I.T. Takes a Village

ERIC ELLIS Hong KongIn a boardroom high above Hong Kong's twinkling neons, several dozen cyber-entrepreneurs have gathered to brainstorm on harnessing the power of information technology to help spark Asia's economic recovery. For an hour the buzz is infectious. The 20- and 30-somethings swap e-mail addresses and big ideas in a supercharged atmosphere that is more Palo Alto than Hong Kong. Then Stephen Chan enters the room. Vice president of cyber-entrepreneur Richard Li's Pacific Century Regional Developments, Chan is here to sell the crowd on a $1.7 billion plan to build a Cyberport info-tech center on 26 hectares of reclaimed land on Hong Kong island. The government has awarded the project, without competitive bidding, to Li's firm.But as Chan describes the plan, the techies express disdain, dismissing it as just another property deal in a city whose business environment knows little else. A more appropriate name would be Cyber Villas, cracks Internet analyst David Webb, a former investment banker. The techies cringe when Chan proposes that the Cyberport's intellectual cluster be reserved for technology lites, with a screening committee to filter out inappropriate tenants. The approach seems to run counter to the anything-goes ethos that built California's booming Silicon Valley--and that characterizes the Netizens who live, work and play there. Says Hong Kong cyber-investor Nick Anthony, who is building an entrepreneurs' club of technology start-up companies: The world has moved on and we're stuck in the mud. We're not in the plastic flowers business anymore.

That's an apparent dig at the business empire of Richard Li's father, Hong Kong's legendary plastic-flowers-to-property tycoon Li Ka-shing. As the Li family well knows, Hong Kong is desperate for a new economic angle. But a clutch of government initiatives has failed to define a future for the territory. The Cyberport plan follows last year's massive stock-market intervention and talks (still continuing) with U.S. entertainment giant Disney to build a $3 billion theme park. Besides rankling Hong Kong's fledgling cyber-lite, the Cyberport has rival property developers and other critics complaining of cronyism. Meanwhile, the city languishes in a recession, with unemployment at a 20-year high. It's a reversion to type, says Stephen Brown, head of research at Kim Eng Securities. It shows what little inspiration there is in official circles.

PAGE 1|
Mired in recession, Hong Kong grasps at the dream that the building of a new theme park could boost the territory's sagging fortunes
--TIME Asia, March 15, 1999
If Hong Kong really does have a high-tech future, it could learn from the example of people like Mark Duff. The 32-year-old Bostonian co-founded Asia's first online brokerage, boom.com, from a small flat in the territory's crowded Causeway Bay. Duff thinks Hong Kong can help foster the creation of would-be Netscapes and Yahoo!s, but not by erecting Cyberport's slick, fiber-optic-cabled office buildings. Instead, he thinks the territory should make available sites like an abandoned warehouse in North Point that's due for demolition but could be cabled and refurbished quickly and cheaply. Says Duff: Theoretically we can operate anywhere.

To Richard Li, that's not the point. Cyberport will not be a technology incubator, he says. We will be bigger and better than that. A Stanford computer engineering graduate who launched Star TV and sold it profitably to Rupert Murdoch in 1993, Li, 32, sees Cyberport as a mini-California that will draw foreign knowledge workers and galvanize local talent. This project moves me--I would do this for free if it covered my cost. Hong Kong missed technology's hardware phase and we have probably missed the software phase, but we must not miss the service phase of e-commerce and the Net. Li says multinational companies like Oracle, Microsoft and Intel have expressed interest in the project. Cyberport, he says, is not, repeat, not a property development.

Skeptics, however, note that 75% of the site is designated for luxury apartments and that the project will take at least two years to complete--an eternity in cyberspace. Moreover, Hong Kong's notoriously high costs and worsening pollution may make it difficult to compete with other Asian countries for high-tech brain-power. Says Jeremy Tromp, who runs an online company in Hong Kong that brokers Asia's distressed inventory to Western buyers: If the Philippines gives me reliable lines and bandwidth, why suffer Hong Kong's high prices and bad air? Whether Cyberport can make up for such deficiencies won't be clear for at least two years.

|2
Mired in recession, Hong Kong grasps at the dream that the building of a new theme park could boost the territory's sagging fortunes
--TIME Asia, March 15, 1999