To Rebuild Hong Kong, activate Gen Z

The enactment of the controversial national security law has effectively quelled the disruptive social movement that was, until then, smoldering Hong Kong’s economy for months with no end in sight. Below the surface of the seemingly tranquil city landscape that has since taken down all pro-Hong Kong independence flags and silenced all subversive slogans, a latent resentment towards Mainland China lingers. Many consider that this quiet moment was brought on by fear of legal repercussions rather than by consensual allegiance to the motherland. At the same time, inspired in part by the concerted anti-extradition law movement in early 2019, there has been a shift in collective consciousness underway in the form of a uniquely “Hong Kong” identity that is ideologically non-Chinese. In the popular online media, “we just really f**king love Hong Kong” became an oft-used catchphrase that struck a chord with many members of Generation Z.

While the majority of Hong Kong citizens still consider themselves Chinese — proactively distancing themselves from any allusion to an independent state — there is no denying that this is by far the most polarized Hong Kong one has lived in since the handover. Once proudly identify themselves as part of China, young Hong Kong millennials and Gen Z no longer feel that they belong to the city, which was demonstrated by an online movement that celebrates sanctions against our own head government executives by a foreign government and the removal of the preferential status of Hong Kong. The collateral damage further weakens the very fabric of a frail economy upon which many depend.

There are reasons aplenty: diminished economic opportunities, high costs of living, diverging political ideologies, widening income and social inequality, a perceived interference with their accustomed way of life, and the list goes on. There is a generational element at work. The oldest members of Gen Z may have just entered the workforce, but they will eventually outnumber millennials in the workplace. Being the first generation of true digital natives, they grew up with no knowledge of a world without internet and digital technology. Being digital natives has shaped the way they see the world around them and their expectations of the workplace. It is difficult to imagine that technology will not be an essential component in the development of their careers. Yet, neither their technical proclivities nor their sound understanding of the digital economy have rewarded them with notable career upside. “If it ain’t broke, don’t fix it” is a tried-and-tested formula that many Hong Kong companies stubbornly cling to. More than anything, such reluctance to change may hasten the end of Hong Kong’s competitiveness.

Was the shrinking importance a result of the meteoric rise of the Chinese economy, or was it due Hong Kong’s own steadfast abstinence to move away from its over-reliance on an analog, one-dimensional economy lacking in innovation and creativities?

How did we get here? History provides much-needed context: past national isolationism interwoven with the need of capitalistic impetus influenced events or trends we saw happening in Hong Kong in the late 1970s. Following the slow economic liberation of China since then, Hong Kong began the process of promoting closer links with the Mainland. Hong Kong’s role as a center for trade between China and the world became a critical foundation for China’s development. China’s entry into the World Trade Organization in 2001 and the execution of the Closer Economic Participation Arrangement between China and Hong Kong in 2003 set in motion the process of economic integration. The integration culminated in the roll-out of the blueprint of the Greater Bay Area development plan that aims to turn Hong Kong, along with its neighboring cities, into part of an economic hub that rivals Silicon Valley in magnitude and influence. Hong Kong’s role is to provide an international and market-oriented business environment based on the rule of law and under the jurisdiction of Mainland China. Its future competitiveness plays a key part in kickstarting such gigantic well-oiled economic engine.

We usually discuss Hong Kong’s competitiveness in the form of its prized assets, such as its convenient geographic position and transparent legal and regulatory system. However, while the Mainland government and Hong Kong pledge to deepen integration between Hong Kong and the Greater Bay Area cities through the plethora of opportunities on the Mainland and belt and road countries, given Hong Kong’s idiosyncratic economic makeup, there is little in the way of understanding how exactly an average citizen of Hong Kong can reap the full benefits of this plan.

For example, one of the plans was to rewire more innovative resources and promote joint research, and to serve as an international science and innovation center in areas such as biotech and renewable energy. Research requires talents. How many local graduates would choose to launch or work in a start-up or research instead of pursuing a safe career in law, medicine, or banking? Lest we forget, Hong Kong’s gross-domestic-product is largely made up of traditional sectors such as finance and insurance, retail trades and real estate and other professional services. Also, Hong Kong’s influence in China’s economy continues to diminish. In 1993, Hong Kong accounted for more than 25% of China’s GDP, which has reduced to less than 3% by 2019. Was the shrinking importance a result of the meteoric rise of the Chinese economy, or was it due Hong Kong’s own steadfast abstinence to move away from its over-reliance on an analog, one-dimensional economy lacking in innovation and creativities? Hong Kong’s awkward embrace of technology is not confined to traditional industries; it is equally evident among most government departments. The rise of other South-east Asian counterparts also poses significant threats to Hong Kong’s competitiveness.

