(20 June 2024, Hong Kong) Hong Kong Coalition and Our Hong Kong Foundation jointly released a report titled Opportunities and Challenges for Hong Kong Youths on their Entrepreneurial Journey in Guangzhou.

Youths are the future pillars of our country. In driving the Greater Bay Area’s development, it is essential to assist young people in overcoming hurdles in education, employment, entrepreneurship, and home ownership. Of which, entrepreneurship is a key engine driving Hong Kong’s integration into the overall development of our country, in addition to its role in creating employment opportunities, promoting economic growth and innovation. In 2019, the "Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area" (the "Outline Plan") clearly stated that it would support young people and micro, small and medium enterprises from Hong Kong and Macao to realise their development potential on the Mainland, extend local entrepreneurship subsidies and support to cover eligible entrepreneurs, and proactively take forward the development of youth entrepreneurship and employment bases for Hong Kong and Macao.

The country's strong support towards northbound entrepreneurship and vast development opportunities within the Greater Bay Area (“GBA”) have prompted more Hong Kong youths to develop their careers in GBA Mainland cities. Guangzhou, as the provincial capital of Guangdong Province, has strong comprehensive strength, a well-developed industrial system, and has long supported the entrepreneurship of Hong Kong and Macao youths. It is considered an "ideal place" for nurturing entrepreneurs. As of July 2023, 52 Hong Kong and Macao youth innovation and entrepreneurial bases have been set up in Guangzhou. These bases have attracted over 2,000 young people from Hong Kong and Macao to pursue innovation and entrepreneurship in Guangzhou. Cumulatively, around 2,100 projects have been incubated across more than 20 industries, including high-tech, e-commerce, biomedicine, arts and animation, and the internet of things.

Amid the government’s efforts in launching numerous policies and measures to encourage Hong Kong youths to start businesses in Mainland cities of the Greater Bay Area, Hong Kong Coalition’s Guangzhou team has identified areas for improvement regarding the support offered towards Hong Kong entrepreneurs in Guangzhou through conducting field research and engaging in in-depth discussions with relevant stakeholders. This study lists out the three key challenges faced by Hong Kong entrepreneurs, including:

• The gap between the capabilities and cognition of entrepreneurial youths and their actual needs;

• The difficulties faced by entrepreneurial youths in gathering entrepreneurial-related information;

• The homogeneous development of entrepreneurial bases

In response to these challenges, this report proposes a total of seven policy recommendations to the Hong Kong SAR Government and the Guangzhou Municipal Government to assist Hong Kong youth entrepreneurs to develop further in Guangzhou.

1)   Recommendations to the Hong Kong SAR Government

Through interviews with entrepreneurs and entrepreneurship base representatives, the research team recognized that some Hong Kong youths are not familiar with the operations of industries and culture in the Mainland, and lack adequate understanding of Guangzhou’s entrepreneurial environment and policies, which hinder the success of their businesses in the Mainland. Moreover, interviewees stated that the Hong Kong Economic and Trade Office in Guangdong may not fully understand the characteristics, needs and situations of Hong Kong entrepreneurs in the Mainland, rendering insufficient support towards Hong Kong youths in Guangzhou. In response to the above challenges, the report’s policy recommendations include:

• Providing Hong Kong youths with short-term employment skill training in related industries, using the "Employment First, Entrepreneurship Later" model to help Hong Kong youths acquire relevant skills and experience, gain a better understanding of Mainland society and industry culture, and gradually establish entrepreneurial networks, thereby enhancing entrepreneurship abilities;

• Establishing a GBA entrepreneurship policy information platform for Hong Kong youths. Leveraging on the “HKYouth+” youth mobile application to connect with Mainland policy information platforms, strengthen the promotion, categorization and interpretation of Mainland entrepreneurship policies, enhance the promotion of successful entrepreneurship cases, and establish a communication channel between Hong Kong youth entrepreneurs and the Government;

• Expanding consultation services on business operations infrastructure for Hong Kong youth entrepreneurs. The Hong Kong Economic and Trade Office in Guangdong can leverage on its "Guangdong-Hong Kong-Macao Greater Bay Area Development Promotion Centre” to provide consultation services in aspects such as education and healthcare, follow up on the obstacles encountered by Hong Kong youth entrepreneurs in applying for preferential policies, and reflect them to the relevant Mainland authorities.
   

