Entrepreneurship and Economic Development in Hong Kong

Entrepreneurship and Economic Development in Hong Kong

Entrepreneurship and Economic Development in Hong Kong

Entrepreneurship and Economic Development in Hong Kong

Synopsis

This is the first systematic study of the nature, operation and contribution of entrepreneurship to the growth of Hong Kong. The author argues that the success of Hong Kong is attributable principally to adaptive entrepreneurship.

Excerpt

This chapter examines the role of entrepreneurship in Hong Kong’s manufacturing industry. In particular, it attempts to demonstrate that in exploiting profit opportunities Hong Kong manufacturers have adopted Kirznerian entrepreneurial strategies in the form of small-scale enterprise, product imitation, subcontracting and spatial arbitrage.

HONG KONG’S INDUSTRIAL STRUCTURE

Hong Kong’s industrialisation began in the early 1950s. After the communists took over mainland China in 1949, a large number of immigrants and refugees moved into the Colony. Many of them were entrepreneurs from Shanghai. They brought capital and skill with them and built Hong Kong’s first spinning mill. The new textile industry expanded. In the early 1950s there were only 26,300 workers in the textile industry employing about 35 per cent of the total labour force in the manufacturing sector. By 1960 employment had risen to 61,800 (Youngson 1982, p. 11).

Apart from textile manufacturing, other industries such as metals, plastics, artificial flowers and wigs had also developed. During the period from 1948 to 1965, two-fifths of the Hong Kong labour force was engaged in manufacturing activities. By 1967 there were more than 11,000 factories reported at the Labour Department. It was estimated that between 1950 and 1964 industrial output rose at an average of at least 3 per cent per year (Brown 1971, p. 8).

The development of Hong Kong’s manufacturing industry can be seen in Table 4.1. The manufacturing industries exhibited an impressive annual growth of approximately 45 per cent in the decade 1973-83. However, the annual growth rate slowed down to only 10 per cent for the period 1983-91. Textiles, clothing and electronics are still the leading industries. In 1991 they accounted for more than half of the economy’s gross manufacturing output. The share of the textile output has declined over the last twenty years but the electrical and electronic industry in 1991 maintained a share of approximately 25 per cent of the economy’s gross manufacturing output (Table 4.1).

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