How can Hong Kong stay smart and competitive? By driving change through a ‘Public-Private-People Partnership’ approach

World Bank Blog – 12/14/2016Smart-Cities-All-you-need-to-know

According to the World Economic Forum’s “Global Competitiveness Report 2016-2017,” Hong Kong dropped two notches to rank as No. 9 in its Global Competitiveness Index. The decline occurred mainly because the city faces challenges to “evolve from one of the world’s foremost financial hubs to become an innovative powerhouse.”


One might argue this is an unfounded worry: After all, as a developed economy with a GDP per capita of US $42,000, Hong Kong has recorded an impressive GDP growth rate, over the last five years, of about 3 percent annually. This growth rate is higher than many developed economy.

However, if we look at the economic figures more closely, some worrisome early warning signs are already emerging – especially in terms of the factors that will drive Hong Kong’s future economic growth.

Apart from finance and insurance, the majority of Hong Kong’s GDP growth nowadays is contributed by “non-tradable” sectors that have less knowledge and innovation content, such as the construction and public-administration sectors.

According to the World Bank’s latest research on “Competitive Cities for Jobs and Growth,” long-term economic success and job growth in cities are usually driven by “tradable” sectors – economic sectors whose output could be traded and competed internationally. Firms in tradable sectors are exposed to fierce competition which, in turn, exerts pressure on them to invest in research and knowledge-intensive sectors so that they become more productive and innovative in order to remain competitive internationally. Hong Kong is now lagging behind its Asian and world peers in the critical features of knowledge and innovation.

Although the urgency to act to increase the knowledge-driven content of the economy is obvious, there seems to be a limited number of actions taking place here on the ground in Hong Kong.  How can Hong Kong forge ahead and start making changes?

Staying competitive in today’s global economy is like sailing against the current: Either you keep forging ahead, or you will fall behind.

The World Bank’s Smart Cities Conference – held in Yokohama, Japan last month – presented some good examples from around the world on how to use a bottom-up approach with active citizen engagement to increase the chance of success in implementing changes. The audience was interested in learning about the successful transformation of Yokohama through the cities many initiatives, such as the development of the Minato Mirai 21 central business district.

Minato Mirai literally means “harbor of the future,” and it is a testament to Yokohama’s transformation from a commuter town to a thriving modern green city. Minato Mirai was a large shipyard until the 1980s, when development began to turn it into a new city center. One of the critical features of this transformation is how the Yokohama government consciously pushed the private sector to develop new technologies as the drivers of economic growth, such as those in fuel-cells cars, energy conservation and other green initiatives. Some of these innovation are oriented toward the social sector, as well, to improve citizen engagement – for example, the “Local Good Yokohama” initiative, which provides a platform for citizens to share their thoughts and to participate in the city’s various activities. The World Bank, through its Tokyo Development Learning Center program, is actively engaging with Japanese cities such as Yokohama, to identify and disseminate practical solutions to many complex development challenges like competitiveness, inclusion, and sustainability.

Nowadays, with the popularity of the internet, smartphones and social networks, public participation in decision-making is becoming increasingly common. To better realize the increasing public demand for input into policy formulation and infrastructure planning, many policymakers have started to engage private organizations and the general public to help improve the development process. A “4Ps” approach – with a Partnership among the Public (the government), the Private (corporations and civic associations) and the People (the citizens) – is formed. Such an approach embraces the bottom-up participatory approach, which makes citizen engagement clearly visible for policymaking and infrastructure planning. As a result, the city can reduce the risk of unforeseen oppositions, allocate clear responsibilities and rights, and create opportunities for public input.

To use public input most efficiently and effectively, the use of the latest technology – for example, big data, artificial intelligence and internet of things – that allows for the quick capture and analysis of public data is critical. The audience at the Hong Kong conference appreciated that factor when speakers emphasized the importance of opening up application programming interfaces (APIs). APIs allow users to download data in various formats that fit their analytical needs. That was the critical success factor of the Los Angeles city portal “GeoHub,” which was launched last year; various other mobile applications have been flourishing because of the availability of APIs.

This “4Ps” approach with open APIs sets a good operational example for the “Energizing Kowloon East Initiative,” Hong Kong’s testbed for smart-city development. It is also relevant in addressing one of Hong Kong’s key bottlenecks to competitiveness: its fast-aging population and work force.

The Census and Statistics Department in 2015 announced that Hong Kong has about 1.12 million people (out of a total population of about 7 million) aged over 65 – and  15 percent of them are over 85. The aging of the population will continue to be steep as Baby Boomers reach retirement age. By 2040, one in every three persons in Hong Kong is likely to be over 65.

To facilitate healthy aging in Hong Kong, using the “4Ps” Partnership approach to link up families and neighbors (People), caregivers and doctors (Private) and policy implementers in government (Public) with a holistic and pro-active smart health system can keep our citizens safe, healthy and productive. A recent advisory paper by the Hong Kong Smart City Consortium suggests that a smart health system, with the 4Ps in place, can be constructed by the following three-pronged approach:

  • a Pro-active Smart Health Monitoring using an internet of things (IoTs) network to monitor individual’s real-time health with links to the individual’s family, doctor, clinic and hospital to provide comprehensive health management;
  • a Predictive Smart Health Analysis by which digital healthcare professionals detect acute diseases and provide real-time advice for personalized medical treatment; and
  • a Preventative Smart Health Community Network with the sharing of electronic health records, which enables tele-medical consultation for patients with chronic illness. When required under emergency situations, the nearest neighbor or healthcare practitioners would receive alerts to locate the person in need.

This is just one example of how Hong Kong can use the “4Ps” framework with the support of the latest technology to tackle the problem of an aging city.  What’s more, apart from conventional caretakers and medical practitioners, this new approach creates job opportunities for talented people from various fields, including sensor-network planning, biometric-data monitoring, social-behavioral model building, big-data analysis, and acute-diseases predictive model-building.

“Smart City (SC) means Competitive City (CC)”, according to a recent assertion by Kurt Tong, the U.S. Consul General for Hong Kong and Macau. Indeed, if the government can take the lead to promote cohesive collaboration with various players in the cities, not only can Hong Kong address the demands created by an ageing population, but our city can also enhance efficiency and stay competitive in the years to come.

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