As the Belt and Road Initiative spanning land and sea routes gains global momentum, Hong Kong’s role as Asia’s pre-eminent digital hub grows exponentially, supported by government policy.
Infrastructure such as roads, ports, rail and power plants, together with trade, are among the key aspects of the Belt and Road Initiative. But it is the Digital Silk Road – its virtual dimension and information highway – that is emerging as the frontrunner in Belt and Road development, particularly when one looks at the pace at which virtual technology is advancing global connectivity.
With data and information regarded as the “new oil”, digital science and technology such as trade finance, artificial intelligence (AI), cloud computing and data storage all increase Belt and Road countries’ ability to communicate across borders, reduce risk, simplify contracts, track goods and promote e-commerce and payments in real time.
Dr Lee George Lam, Convenor of the Hong Kong Trade Development Council (HKTDC) Belt and Road Committee's Digital Silk Road Working Group, outlines in an interview how government support for innovation and technology, together with the city’s physical attributes including internet connectivity (Hong Kong has one of the fastest internet speeds worldwide), and stable power supply, in addition to its strategic position in the Guangdong-Hong Kong-Macao Greater Bay Area, are adding to the growth of new creative digital solutions in Hong Kong.
Dr Lee George Lam, Digital Silk Road Working Group, HKTDC Belt and Road Committee
Reaping innovation rewards
Hong Kong’s government actively encourages innovation and technology and the development of greater digital connectivity through learning institutions and its key innovation hub, the creative digital community Cyberport.
With more than 1,300 companies and start-ups in residence, Cyberport is now the largest fintech cluster in Asia, and an established centre of excellence for digital technology, development and innovation. Cyberport’s investor network includes 100 tech funds ranging from private equity to venture capital, family offices and super angels. More recently, Lam is seeing the emergence of a new wave of younger entrepreneurs, capitalising on the growing demand for e-sport and digital entertainment. “Hong Kong is inclusive and open-minded and has all the success factors similar to the heyday of Silicon Valley for attracting talent.”
Lam says being open to attracting global talent is an important part of Cyberport’s success. “I think the success of Hong Kong depends on how well we attract the best in the world and their families to settle here. We have all the conditions to do that. Many experts have English as their working language. Hong Kong has that as well.”
To date this strategy has worked well. Cyberport is now home to a skilled workforce from close to 50 countries. This international workforce contributes unique technological expertise including cyber security skills from Israel, blockchain solutions from New York, fintech systems from London, AI and big data expertise from France and anti-hacking technologies from Russia.
Position and expertise
Lam believes Hong Kong’s worldwide reputation and free port status all add to its unique position as the best international data hub for the Belt and Road. “We are a special administrative region with a unique ‘one country, two systems’ governance framework.” He says this framework, together with Hong Kong’s common law system, provides a long list of benefits including the protection of intellectual property, privacy and commercial contract rights.
Hong Kong’s highly-regarded professional services are another reason for its digital dominance in the region. “We can attract a lot of data operators to store and manage data from here. We are the largest data centre in the region, although we don’t advertise it a lot.”
Hong Kong’s strategic position within the Greater Bay Area and the Belt and Road Initiative, together with its proximity to Shenzhen’s tech firms means it contributes to both Digital Silk Road businesses and communities along its path through blockchain, fintech, information sharing and communications technology. But he warns Hong Kong will need to continue to invest in digital systems including telecommunications towers, satellite systems and fibre optics to maintain its regional lead.
Hong Kong’s status as a free port, professional services with global expertise, digital forensic services, cloud computing facilities, e-arbitration abilities, and data security are, according to Lam, key reasons for Hong Kong’s dominance as a regional headquarters for fintech. “It takes years to build a highway but digital connectivity is faster and easier and in most case much less expensive.” he says.
For Lam, the Digital Silk Road is one filled with promise. “One estimate has it that by 2050, 80% of the world’s GDP will be in the Belt and Road region. I’d like to propose that 80% of that is actually due to the digital economy because the world is moving into digital. The Digital Silk Road is as important as the physical Silk Road and, in the future, it will be even more important,” Lam says.