Adaptive entrepreneurship and the economic development of Hong Kong

Abstract

This paper examines the role of entrepreneurship in the economic development of Hong Kong. It argues that the dynamics of Hong Kong's economy are attributed largely to adaptive entrepreneurs who are alert to opportunities, maintain a high degree of flexibility in their production and respond rapidly to change. In the manufacturing sector, adaptive entrepreneurship is manifested in the forms of product imitation, small-scale enterprise, subcontracting and spatial arbitrage. Using these entrepreneurial strategies, Hong Kong manufacturers have learnt from foreign firms and imitated their products. By selling improved commodities at lower prices, they compete against the original suppliers from overseas. Furthermore, to exploit new profit opportunities, Hong Kong's entrepreneurs have shifted their production activities from one product to another, from one industry to another, from higher cost to lower cost regions, from traditional fishing and agriculture into manufacturing, and then to finance and other services. Their efforts have brought about structural transformation in the economy and have enabled Hong Kong to catch up with economically more advanced economies.