Distinguished guests, ladies and gentlemen, I am honored to be here today, and I would like to spend the next 5-10 minutes to share with you my thoughts on how Hong Kong can create its own innovative economy, and the role of science and technology education in this pursuit.

There has been a noticeable recent chorus in HK to promote innovation & technology. We have a relatively new Innovation & Technology Bureau in the government. Our new CE has announced major components in her budget designated for I&T. The Chinese government in Beijing has recently instituted a new policy to allow funds to be allocated to support key research institutes in HK. All of us in HK who work in the I&T sector are of course very happy to welcome this new trend.

But while this is a relatively new phenomenon in HK, the importance of science and technology as an engine for economic growth, and betterment of human life, is not new. Throughout history, [from the invention of steam engines which augments human labor, to the discovery of electricity and its wide utilization, the invention of automobiles and airplanes and their impact of human mobility, to the advent of computers and the internet which we cannot live without, and finally to the still developing “new shared economy” using AI,] I&T has repeatedly created new economies and transformed our lives. And the pace of change has only increased! There is nothing better to illustrate this trend by observing that the top 5 of the world’s largest companies by market capitalization today are all in I&T: Apple, Amazon, Alphabet, Microsoft, FaceBook, [in decreasing order, according to Statista on May 11, 2018.] BTW, Alibaba, and Tencent are #6 and #8. Even a decade ago, the list was very different.

It shouldn’t surprise anyone that all top 5 companies are American. And it did not happen by accident, or by luck. The US has made innovation & technology part of its national strategy for many years, at least since the Second World War. Most advanced economies, from large to small, have also done so. HK, however, seems to have been left behind in this race. The rest of the 4 Asian Tigers have passed us.

But I believe HK does have many of the key ingredients to be successful in this area. The competitive advantages of HK are well known: being Asia’s international city, English speaking, mature and international standard of legal and business systems, a well educated workforce, world class universities (having the most number of top 100 universities of any cities), free access to information, and leverage on the fast rising Chinese economy and market under the One Country Two Systems governance. I have said before that HK plus SZ alone already presents unrivaled advantages compared to the most successful innovation hubs around the world. And with the national Greater Bay Area strategic plan, the opportunities can only be more plentiful.

The spirit of entrepreneurship has always defined HK’s success, although traditionally it has never been in technology. However, starting recently we have seen a change. Now HK has produced 3-4 “unicorns”, those pre-IPO companies valued at over US$1B.

So maybe we are finally turning around the corner [on the innovation & technology race track!]

Not that I want to pour cold water over our euphoria, I do want to highlight several challenges that we need to overcome if we were to become successful in the new innovation economy. I group them into 3 categories.

First, the most important but also the most difficult, is a change of our culture and mindset. We have to be willing to accept that innovation means trying new things and to be open to new ideas. That there is no guarantee of success, and that we need to take risks, but that we can also accept and learn from failures. That innovation usually leads to uncertainties and disruptions, which is contrary to HK’s prevailing culture of preferring “stability” and “certainty”. We also have to understand that technology changes ever more rapidly, that we cannot predict the future and that we have to adapt to a fast changing world. The hot topic of today, be it AI, or robotics, will likely be replaced in the not too distant future, by something we don’t know yet, so whatever we choose to invest in today should allow for that. We need to focus but we also need to allow for change. Finally, our administrative culture, including our government, has to change the mind set of “do less, fewer mistakes”.

I’d like to use just one example to illustrate the need for a culture change. It is about our students’ choice of studies. The most desired university programs in HK are: medicine, law and business. They attract some of our most talented students. The top DSE scorers in the past few years all chose majors in these fields exclusively. Well, why not? These professions enjoy good, stable, and well paying careers. But how are we going to develop innovation and technology successfully if our best minds are not participating in it? Can these professional fields alone be the engine behind our future economic growth? A lack of tradition, and successful role models, feeds doubts and negative impression of an uncertain career in innovation & technology. We need to break out of this vicious cycle.

