Uber autonomous vehicle prototype spotted in San Francisco. Photo: Wikimedia Commons

Hong Kong has aspirations to be a world-leading city that promotes innovation and an economy driven by entrepreneurs and visionaries. Unfortunately, the reins of power in Hong Kong are held by bureaucrats who write nice speeches about innovation and devote budgets to temples to science and tech but have conservative mindsets.

Protecting vested interests is only part of the story. Inertia plays a part, with outdated bureaucratic structures hanging on in the shadows. A “precautionary principle” mindset, even if not explicit, also plays a role. It is this that could pose the biggest threat to public health.

The sharing economy has been the most obvious victim of protecting old structures. When Uber opened its Asia-Pacific headquarters in Hong Kong, it was much ballyhooed by inbound investment promotion agencies. Until, that is, the Transport Department shot Uber down mere weeks later.

Then the people of Hong Kong came out to rallies and signed petitions to show how much they wanted the service. Since then, the hugely popular company has moved its regional headquarters to Singapore. It recently announced that it was considering coming back to Hong Kong – but then shelved its plans after finding that the city’s bureaucracy wouldn’t even meet to discuss formalizing regulations to clarify the industry’s status.

Hong Kong has rebuffed a global disruptor in the transportation sector that provides work for 14,000 drivers in Hong Kong.

Petty administrative structures persist through inertia, like the “Registration of Local Newspapers Ordinance” newspaper-licensing requirements that apply to news websites. Created by the British to control the warring pamphleteers of the Communists and Kuomintang in the 1950s, the regime persists and even digital publications today must register and pay for … what? No one knows, and no one who works in the government can tell you why these requirements exist now.

Anyone can put anything on the Internet today, but if your website is deemed a newspaper, you have to print your articles, sign them, and submit them for record keeping. With a government expected to run deficits for the next five years, it’s hardly an expense and hassle worth having in a smart city of the 21st century. Digital entrepreneurs in media are baffled by this requirement.

When health is impacted by a precautionary approach to regulation, the problems are more serious. The precautionary principle is the idea that even if no scientific foundation exists, the unknown should be banned or strictly avoided “just in case.” This is a direct barrier to innovation. By contrast, countries and regulatory environments that use a cautious approach based on actual evidence will be the leaders in allowing innovation in a safe manner.

An example of this is vaping in Hong Kong. Even now that most developed jurisdictions worldwide have allowed the use of e-cigarettes and “heat-not-burn” alternatives as an alternative to smoking to save lives. Hong Kong is one of the few places that are moving to ban vaping.

While vaping has been regulated and permitted in most developed economies, and promoted as a harm-reduction strategy in Britain, its recent stay of execution from banning in the Hong Kong Legislative Council will be short-lived (the government will reintroduce the legislation in the next LegCo session). No actual research has been done here, as in the UK, but old-school “ban anything that looks like smoking” thinking prevails regardless of the latest data.

As we have learned during the Covid-19 pandemic, personal protective equipment cannot just be easily and quickly manufactured, nor can respirators or other life-saving medical devices. N95 masks, for example, require tight-fitting silicone seals, which prevent unwanted particles from entering the respiratory system of the wearer. These masks have proved critical to keeping essential workers safe and able to serve their patients.

Respirators and ventilators, which have saved tens of thousands of lives across Asia, also rely on silicone, popular for its durability, resistance to heat, and hypoallergenic properties. Regulations should be designed to recognize the enormous benefits of these and other similarly innovative products, for both public health and economic reasons.

Too often the bureaucrats promoting innovation have a megaphone, but no power. The regulatory regimes with the power to say no are dominated by cautious mindsets allowing old vested interests, inertia and precautionary thinking to rule the day. These built-in biases may be appropriate to manage the downward drift of a genteelly declining society, but they do not accord with the aspirations of young adults nor the stated aspirations of being a global leader in innovation.

Hong Kong needs to face down vested interests, prune away antiquated bureaucracies and adopt a decision-making process based on actual research and experimentation. The alternative is to see our best and brightest drift – nay, run – away to genuinely innovative shores.

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Andrew Work

Andrew Work is the executive director of the Self Storage Association Asia, representing and connecting this growing and thriving sector leading the real estate industry by providing lifestyle and business solutions for the 21st century. He is sought after for commentary in business, economics, technology, innovation and politics on matters concerning Hong Kong, Canada, and, more broadly, Asia.