Homegrown firms have trouble accessing new markets which could open the doors for talent and suppliers.
Although the Greater Bay Area (GBA) has emerged as the undisputed location for Hong Kong firms to start their business, more than a third (36%) of entrepreneurs believe that homegrown startups are actually not well connected with businesses in the GBA hampering their growth ambitions, according to a survey by KPMG China and Alibaba Hong Kong Entrepreneurs Fund.
The Greater Bay Area is a connectivity scheme by the Chinese government to link Hong Kong, Macau and nine cities in the Mainland including Guangdong and Shenzhen into an integrated economic center.
Due to its strong positioning, it comes as no surprise that the GBA (54%) has beat Singapore (40%) and even Silicon Valley (38%) as the best business location for startups.
Despite the massive market potential, startups seeking further growth by tapping into the Mainland market are facing considerable headway which could have otherwise offered them various opportunities to access new suppliers and manpower.
Although Hong Kong brands benefit from a perception of quality in the Mainland who have often turned to the nearby SAR during public health scandals, there are also other just as viable options and markets to capture their interest.
“Other than that, the geographical advantage Hong Kong has when it comes to targeting the Chinese market does not always exist or not as much as it could,” Norma Chu, founder and CEO of startup Daydaycook said in the report.
“Creating an interlinked city cluster in southern China would not only open new markets, but also address gaps in talent and suppliers for Hong Kong start-ups,” the report added.
It is therefore in the best interest of startups to simplify the visa application process to allow business outside of the Hong Kong Science and Technology Park and Cyberport to bring in technology and research talents from the Mainland and other overseas markets, suggested KPMG.
In fact, the government is planning to fast-track the launch of the $500m Technology Talent Scheme which will admit the foreign tech talent as it recognises that attracting top talent is crucial to its smart city vision.
“Talent is essential to that future. Simply put, we need all the smart, tech-savvy people we can get if we are to create a smart city for the world,” chief executive Carrie Lam said at the Smart City Blueprint Luncheon last February.
KPMG and Alibaba's survey polled 100 entrepreneurs who have applied for the fund’s investment program and a further 300 university students who have asked to participate in its internship program.
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