One out of seven in Hong Kong is entrepreneur

More than one out of every seven in Hong Kong was entrepreneur, a study on entrepreneurship released yesterday by a local university showed.The study by the Chinese University of Hong Kong found that the SAR territory's early-stage entrepreneurial activity index, measured as starting up new business, to be 10 percent, ahead of Tokyo's 2 percent and Singapore's 6 percent.But the figure was "yet still far behind that of China as a whole, which recorded an early-stage entrepreneurial activity index of 16.4 percent, researchers said.

Put together with Hong Kong's already established business rate of 5.4 percent, however, it means 15 out of 100, or more than one out of seven, in Hong Kong were entrepreneurs, said the report.The study was part of the Global Entrepreneurship Monitor, an international consortium founded by Babson College and the London Business School in 1999 with over 200 scholars to measure entrepreneurship worldwide."From 2002 to 2004, Hong Kong's annual entrepreneurial activity rate was only 3 percent, which was among the world's lowest.

It is not surprising entrepreneurial activities have grown significantly when we consider the low level of confidence and few perceived business opportunities in the uncertain years from 1999 to 2004," said Professor Hugh Thomas, director of the Center for Entrepreneurship at the Chinese University of Hong Kong.A typical entrepreneur in Hong Kong would be male, between 25 to 34 years of age, well educated and well-off, he said, adding that 55 percent of the entrepreneurs would have previous experience in starting up business.

"It is interesting to see more educated people join the echelon of entrepreneurs. This indicates that Hong Kong entrepreneurs are starting a business to pursue an opportunity rather than being forced by necessity," Thomas said.The study also showed new enterprises in Hong Kong were overwhelmingly service-oriented, with consumer services and business services accounting for 59 percent and 18 percent respectively.In terms of financing, 43 percent of the entrepreneurs planned to fund the startup completely on their own savings while 57 percent said they would find formal or informal investors, which means one out of 12 adults in Hong Kong was an informal investor, which was higher than the GEM average."HK business has been associated with high levels of entrepreneurial activity for a very long time, owing to the people 's high level of skill and flexibility.

Also, setting up a new business is both fast and relatively inexpensive. On the other hand, downsides are the high costs in HK, the small local market and highly fragmented regional markets, which hinder growth," said Toby Marion, chair of the entrepreneurs committee of the American Chamber of Commerce.

HK would do well to provide courses in how to set up a small business, he added.

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