Innovation at a Crossroads: Hong Kong's Needed Tech Transformation

Amongst 18 "arenas of competition," four stand out as particularly promising for the city.

Hong Kong stands at a crossroads, facing a confluence of global economic shifts, geopolitical turbulence, and intensified competition from other financial and economic centres. But in the midst of these challenges, a glimmer of hope emerges – a strategic window of opportunity for the city to not just survive but to surge ahead as a new tech hub on the global stage.

There are 18 promising "arenas of competition" that could redefine global markets. These arenas span a wide array of industries, from artificial intelligence, cloud technologies, and nuclear fission to robotics, cybersecurity, and biotechnology. The economic potential is significant: a US$29t to US$48t revenue opportunity by 2040, equivalent to a substantial portion of global GDP growth.

Amongst these 18 arenas, four stand out as particularly promising for Hong Kong: industrial and consumer biotechnology, robotics, modular construction, and future air mobility.

Industrial and Consumer Biotechnology
The biotech revolution is upon us, and Hong Kong is uniquely positioned to be a future leader. With a global market expected to hit approximately US$775b by 2026, the city's strategic location at the nexus of East and West makes it an ideal launchpad for biotech startups and established players alike. From agriculture and alternative proteins to biomaterials and consumer products, the opportunities are vast. Hong Kong could become the biotech gateway to Asia, fostering a new era of innovation and economic growth.

Robotics
The robotics industry is on the cusp of a breakthrough, with projected revenues potentially reaching US$1.9t by 2040. Hong Kong's manufacturing expertise and robust research and development ecosystem provide the perfect breeding ground for robotics innovation. By nurturing local talent and attracting global leaders, the city can transform into a regional hub for robotics manufacturing and solution development. From healthcare and logistics to construction and retail, the potential applications are plentiful.

Modular Construction
Modular construction has the potential to grow into a disruptive force, offering unparalleled efficiency, productivity, and sustainability. Hong Kong, with its dense urban landscape and pressing need for innovative building solutions, is primed to lead the charge. By embracing modular construction, the city can not only transform its built environment but also position itself as a global leader in this cutting-edge technology, catering to both local and international markets.

Future Air Mobility
The future of air travel is just taking off, and Hong Kong is poised to be at the forefront. The city's congested urban environment and proximity to major regional destinations make it an ideal testing ground for electric vertical takeoff and landing aircraft and drone delivery services. By investing in this nascent industry, Hong Kong could establish itself as a global nexus for future air mobility, driving economic growth and enhancing connectivity in ways we could only imagine before.

Capitalising on Hong Kong's Unique Strengths
Hong Kong is already making waves in these four "arenas." The Hong Kong Science and Technology Park has become a magnet for leading biotech companies and research institutions, solidifying the city's status as a regional biotech hub. The Hong Kong Robotics Association is fostering collaboration between academia, industry, and government, driving advancements in robotics technology. The city's established manufacturing base and strengths in automation and design make it a natural fit for modular construction. And with its strategic location and existing aviation infrastructure, Hong Kong is well-positioned to capitalise on the burgeoning future air mobility market.

The Path to Global Competitiveness and Leadership
Hong Kong stands at the precipice of a transformative journey, poised to leverage its strengths and embrace innovation and collaboration in four key technological arenas. The city must cultivate a dynamic innovation ecosystem that encourages cross-border talent flow, data sharing, and technology integration. Collaboration between academia, industry, and government is not just beneficial – it's essential. By leveraging its unique advantages, Hong Kong can achieve global competitiveness and leadership, driving economic transformation and securing its place as a thriving metropolis in the 21st century.

The future is not just within reach; it's within Hong Kong’s grasp. The question is: Will Hong Kong seize this moment to write the great chapter of our story?

Arthur Shek, Managing Partner, Hong Kong, McKinsey & Company