The latest Smarter Digital City white paper by Google and Ipsos revealed the pace of digitisation in Hong Kong is lagging behind neighbouring cities, with slow digital adoption of local small-and-medium businesses.
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The research documented the progress of digital development in five sectors – travel, finance, retail, living and people.
Key findings reveal three areas for government policies to focus on so as to promote innovation and technology for Hong Kong to catch up the leeway: the economy, the ecosystem and the education.
A first start would be to handle the people’s perception as consumer digital engagement remains low. The research finds that only 30% of local residents considered Hong Kong a smart city despite high internet penetration, ranking it third behind Tokyo (53%) and Singapore (39%). While only 50% of local small- and medium-sized firms (SMEs) agreed that digital was a fundamental of business, less than those in Shenzhen and Guangzhou (66%).
According to Leonie Valentine, Managing Director, Sales & Operations, Google Hong Kong, it is the traditional mindset of business that has held Hong Kong back as local SMEs have refrained from embracing digital and innovation of customer experience and delivering service.
Indeed, while 46% of SMEs retails in Shenzhen and Guangzhou are engaging in e-commerce, only 17% do so in Hong Kong.
Even though only half of the SMBs interviewed see digital as a fundamental part of their business, findings show that 85% of corporates have increased digital investment this year, and 93% said they would invest more in the next two years.
The latter proves a desire from companies to engage deeper into digitisation. However, the digital talent shortage is a barrier for them to fully dive into digitally transforming their businesses.
54% of corporates considered data analytics to be an important skill for their employees, yet 70% of corporates have difficulty finding talent with data analytics skill set and the population’s perception is no better as only 14% of Hong Kong residents believed that the city is successfully developing digital talent.
Valentine commented on talents emphasizing its key role for smart city development. She said “It is critical for Hong Kong to build a strong talent pipeline, by embracing STEM education, promoting digital literacy, and providing vocational training to help the workforce get prepared for the digital economy.”
Despite the publication of the Hong Kong Smart City Blueprint by the HKSAR Government Office of Government Chief Information Officer (OGCIO) and the announcement of HK$50 billion for innovation and technology projects over the past year, only 14% of the public surveyed think the government is
significantly investing in making Hong Kong a smarter city, down one-third from 21% in 2017.
The second edition of Google Hong Kong’s Smarter Digital City Whitepaper revealed that this year’s Consumer Digital Index (CDI) scored 2.44 out of 5, up 0.09 points compared to last year. The 55 – 64 age group shows a significant uptake in digital engagement, up 0.28 points compared to 2017. As Hong Kong residents continue to use technology and embrace digital in their everyday life, new opportunities emerge for key industries including travel, finance, retail and healthcare to innovate and improve experiences through digital channels.
The whitepaper points to Hong Kong’s unique advantages, including intellectual property protection, well-established infrastructure, and free and open internet, which the government can leverage to capitalise on digital opportunities in the Greater Bay Area region.
Hong Kong residents’ have low hopes for the region’s role on the local technology and innovation industry as only 34% think it will benefit it. However, this low trust might be explained by the poor knowledge regarding the GBA initiative itself with 15% of the population considering themselves to be familiar with it.
Echoing the government’s strategy to position Hong Kong as a data and insights hub, the Google Cloud Platform region to be available in Hong Kong later this year will help businesses accelerate digital transformation, support ecosystem growth that favours innovation, and promote a smart economy in the city.