A New Normal: Resilience of a digital economy
- There is no shortage of cautionary tales of businesses being caught out in the cold in the Covid-19 pandemic, unprepared for the overnight disruption to the way they work.
- The global pandemic has exposed weaknesses in companies and economies that lack a strong digital infrastructure, leaving them unable to execute continuity plans in an emergency.
- Hong Kong, however, has kept business running, thanks in large part to its digital ecosystem and a well-equipped, future-looking workforce.
As the coronavirus swept across the globe, industries ranging from automotive to food processing saw global companies suspending production as their supply chains broke down. Other organizations got caught up transitioning to digital when they could have been addressing consumer needs.
But not in Hong Kong, where companies like Bull. B Tech are developing one-stop e-learning apps for schools and Clare AI are using AI to streamline customer relations — just two examples of the innovative ways the city is keeping business moving smoothly despite the evolving health crisis.
Business never stops, even in the thick of pandemics. That success can be chalked up to Hong Kong’s digital readiness.
Hong Kong’s digital ecosystem
Underpinned by government investment and public-private partnerships, Hong Kong businesses continue to move forward despite disruptions. That stability stems from several key factors.
Kickstarted with the Digital 21 Strategy in 1998, Hong Kong has developed an impressive information and communications technology (ICT) ecosystem — from its vast broadband Internet network, boasting a household penetration of over 93 percent, to the nearly 100,000 people that work in ICT.
Hong Kong’s Smart City Blueprint released in December 2017, has set out a clear and concrete roadmap for smart city development and planned to make use of innovation and technology to address urban challenges and enhance Hong Kong’s profile as a business hub. The Government has committed over HK$900 million (US$116 million) to provide essential digital infrastructure for smart city development in the city.
Government initiatives continue to be the backbone of the city’s digital transformation. The current leadership has committed over HK$100 billion (US$12.9 billion) to innovation and technology development.
This year, the government will release the Smart City Blueprint 2.0 to report on the progress of existing initiatives and new proposals, which includes facilitating the city’s adoption of 5G by expanding coverage of optical fiber networks and incentivizing public and private sectors to deploy 5G technology early, as well as managing various subsidy schemes to fast-track the development of the technology.
Cybersecurity support at the government level, from the Hong Kong Productivity Council’s training and consultancy services to the cybersecurity information portal’s step-by-step guidelines, means companies are safeguarded against risk at every turn.
Incubators, like the Hong Kong Science and Technology Parks Corporation, which runs incubation programs, including Incu-Tech, Incu-Bio and Incu-App, bolster the city’s digital base with investment in talent, technology and ideas.
Cyberport provides a one-stop platform for digital entrepreneurs, from seed funding, to incubation, all the way up to co-investments for start-ups reaching Series A funding. As the city’s FinTech flagship, Cyberport has been entrusted by the government to administer a HK$120 million (US$15 million) scheme to create jobs and further nurture FinTech talents.
Last year, HK$50 million (US$6.4 million) was allocated to Cyberport to support local and regional competitions and major events, training and promotional programs, as well as sponsoring internships in enterprises, aimed at Hong Kong’s emerging e-sports industry. This funding is part of a broader strategy to boost industries across the digital ecosystem.
As a result of this comprehensive ecosystem, Cyberport was able to react quickly to Covid-19 and coordinate with its community members to offer innovative solutions to help the public overcome the challenges, exemplifying the city’s resilience.
Mindset and agility of businesses and employees
As the Covid-19 pandemic swept the globe, Hong Kong became an early adopter of remote work, a move aided by automation, apps and local start-ups.
The city’s numerous civil servants also made the switch quickly, with the support of everything from mobile technology to guidelines from the government helping remote workers to cope with uncertainty and isolation during this difficult time.
This adapt-to-anything mindset is not only aiding business now — it will also aid the future of work. According to a survey performed by Gartner, 74 percent of CFOs globally say they will move at least some of their workforce off-site, meaning remote work is here to stay.
Hong Kong’s risk profile is better than many of our neighbors — historically, we’ve escaped earthquakes and tsunamis, for example — but it would be foolish to think we are completely immune… This kind of sudden business disruption is the kind of thing that keeps business execs and IT leaders up at night. The best remedy is a solid business continuity strategy you can count on to minimize the impact and keep your business running through thick or thin.
Dispute resolution and deal making
Hong Kong’s eBRAM International Online Dispute Resolution Centre Limited (eBRAM Centre) is pioneering a completely digitized dispute resolution system.
eBRAM Centre, a local non-governmental organization, founded by members from major stakeholders in the legal and related sectors, has been developing an online platform that will provide one-stop cross-border dispute resolution services to enterprises worldwide.
A full-spectrum of online dispute resolution (ODR) services including negotiation, mediation and arbitration will be made available, in line with the APEC Collaborative Framework on ODR. The online platform will also be able to provide deal-making services in due course, enabling parties to enter into business deals online, redefining the ideas of deal-making and e-commerce in the new digital era. Technologies like blockchain, AI and cloud computing will be deployed to create a secure space for dispute resolution and deal-making performed fast and efficiently. This secured, innovative and user-friendly online platform will keep deals running even in the face of crises and marks a milestone in Hong Kong’s LawTech development.
In anticipation of an upsurge of disputes arising from or relating to the Covid-19 pandemic, the government announced on 8 April the establishment of the Covid-19 ODR Scheme which is operated independently by eBRAM Centre as the service provider to provide speedy and cost-effective ODR services to the general public and businesses.
The scheme will cover disputes arising out of or in relation to Covid-19 directly or indirectly, provided that the claim amount of such dispute is not more than HK$500,000 (US$64,000) and either one of the parties to such dispute is a Hong Kong resident or company. Under the scheme, parties will attempt to resolve their disputes through a multi-tiered dispute resolution mechanism comprising negotiation, mediation and arbitration. To make use of the services under the scheme, the parties are required to enter into a dispute resolution agreement and only need to pay HK$200 (US$26) each as registration fees. The scheme was launched on 29 June.
With support from local R&D Centres funded by the Innovation and Technology Fund, Hong Kong’s supply chain is becoming increasingly digitized.
The Logistics and Supply Chain MultiTech R&D Centre (LSCM) has helped to produce IoT-fuelled fast-track clearance, smart cargo locating services and VR training.
The Electronic Business System (eBS), meanwhile, has given the shipping industry a shot in the arm. The eBS digitizes all port formalities and other shipping-related documents, keeping goods moving freely.
Meanwhile Alibaba and the Hong Kong International Airport have begun work on a fully automated, smart logistics hub that will use large-scale robotics to facilitate shipments and improve trade. That project is set to launch in 2023.
Hong Kong’s history with crises has steeled it for moments like these. Companies across the board have been able to adapt to the challenges posed by the pandemic — enacting crisis communications, ensuring employee health and safety, keeping documents secure even when accessed off-site — through meticulous business continuity planning.
Prepared for the future
With 5G technology, the next disruption on the horizon, Hong Kong is well on its way to realizing its smart city ambitions. But the future relies as much on the resilience and readiness of the workforce as it does infrastructure.
Hong Kong’s digital ecosystem, strengthened by emerging technology and government support, has enabled the city to continue to function in the face of adversity. Its secret weapon — its well-prepared, digital-savvy population — keeps it humming along.
With all these pieces in place, Hong Kong is providing a blueprint for other cities and countries to emerge better equipped in the new normal.