HongKongEcho: A tale of two cities
“Silicon Valley doesn’t have everything, nor does Shenzhen,” says Benjamin Joffe, Partner at the world’s first and largest hardware accelerator, HAX. We spoke to him about how Hong Kong can plug the gaps in Shenzhen’s tech boom for the best of both cities.
It may look shabby and chaotic to the untrained eye, but the electronics market in Shenzhen’s Huaqiangbei district is a visceral, exaggerated incarnation of the city’s undeniable spirit of enterprise. Row after row of stalls selling every imaginable electronic part by the handful or by the hundreds of thousands. A tech geek’s goldmine.
No wonder the world’s most active early-stage hardware investor has set up its accelerator, HAX, right in the middle of it. “In Shenzhen, speed is the number one advantage. Building something and you need a component? You literally just take the elevator downstairs,” explains Benjamin Joffe, Partner at HAX.
We arrive at lunchtime via a nondescript elevator and are met by an expansive open-space work area. Hardware prototypes sit alongside boxes of takeaway food.
The idea behind HAX is simple. Help innovators from around the world connect with Shenzhen’s unique ecosystem and bring products from the prototype phase right up to hitting the market.
It operates two four-month programs a year, taking what might have started as a summer garage project to something polished, promoted and ready for sale. The first round is uniquely international, welcoming 15 startups from a pool of around 500. The second is for Chinese companies, featuring a smaller batch of eight to ten participants.
So far it has invested in over 200 companies. And all of this is happening at just an hour’s train ride to Hong Kong. So why not HAX in Hong Kong? “The question has been asked a lot. Look, we don’t have a particular attachment to Shenzhen; we’re simply looking for the ecosystem that gives us the most advantages. Hong Kong might sound like it’s nearby, but it’s like saying the gym is 20 minutes from home versus across the street. Any friction in the creation process has a huge impact,” says Benjamin.
Shenzhen, of course, comes with its own advantages for hardware: speed, skills, savings and scale. These simply can’t be matched by Hong Kong.
“For our startups, it doesn’t really make much sense to be in Hong Kong,” says Benjamin. “Hong Kong is looking for its footing and how it could better integrate. The question is: ‘What are the resources and how accessible are they?’ Well, Shenzhen has the resources. So I think the mind-set probably needs to shift from one of competition to thinking about how we can leverage all the good things Shenzhen is doing.”
Where Hong Kong fits in
Rule of law, a high level of English, open access to internet, first-world living and general international accessibility are all features of Hong Kong that can complement Shenzhen’s booming tech industry, he says.
To reinforce these advantages, Benjamin pinpoints Hong Kong’s healthcare prowess as a potential facilitator for better cross-border collaboration. First world care with first class tech, thereby making the city a testing ground for innovation in the sector. In short, adding a service layer to the tech.
The tech itself is potentially ground-breaking. Digital therapeutics like brain stimulation to replace problematic anti-depressants sounds like science fiction but they’re already in development. Offer Hong Kong, with its world class expertise, as the pilot area for tech like this and you begin to look a lot more attractive to the best and brightest startups.
After all, much of the tech isn’t ‘from’ Shenzhen per se – the startups might be from Europe or the US – but innovators might be inclined to stick around in Hong Kong if they can easily go back and forth between the two cities for testing and modification as they fine tune their product.
While there are a number of sceptics, the proposed Lok Ma Chau Loop Innovation and Technology Park could be a possible site for collaboration. Nestled right on the border of the two cities, the 87-hectare site could offer “an interesting spot where you could have some of the benefits of Hong Kong but also easy access to Shenzhen,” reasons Benjamin.
That’s the idea anyway.
Still, for Hong Kong to find its role in complementing its ever-growing neighbour, it needs to find a way to become “more progressive,” admits Benjamin. “The problem is that Hong Kong is trying to look progressive – I’m a newcomer so take it with a grain of salt – but it’s actually fairly conservative. You need to be more agile, otherwise you’ll become irrelevant.”
