Commentary: Hong Kong Should Let In The Best And Brightest

You can't say Hong Kong aims low. On Mar. 3, Finance Secretary Sir Donald Tsang unveiled a $1.7 billion project called Cyberport, intended to launch the territory into the high-tech big time. It's an ambitious plan--and comes not a moment too soon. When it's finished in 2002, Cyberport will provide world-class facilities for information-technology companies. At the very least, it will keep Hong Kong in the running against rivals ranging from Malaysia and Singapore to Taiwan and the city of Shanghai. They're all vying to become Asia's multimedia capital. But there's a problem with Cyberport: Hong Kong hasn't got the people it will need to fill it.

Government officials say Cyberport is vital to the territory's future. That's why Hong Kong has given public land to a developer who is to build intelligent buildings, broadband telecom infrastructure, offices, exhibition space, residences, and hotels. But if Hong Kong is serious about IT, it must do far more than green-light a big project. It will have to attract the talent necessary for an IT industry--a huge task, since Hong Kong suffers a dearth of high-tech engineers. It graduates about 10,000 science and engineering students a year, about a third of what it needs. Overcoming the scarcity requires far-reaching changes, which Chief Executive Tung Chee Hwa must begin making now.

FLOOD WATCH. Tung could start at Hong Kong's border with China, which turns out 400,000 science and engineering grads yearly. Logically enough, entrepreneurs look to China to solve their labor problems. It should be easy to bring some of its surplus talent to Hong Kong, especially now that the Brits are gone and the former colony is reunited with the motherland. But it isn't.

Ask Henry Lin. He's president and CEO of Goyoyo International Group, which designs Chinese-language Internet search engines for America Online Inc. Last year, Lin tried to bring Goyoyo's co-founder, An Qin, to Hong Kong from Beijing. Qin, a 32-year-old graduate in information engineering, couldn't get a visa from Hong Kong, which has the right to limit immigration from the mainland. "We tried so many different ways," laments Lin. "But they have so many different restrictions."

It's even getting harder now to bring in people from China. This is understandable--partly. A local court ruling just gave more mainland-born children the right to stay permanently, raising fears of a flood of main-landers that would strain housing, schools, and public services. And even amid a shortage of qualified technicians, Hong Kong's unemployment rate hit a 25-year high of 6% in March. With the rate likely to keep rising, any move to open the borders is sure to provoke the labor movement, which has long opposed opening the territory to foreign workers.

The bureaucracy should brave the political clamor and increase the flow of skilled engineers from the mainland. "They have to tap into that talent base," says Scott Durchslag, a McKinsey & Co. principal, "or [Cyberport] is dead on arrival."

LONG WAIT. Finance Secretary Tsang promises that Hong Kong will study ways to expedite the visa process for Chinese scientists and researchers. But he should let Hong Kong companies look beyond the mainland, too. Consider Web Connection, a startup that creates E-commerce applications such as online ticketing and reservations. Founded four years ago, it has 70 employees--a dozen of whom are Western expats. Tapping the U.S. and European talent pool is essential in the Internet industry because that pool is so much deeper than either Hong Kong's or China's.

Singapore and Malaysia seem to know that. Both approve visas for high-tech employees in days. But Hong Kong can take four months. "In IT time, that's like two years," says Peter Hamilton, the 39-year-old Briton who started Web Connection. Hamilton has already lost several job applicants to Singapore rivals.

Hong Kong can't afford to move slowly. While technology has long taken a backseat to real estate, it's time to correct that economic bias. Dynamism and determination have never been in short supply among the territory's businesses. Tung Chee Hwa needs to show some of both if he wants to make Hong Kong a place that can attract top tech talent.

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