One idea, which I have been among its advocates for, is for HK to build a few science magnet high schools, like Stuyvesant in NYC and Thomas Jefferson High School in Washington DC. Think of them as the CIS and Harrow’s for science. It’d group like-minded students together, give them a more advanced and faster curriculum in science and technology, and most importantly, give them the recognition that their talents and interests are valued by society. I know that there are several such plans being contemplated in HK and I’d like to see them come to fruition, sooner than later.

The second category of challenge [on our road to the promised land of innovation and technology] is the need to develop an innovation & technology eco-system, and not just any one component. We need not only the government to provide policies and funding, not only the universities to produce world class research and educate our student talents, but we also need the private sector to chip in, to invest in R&D and innovation, to help support our young talents by providing internships, scholarships and seed funding. We need parents to look beyond their own mindset and experiences, and look to the future that their children have to live and work in, to allow for the possibility that their children’s talent and interest may be different from their, and to encourage their children to choose their field of study according to their interest and view of the world.

We need to realize that each stakeholder has its own role and different considerations. For example, in our rush to get on the innovation & technology train, we should be careful not to push all of our universities to focus on “applied research” and to de-emphasize fundamental knowledge and understanding. A university, especially a research university’s role, is to produce fundamental understanding and knowledge, and to educate society’s next generation. These output in turn will make contributions to society, and not limited to just its economy.

We need to realize that we need money, but what we need even more is talents. We should invest in educating our local students, but just as importantly, we should continue to attract and welcome non-local ones.

The third and final challenge is perhaps the most obvious: we should leverage our unique system of governance of One Country Two Systems. We should leverage on the Country’s strength, resources and policies, while maintaining HK’s own unique and competitive Systems. So by all means we should find a way to benefit from Belt and Road, and the Greater Bay Area initiatives. We should take advantage of the recent policy from Beijing of allowing funding from the Mainland to support research in HK, even though we don’t pay tax to the Mainland.

But while we reap the benefits, we should also contribute. We should stop complaining about the competition from SZ and instead find ways to leverage the advantages that SZ has to offer. For example, as the President of HKUST, I am proud of our alumni Frank Wang, no matter where his company DJI is located! And having someone successful like him being educated in HK will benefit HK, no matter where he chooses to build his career. The best universities, indeed countries, have enough confidence to welcome the best but also wish them well wherever they go.

And the best way to contribute is to do something that leverages the intrinsic advantages and uniqueness of HK. For example, HK can form a new university in innovation & technology for the GBA that would adopt a novel way of educating students for the new economy. It can leverage on the abundance of advanced technological enterprises in the GBA and also to educate a new kind of workforce for them. It’d provide unprecedented career opportunities for HK students. It can leverage on the advantages of HK by being international, attract students from not only HK and the GBA but also from the whole China and all over the world. It may not even need money from HK government – it can be a private university, like Stanford and MIT, with support from the private sector, and in the future, from successful alumni. If this sounds too far-fetched, there is already a new university like this in China: the Westlake Univeristy in Hangzhou. In one of my recent articles, I called it “China’ Princeton”. It is in fact headed by a former professor from Princeton who returned to China a decade ago and later became a Vice President at Tsinghua Univeristy. I know that there will be more such private universities in China in the near future. In addition, there have been proposal by the presidents of several universities in SZ to form a GBA “joint university” to be located in the Lok Ma Chau River Loop. The writing in on the wall – if we don’t hurry, others will take the initiative.

HK had the “can-do” spirit when it formed HKUST almost 30 years ago to address a challenge of that time, that of the 1997 handover – now we have a new challenge, and new opportunities, and we can do it again.

I’d like to conclude by noting that HK is indeed in a very interesting historical moment. The world around us is changing so rapidly that our old assumptions cannot be relied upon to chart our path for the future. But unless we take our fate into our own hands, we run the real risk of not only falling behind, but also being marginalized. Do we want to be the Venice of the past, or the future?