Despite advances in technology, Hong Kong's production structure ranked 58th out of 100 surveyed economies.
Hong Kong has a high potential to tap into the wealth of opportunities brought about by the shifting nature of production aptly called the Fourth Industrial Revolution but is held back its poor and small structure of production, according to the Future of Production report released by the World Economic Forum.
This means that although Hong Kong enjoys favourable drivers of production including high levels of technology & innovation, global trade & investment, resources, institutional framework amongst others, it still has a small and simple production structure.
This particularly manifested as the economy’s overall readiness grade was dragged down by its dismal score in production structure which is ranked 58th out of 100 surveyed economies with complexity at 31st and scale at one of the worst at 97th.
This comes as no surprise as manufacturing adds little value (1.3%) to Hong Kong’s GDP or roughly US$3.4m with the economy deriving most of its revenue from the services sector.
However, Hong Kong derives its vast potential from its high score in drivers of production. As it has historically placed great value in technology’s role for sustainable economic development, it clinched ninth spot in technology and innovation.
Moreover, its status as a regional financial hub has also boosted its score in global trade and investment.
It also clinched sixteenth place in human capital, eleventh for its institutional framework and sixteenth for demand environment.
The report notes that Hong Kong would do well to find the right balance across sectors in determining production priorities, such as which industry to develop, so that it can boost its score and propel its economy forward.
Hong Kong’s APAC neighbor like Japan recorded strongest production score due to its stellar performance in demand environment due to its sophisticated consumer base and large market size.
China’s manufacturing sector, which is the world’s largest, is also ranked fifth though could still improve on its complexity, energy efficiency and sustainability.
Korea also performs well across drivers of production and is particularly strong on technology and innovation however it still needs to improve on its labour force capabilities and institutional frameworks.
Singapore is buoyed by its strong institutional framework and scores high as the government moves forward with initiatives like the Smart Industry Readiness Index.
The WEF Future of Production report assesses how national industrial strategies and frameworks can keep up pace with the level of rapidly emerging technologies that are dramatically altering the production landscape.
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