. It also attracts international talents from a wide range of educational backgrounds and that add to a talent pool of varied experience levels and skills. Start-ups can therefore find and recruit the necessary talents they need to support their goals.
Although Hong Kong itself has a estimated market population of 7.4 million people, it is located strategically in Asia and has special access to China’s market of more than 1.4 billion people. Start-ups can thus make use of their position in these markets and grow quickly if they successfully tap into consumer demands.
A business culture of hard-work, passion, and boldness is required for start-ups to succeed due to the level of risk and reward involved. Hong Kong can thus be seen as having the right business culture which draws strengths from both Western and Eastern influence to create an advantageous start-up ecosystem.
Hong Kong’s start-up ecosystem is still growing and has immense potential. It will be exciting to see how many more innovative start-up companies will emerge in the next few decades and to see the technological benefits that they will bring.