Hong Kong will need to attract more investment in R&D to become an innovative city
Asian cities are moving up the innovation rankings, with Tokyo, Singapore and Beijing among the top five in JLL’s report on the most innovative cities globally, yet Hong Kong will need to attract more investment in R&D if it is to become one.
The city failed to rank in the top 20 list in the latest Innovation Geographies report, which tracks a broad range of factors such as the strength of the local talent pool, investment in high-tech industries, as well as R&D (research and development) expenditure.
The report found Hong Kong lacking in its R&D expenditure and the number of patents obtained, although it performed well in attracting foreign direct investment into high-tech industries as well as venture capital funding. The city also ranks highly in terms of talent concentration with a number of well-respected universities.
“More spending on R&D would improve Hong Kong’s innovation credentials, and attract more technology firms and talent to the city. Any private investment would complement what the government is spending and help Hong Kong move up in the rankings. Adding to this, the shortage of land in Hong Kong makes it difficult for any advanced manufacturing to reach significant scale,” says Cathie Chung, senior director for research at JLL Hong Kong.
Although Hong Kong’s real estate industry recognise the benefits of proptech, action is lagging against comparable cities in Asia, notes Jordan Kostelac, director of PropTech for Asia Pacific at JLL. “The Hong Kong government playing a more active role to create a healthy environment for the growth of proptech will also help Hong Kong become more innovative.”
Innovation attracts real estate investment and corporate occupiers
The report shows strong correlation between a city’s level of innovation and the concentration of talent with its rental growth potential. Cities that have advanced innovation ecosystems will retain highly skilled workforces, and in turn, attract both investors and corporations.
Investors tend to focus on locations that are capable of sustaining long-term occupier demand, while corporates are drawn to those that have deep talent pools and sophisticated innovation ecosystems to ensure they are well-placed to succeed in the global marketplace, according to JLL Asia Pacific Research.