The recent investment made in Hong Kong-based artificial intelligence company SenseTime Group by US mobile chip giant Qualcomm Technologies was the world’s biggest ever fundraising by an artificial intelligence startup. Announced in November, the investment was part of a Series C funding round, reported to be US$500 million. If confirmation was needed that Asia is experiencing an AI revolution this was it.
It is a revolution led by China, who have committed themselves to being a global leader in AI technology by 2030. No surprise then, that in the Asia Business Council’s Asian Index of Artificial Intelligence, which analyses how prepared eight Asian economies are for an AI-led future, it was China that led the rankings. Unfortunately, at the other end of the scale, Hong Kong fared poorly, placing only ahead of Indonesia. This does not bode well for Hong Kong.
This fact is already recognized by the Hong Kong government. In 2017, the secretary for innovation and technology announced plans to offer financial and tax incentives to companies specialising in big data, internet of things and AI. However, the pace of policy support and more importantly implementation means that as thing stand, Hong Kong is some distance behind not only China but most other Asian nations.
Perhaps strangely then, Hong Kong ranks third globally in terms of AI impact, which means that Hong Kong’s AI research is considered to be bettered in quality only by Singapore and Switzerland. However, the disconnect between the successes of published theory and industrial or commercial application is evident in the relatively low amounts of equity funding which Hong Kong’s artificial intelligence startups have attracted.
Despite the (justifiably) sensational headlines drawn by the SenseTime investment, it is true to say this is an exception not the norm. If we looked purely at startups focused on AI, China leads by far in total equity funding – c.$1.2 billion as of July 2017. Singapore ranks second. Hong Kong is actually ahead only of Indonesia in terms of AI equity funding within major Asia countries.
When looking at startup investments (especially at an early stage) most investors will tend to follow largely similar criteria. Is a problem being solved? Does the proposed solution solve the problem? Is there a large enough addressable market? Is the team capable of executing the vision? It is this last question that may cause concern for Hong Kong.
However big the opportunity in AI might be, there needs to be a pool of Data Science and Analytics (DSA) talent to grasp it. These ‘talents’ are the humans behind the AI revolution – data scientists, data analysts, mathematicians, programmers. Unfortunately, the shortage of this type of talent in the Asia-Pacific region has been identified by several reports. In fact a Gartner report in 2012 forecast the creation of 960,000 new DSA jobs in Asia-Pacific by 2015 due to increased investment in DSA, but warned that only one-third of these positions would be staffed as a result of skills shortages.
For Hong Kong, at the crucial stage of early startup investment, this skill shortage may lead to investors fearing that a great solution to a big problem in a huge market, simply won’t be created due to the inability of startups to find high quality DSA talent.
Is Artificial Intelligence part of a brighter future? Quite possibly. What’s for certain is that when it comes to AI, it’s going to take a combination of talent, policy and investment to make that bright future a reality.
The views expressed in this column are the author's own and do not necessarily reflect this publication's view, and this article is not edited by Hongkong Business. The author was not remunerated for this article.
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With over 12 years’ experience in the recruitment industry, Richard Hanson is CEO and Co-Founder of Jobable, Asia’s most advanced career platform with over a million users and incorporating machine learning and artificial intelligence.
A known figure within the talent acquisition and retention space, Hanson makes regular appearances at industry round tables and entrepreneurship events and his blogs and whitepapers have been featured in global HR publications.
Jobable launched in March 2016, with close to 200,000 job applications processed for over 2,000 employers. Jobable’s ‘special sauce’ is their machine learning recommendation engine that examines hundreds of data points to efficiently connect job seekers to the best opportunities and companies to the best talent. The company also operates in the Philippines and Singapore.
The company has raised close to US$3 million in venture funding with their most recent round led by Asian-based investors including Welight Capital, a firm founded by former Tencent executives, and Garage Capital.