Apr 06 2008
hong kong – service center par excellence?
It is still review time today, and my favorite blog post all week comes from Silicon Hutong, which is a responsive posting to an article from the China Economic Review / Business Week (re-print). I try not to reprint posts without commentary, but this one was so well done that I don’t think I need to really comment. Something I had to share with my readers (though I believe there is very little non-overlap) and also just to save for the future. It is a mixture of some facts and a lot personal experience, which is quite effective.
The post, entitled “ Selling Hong Kong” reads: (note, I have posted most but not all of it)
Hong Kong began and grew as a trade entrepot, and for many years after 1949 was a busy center for manufacturing as well. Reforming and opening of the mainland have sucked most of the manufacturing upriver and inland, and (as today’s story underscores) Hong Kong’s importance as a center of transshipment declines as its picturesque harbor is pinched by reclamation and development – not to mention rising property values, growing pollution restrictions, and the climbing cost of labor.
In spite of all of this, Hong Kong’s port will continue to prosper for a time. But to rely on the port for growth or economic vitality is growing less practical. Even the city’s major port operators are betting on investments in faraway quays and harbors for their long term prosperity. Clearly, physical logistics is not the basis on which the SAR’s leaders can or should build a vision for the future.
(Nor, for that matter, is some well-intentioned belief that the city is a great place to build online businesses – many of those industries are highly labor, power, and real-estate intensive, and the back rooms of Shenzhen, Hangzhou, Beijing, and Dalian are arguably better suited to become multimedia centers.)
More than Ports and Property
But I believe in Hong Kong, and feel that if the SAR could understand what it offers – and what it doesn’t – it need not decline to become a lesser light than Shanghai and Singapore, a path it appears to be treading.
Where Hong Kong excels is in services. It remains perhaps the easiest city in all of Asia to get a lot of stuff done in a very little time. Every time I go to Hong Kong I am amazed at how many things I can knock off my list in the space of a morning or a single day. My company is domiciled there. My lawyers, travel agent, and accountant are all there, as are my bank, my tailor, my computer store, and my dive shop. What is more, I can get to every single one of those places in a single day, with time left over for lunch and some random shopping.
It remains the best place in the region to hold meetings, attend conventions, or run training programs. Setting up – and operating – a company there is about as easy as it gets. It is simpler and faster in Hong Kong than Singapore, Beijing, Shanghai, or Tokyo to do my banking, send a parcel (or myself) anywhere on the planet, buy a mobile phone, shop for just about anything, get a suit made, watch a movie, find a wi-fi hotspot, eat a meal, rent an office, buy a CD, or find a Moleskine notebook.
Where else is there a higher density of every business craft or profession? Law firms, accounting firms, advertising agencies, investment banks, venture capitalists, and head hunters abound in such profusion that you could probably get your needs met in any given office tower in Central.
It’s the Services, Guys
If I were doing a campaign for Hong Kong, the tagline would be simple:
Hong Kong. At Your Service.
Forget real estate and shipping. If I were Donald Tsang or any of his staff, I would be giving a lot of thought to how to shift the SAR’s industrial policy and external marketing toward highlighting – and growing – Hong Kong’s role as the service entrepot of – if not Asia – certainly of Greater China.
Getting Serious about Service
To make that happen, the SAR government needs to get itself a laser-focus on becoming the place where stuff that is unnecessarily difficult to do elsewhere is utterly simple to do in Hong Kong.
That means a policy focus aimed at encouraging – even subsidizing – companies who are genuine innovators in services. You have a better way to do something for people? This is where you want to be.
The great part of all of this is that Hong Kong is already half way there. Services dominate the economy. Hong Kong’s major brands – Cathay Pacific, HSBC, A.S. Watson, Hutchinson, Shangri-La – are almost all service brands.
The greatest problem is one of positioning: Hong Kong has never articulated these strengths well. That needs to change. Now.
Otherwise the city is doomed to become a sad provincial shadow of itself, a narrow stretch of water surrounded by expensive real estate and the effluent of the Pear River estuary.
‘Nuff said.
