Three years on: Hong Kong’s smarter digital journey

Leonie Valentine October 2019 Emerging Technology, Hong Kong

Two years after the first publication of our Smarter Digital City research, Hong Kong is moving closer toward realizing its digital transformation goals, yet a number of challenges remain. Here, Google Hong Kong’s managing director of sales & operations Leonie Valentine offers some answers to the pivotal question: How can Hong Kong become a Smarter Digital City?

Having worked in the tech industry for two decades, I’ve seen many waves of companies and cities digitizing. When I moved to Hong Kong eight years ago, I took note of the city’s internet infrastructure — multiple 4G mobile networks, high mobile phone penetration, and super-fast broadband. However, I was also struck by the relative lack of digital applications. For the level of investment being made in the city, digital innovation seemed really limited.

At the start of 2017, we kicked off a three-year research project with the primary goal to find out what was holding Hong Kong back from becoming a Smarter Digital City. With the release of Smarter Digital City 3.0, our third and final white paper published in partnership with Ipsos, we explore Hong Kong’s steady progress on its journey toward digitalization. With internet and smartphone penetration now at 90.5% and 89.8%,1 respectively, Hong Kongers of all ages are increasingly adopting digital — and interacting with more digital touchpoints across key sectors like travel, finance, and retail.2 But while Hong Kong’s residents are embracing digital, the city itself is still struggling to find the right talent to accelerate its transformation.

So how can Hong Kong achieve digital transformation? Here, we offer five recommendations for businesses and policymakers to accelerate Hong Kong’s digital development.

1. Start with the customer

Our SDC 3.0 research shows that consumers in Hong Kong are more digitally savvy and also more demanding than ever before. As consumer expectations for digital grow, businesses of all shapes and sizes need to think more like a customer (and perhaps a little less like an owner) to design highly engaging customer-centric services that are easy to use and tailored to local needs.

Using design thinking techniques can help identify growth opportunities as well as customer pain points. Whether you want to make or save money, analyzing your existing customer data with these techniques will provide insights into consumers’ current online behavior and help predict their future needs.

2. Partner with SMBs to take action today

SMBs are increasingly aware of the importance of digital: 83% of them agree that digital transformation is critical to their success.2 But the challenges facing SMBs are much greater compared to large corporates due to lack of resources and a lower margin for error.

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SMBs can start their digital journeys with simple initiatives like setting up free business profiles online, testing new products on popular e-commerce platforms, and adopting digital marketing to drive online and in-store traffic. Mobile-friendly landing pages or websites are useful for attracting customers, and setting up search engine optimization (SEO) or adopting digital marketing techniques like search engine marketing and social marketing can help drive awareness and consideration.

Because resources are a constraint for SMBs, corporates can help the latter in their digitalization journey by partnering with them on a number of ready-to-adopt digital solutions for collaboration, communication, and customer service. This is a win-win partnership for both — SMBs can leverage new digital platforms while focusing their energy on their core strengths, and corporates can build up long-term partners for a more robust ecosystem.

3. Encourage lifelong learning

Technological talent is important for a Smarter Digital City transformation. However, with 64% of corporates and 51% of SMBs struggling to recruit talent with STEM (science, technology, engineering, and math) backgrounds, it’s clear that Hong Kong is in short supply of such talent. Thus, building a sustainable, smart workforce is more critical than ever.

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To overcome this shortage, the existing workforce needs the right tools and resources to upskill themselves, while the younger generation, who will make up the workforce of tomorrow, need to see more digital role models to encourage them to pursue an education in STEM.

Encouragingly, Hong Kongers are willing to learn: 81% of residents have expressed eagerness to acquire new digital skills.2 And with a wide variety of online self-service and instructor-led digital training courses available in both English and Cantonese — such as Google Cloud Certified Program, Explore ML program, and Digital Garage — every business can now afford to invest in upskilling their staff through such programs.

For tomorrow’s workforce, seeing more digital successes (such as Klook, Airwallex, and other companies we have featured in our SDC whitepaper) will help enforce the perception that a career in STEM is not only viable but desirable.

4. Be open to possibilities

Hong Kong is literally a hub for data — key industries such as transport, logistics, tourism, and finance depend on the city’s digital infrastructure to move mountains of data across the city and around the globe. Collaboration among businesses large and small as well as key stakeholders such as government bodies to share easily accessible open data and real-time information will unlock new possibilities to improve efficiencies and advance digital developments.

For example, in the case of retail, real-time traffic and transport open data can be applied to help alleviate delivery issues and improve operational efficiencies. Open data can also make a profound difference in both the transport and healthcare sectors, bringing positive benefits to both residents and researchers.

Corporates can further drive progress by investing in open platforms (e.g., APIs and cloud services) that facilitate collaboration externally with key partners while ensuring data privacy for individuals.

5. Collaborate and communicate to drive innovation

Hong Kong is a unique fusion of Eastern and Western cultures, languages, and infrastructures. Our historical foundation as a trading hub, an international financial hub, and a doorway between East and West, helped cultivate generations of business leaders and entrepreneurs who put Hong Kong on the map as Asia’s World City. Our city’s future now depends on our ability to collaborate and communicate to drive innovation and value creation.

Hong Kong was once known for its creativity and cultural vibrancy (e.g., Bruce Lee, Cantopop, Shaw Studios). That spirit can be revived. We can reimagine Hong Kong’s future by acting on insights from residents, businesses, and other key stakeholders. Embracing digital can provide for customer-centricity and product differentiation while simultaneously cultivating creators, start-ups, and next-generation talent. This may require a scaled, cross-sectoral effort to collaborate on projects that can address the city’s most pressing digital needs as well as effective communications to highlight the business case and benefits of change, and encourage adoption of digital technology.

Building a Smarter Digital City together

One of the most interesting insights from SDC 3.0 is that Hong Kongers aged 35-44 have not only experienced the largest leap in the level of digital savviness among all age groups, but they are also as digitally savvy as their younger peers aged 18-24. This trend is exciting and promising — in order for Hong Kong to accelerate its digital journey, we need leaders who understand and are willing to adopt digital. And Hong Kongers in their mid-thirties and early forties, who are likely to assume executive positions across sectors in the next decade of their lives, are now better positioned to lead the city toward a more digital future.

Hong Kong’s digital transformation hinges on the ability of all parties to keep an open mind and actively collaborate to drive innovation. By identifying areas for improvement and working together to address them, we can develop new technologies and services that will enhance Hong Kong’s livability, create new opportunities in the digital economy, and achieve our goal of becoming a Smarter Digital City.

Smarter Digital City 3.0: Highlights from the research