Hong Kong’s corporate leaders want to invest more in new technology and embrace the sharing economy

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Finance executives in Hong Kong are optimistic about the city’s economic growth, according to the annual American Express Global Business and Spending Outlook. The findings support the Hong Kong government’s prospects for a strong economic climate throughout the rest of the year.

While the overwhelming majority (93%) expect substantial or modest economic expansion in Hong Kong, (compared to 85% globally), many Hong Kong executives (87%) are concerned that an unanticipated event related to economic, political, social, or environment issues could have a negative impact on businesses.

When asked about business priorities, 77% of business leaders said “better meeting customer needs”. This was followed by “remaining competitive with other companies” (43%) and “improving financial returns to owners or shareholders” (43%).

“Business leaders in Hong Kong are bullish, but there is an underlying sentiment of concern. With rising living costs, ongoing debates on minimum wage, and disruptions from technology, companies should focus on people – catering to the evolving demands of customers and meeting the expectations of employees to create a better work culture where they can thrive. These will be vital to weathering tough climates and remaining competitive,” said Stephen Pendergast, Vice President & General Manager - Global Commercial Services, Hong Kong & Taiwan at American Express.

More than half (57%) of Hong Kong respondents said raising wages or salaries would be the first step towards attracting and retaining employees in the coming year, a figure well ahead of the global average (37%) and a positive step in light of the growing debate on minimum wage, set for renewal in May 2019. Other improvements included:

  • Expand career development opportunities, such as relocation and geographic rotation opportunities (50%)
  • Allow flexible work arrangements, such as flexible scheduling and remote work (47%)
  • Improve healthcare, family leave or medical benefits (43%)
  • Improve retirement benefits (37%)

Embracing the concept of the sharing economy

The majority of respondents (83%) said that the “sharing economy” will have a substantial impact on their industries within the next five years. Seventy-seven percent (77%) of interviewees also said their companies are likely to develop offerings based on sharing economy innovations during the next five years; and 62% said the sharing economy could boost the city’s competitiveness.

The sharing economy has been under heated debate in Hong Kong, with some saying the city has been slow to embrace the new economy. Last August the University of Hong Kong’s Public Opinion Programme commissioned by the Sharing Economy Alliance showed that while Singapore and Seoul scored the highest in the category for developing innovation and technology (3.8 points out of 5), Hong Kong scored an average of only 1.9 points.

“Our findings suggest that we need support and leverage the industry groups created to drive innovation and ensure that Hong Kong maintains its competitive edge, because they are the incubators for potential partners as companies seek to digitize and modernize operations. It’s also equally important that we embrace government policies that support these investments,” Mr. Pendergast added.

Rising investment in technology

More than half of the respondents (53%) chose enterprise-level IT systems as the leading investment category for the coming year. In line with this finding, IT and management staff were identified as the top priorities for hiring and retention across all sectors.

However, the survey also showed that technology often causes internal conflict. The survey showed that use of technology was the top source of conflicts and disagreement among age groups within the workforce (73%), followed by communication style (63%), work-life balance (50%), work ethic (43%), and willingness to collaborate and work as a team (33%).

“Companies are embracing technology at the strategic level, but more work is needed to ensure that it is adopted and embraced throughout the company,” Mr. Pendergast said. “First, managers need to be ambassadors and clearly communicate how the new technology will better meet customer needs and make their lives easier. Second, internal communications need to be more fun and engaging, and continue beyond the launch of the new technology so that employees can ask questions, share success stories, and feel supported throughout the time.”

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