2)   Recommendations to the Guangzhou Municipal Government

To further strengthen the implementation of entrepreneurship policies, optimize the services provided by entrepreneurial bases for Hong Kong youth entrepreneurs, and provide more convenient financing support for entrepreneurs through enhancing the connectivity of credentials in both places, the report's policy recommendations include:

• Encouraging incubators to be more proactive in assisting start-ups to apply for funding from the Mainland government with reference to the Hong Kong Government's "Dedicated Fund on Branding, Upgrading and Domestic Sales (BUD Fund)" which provides initial funding and requires the appointment of guarantors. Incubators can assist Hong Kong-funded enterprises in overcoming the severe early-stage fund shortages by advancing parts of the subsidy amount in installments. In addition, the incubator's assistance could also be included in the performance evaluation index system (service capabilities) of technology business incubators.

• Improving the service capabilities of private incubators, including strengthening the coordination and division of labor among different entrepreneurial bases, and incentivizing private incubators to enhance service quality (for example, setting higher standards towards private incubators’ professional competency and value-added services such as networking resources, accommodation and amenities); Encouraging incubators and accelerators to establish offshore incubation vehicles in Hong Kong, with the objective of providing preliminary consulting services to Hong Kong youths (who are currently not based in Guangzhou yet) and assist Hong Kong youth entrepreneurs to explore markets and leverage on resources from both the Mainland and international markets.

• Promoting cross-border credit referencing cooperation to facilitate cross-border financing activities for Hong Kong people. Nansha could be considered a suitable location for a pilot project on data sharing of identity documents of Hong Kong and Macao residents (Residence Permit, Mainland Travel Permit, Hong Kong Identity Card, etc.) and connectivity of related application systems; as well as allowing banks in both places to access clients' credit referencing data upon obtaining clients’ consent.

3)   Recommendations to other organisations

Hong Kong-funded start-ups incubated in Guangzhou lack opportunities to expand into Hong Kong and overseas markets; at the same time, the institutional differences  between the two places make it difficult for start-ups in Hong Kong to expand into the Mainland market. To further support Hong Kong youth entrepreneurs in expanding into new markets, this report recommends strengthening of cooperation between Guangzhou’s incubation bases, the Hong Kong Science and Technology Parks Corporation (HKSTP) and Cyberport. Firstly, this can encourage start-ups to carry out preliminary incubation in the incubation bases in Guangzhou, and return to Hong Kong as their business grow for further incubation in HKSTP or Cyberport, before expanding into overseas markets. Second, incubatees and graduate tenants of the Cyberport and HKSTP that aspire to expand into the Mainland market can establish their network in the Mainland, through settling down in Guangzhou’s incubation bases.

This report aims to enable Hong Kong's entrepreneurial youths to better cope with the challenges associated with starting businesses in Guangzhou, through the implementation of recommendations for the Hong Kong SAR Government, the Guangzhou Municipal Government, and other relevant organisations. These recommendations include enhancing the youths’ capabilities and cognition, optimising policy transmission, and improving the service capabilities of entrepreneurial bases.

Dr Jane Lee, Deputy Secretary-General of the Hong Kong Coalition, and President of Our Hong Kong Foundation stated in her remarks: "The country will prosper only when its young people thrive. The State has been stepping up its support for young entrepreneurs, building them a stage to pursue innovation and entrepreneurship, and facilitating Hong Kong youths in better integrating into  the nation’s overall development. Long-term efforts have to be made to promote Hong Kong youths’ participation in the development of the Greater Bay Area. This report hopes to unite the strengths of the Hong Kong and Mainland governments, as well as the private sector, to enhance policy support for Hong Kong youth entrepreneurs in the Mainland, enabling them to pursue and realize their dreams.”

Ms Iris Wong, Chief Officer of Hong Kong Coalition, and Hong Kong delegate to the National People’s Congress stated: "Hong Kong Coalition will consider further researching on other innovation and entrepreneurial bases in the Greater Bay Area, such as the 18 entrepreneurial bases recognized by the governments of the HKSAR and Guangdong, to learn about the latest updates and actual conditions of Hong Kong youths pursuing innovation and entrepreneurship in these regions to help them better utilise the market scale and regional advantages of the Greater Bay Area, and create better conditions and opportunities for their development.”

Mr Victor Kwok, Assistant Research Director of Our Hong Kong Foundation believes that "Currently, the country is in a period of rapid growth of innovation and entrepreneurship. Strengthening the governments’ support towards Hong Kong entrepreneurial youths in Guangzhou and other Mainland cities within the Greater Bay Area will not only provide more upward mobility opportunities for Hong Kong youths and create more room for development, but also further promote the development of new quality productive forces and talent circulation within the Greater Bay Area.”
 

Opportunities and Challenges for Hong Kong Youths on their Entrepreneurial Journey in Guangzhou (Executive Summary and Report in Chinese)

Executive Summary:  https://bit.ly/3KOOX9V
Report:  https://bit.ly/3RCzIo9