The Greater Bay Area was meant to be a plan to change all that. The tripartite cooperation was meant to benefit companies such as home appliance giant TCL with its production base in Guangdong, and global player such as Tencent after its listing in Hong Kong. Singling out few-and-far-between success stories does not hide the reality that few, if any, in Hong Kong benefit directly from such cooperation. The marginalized cohort is most out-of-luck to enjoy Hong Kong’s post-war prosperity, which preceded the inexorable acceleration of the Chinese economic drivetrain. The issues of the forgotten youth bereft of social mobility were eventually brought to a head by the upheaval in early 2019. In a city ridiculed as being ruled by real estate tycoons, one is hard-pressed to find an average non-professional working-class civilian who derives any real benefits from, or is an integral contributor to, big tech innovation that has been disrupting the old economy across the globe. How many of the recent big-tech IPOs target local Hong Kong market? To bridge the ideological differences and to deepen integration, Hong Kong young talents need to play a part in this burgeoning new economy.

To make Gen Z listen they need to be given a chance to be heard and feel heard. The tech-savvy generation wants to listen to leaders they can relate to and leaders who have experienced the same struggles that they have.

Hong Kong has the most hardworking, creative people the world has witnessed. But its much-maligned education system has failed to empower a ready-to-deploy workforce that caters to them or changes fast enough to fit their needs. If the government aims to avoid a mass exodus of talents to other foreign countries, the young millennials and Gen Z must feel that they have skin in the game. Further, the government needs to promote inclusivity and increase representation of this generation in the executive branch to formulate policies relevant and related to them. In the past years, the world has seen a growing number of young politicians taking center stage. In the UK, Rishi Sunak was less than 40 years old when he became the Chancellor of the Excheque, and Jacinda Ardern became the youngest head of state at the age of 37. Developing countries such as Indonesia appointed a relatively inexperienced 36-year-old, Nadiem Makarim, to be the Minster of Education and Culture. An academic and professional thoroughbred with brand names such as Brown, Harvard and McKinsey in his CV as well as hands-on experience as a co-founder of Indonesia’s first unicorn Gojek, Nadiem, a millennial himself, brings a tech-angle into the education discourse to nurture future young talent. Why can’t we do the same?

Communication is a two-way street. To make Gen Z listen they need to be given a chance to be heard and feel heard. The tech-savvy generation wants to listen to leaders they can relate to and leaders who have experienced the same struggles that they have. They need to know that they are being valued, and any present stopgap fails to address this generational dissonance. Rather than condemning the callow youth for annihilating the fruits of their past labor and their work to develop Hong Kong, the government should attract talents (they are in no short supply) who walked the same path during the same era in order to provide better solutions that answer to this potential group of talented youth.

In a place like Hong Kong, human capital is far more evenly distributed than financial capital. The government should work with young talents by subsidizing continuing on-demand education with apprenticeship opportunities at companies that represent the new economies (such as big tech) or companies seeking to revamp their aged modus operandi and allow the younger population to spearhead progressive digital transformation. Look no further than Shenzhen, which quickly became China’s breeding ground of innovation and creative technology startups. The use of the high-speed railway can make Shenzhen that is a stone throw away even more accessible to people in Hong Kong. Perhaps a form of government fast-pass can be provided to apprentices traveling to and from Chinese companies accompanied by subsidized housing similar to those offered by large companies to its workers coming from out of state. The Hong Kong population should have opportunities to apply the skills they learn from the rapidly developing tech companies to the future development of Hong Kong itself. The proposed measures would also enable China to share with the next generation a better understanding of Chinese heritage, society, and its evolving digital economy. In Hong Kong, socially responsible blue-chip companies should adjust hiring practices and trainings to entice potential employees from this generation to join their workforce with digitally-grounded mindsets. This is a win-win. Similar to Singapore, the government should encourage small-to-medium enterprises to digitize their business models and serve as a matching agency between burgeoning talents in the new economy and the analog economy of old.

It’s not about what Hong Kong once was. It’s about what it is now, and what it has the potential to be.

To retain talent and promote better integration with China, Hong Kong should focus on the youth. The ideological struggles between the aging and the younger population, and between the pro-government and pro-democratic groups are in large part exacerbated by the uneven distribution of opportunities. Gen Z has different priorities when compared to the generations before them. They were born in a world beset by global uncertainties, but they are also a group that has an unparalleled passion for entrepreneurship and authentic organizational engagement. Not only does the younger generation adapt well to new technology, they are also more receptive to engaging with other like-minded techies in China than their older colleagues.

What looks like a well-oiled engine from the outside is now too paternalistic to take on new public initiatives, such as those that defined Hong Kong as a rich tapestry of self-reliant places. In order to unleash the potential of one of the most entrepreneurial generations, the Hong Kong government needs to return to its roots and once again serve its local community, whose world-renowned grit and hard work once transformed Hong Kong from a fishing village to what it is today. It’s not about what Hong Kong once was. It’s about what it is now, and what it has the potential to be. Activate a diversified economic workforce and look beyond its role as an outdated professional service hub with a high-level of entry. Entrust the youth to introduce new ways of thinking so that we are more resilient and responsive to the fast-changing needs of our communities. Encourage them to take risks. Work with them as opposed to against them. In the end, they will feel that they have vested interests in the future of this city they call home. If members of Gen Z are the torch bearers of Hong Kong’s future, the least we can do is light their way and give them a chance to shine.

(An abridged version of this article first appeared in the South China Morning Post)

Head of legal with an MBA@MIT. Exploring topics on education, data privacy, tech, entrepreneurship and PE/VC landscape.

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