Original title: "Will NFT, metaverse developments in Hong Kong help deliver the city』s next 『Octopus moment』 in a post-pandemic world?"
Compilation of the original text: Peter Pan @BlockBeats
Compilation of the original text: Peter Pan @BlockBeats
【Editor's note】
Many people have said that Hong Kong, China, has been in the technology industry for more than 20 years, and it has been missed for more than 20 years. The reason why it is said to be "missed" is that Hong Kong is not incapable of innovation.
In September 1997, the Octopus card in Hong Kong was launched, and it quickly became the most popular electronic payment system in the area, and it also became a symbol of the city's ability to cultivate innovative technology.
But in the era of mobile Internet, Hong Kong launched Talkbox, a voice IM application, before the mainland, but it was completely surpassed by WeChat in the end; in the more recent era of artificial intelligence, the famous AI unicorn Shangtang Technology was originally led by Tang Xiaoou in Hong Kong. The Chinese University School of Engineering team was established, but later SenseTime chose to take root in Shanghai. Not only that, universities such as the Chinese University of Hong Kong and the Hong Kong University of Science and Technology are also sending a large number of talents to enterprises and academia every year.
The sluggish development of Hong Kong's technology industry was initially blamed by some on the failure of the "Silicon Harbor Project" around 2000.
In October 1998, Tung Chee-hwa, then chief executive of the Hong Kong Special Administrative Region of China, proposed in his second policy address after taking office that Hong Kong should be revitalized by science and technology, and that Hong Kong should be developed into an international innovation and technology center. However, this project has not been able to advance. On the one hand, it is because the government has very little voice in granting land, and on the other hand, it also includes the United States at that time restricting the export of semiconductor manufacturing equipment to Hong Kong.
But these reasons are obviously not enough to explain the later problems. In the upsurge of the mobile Internet and the rise of AI, many companies are latecomers who only started to develop around 2010. The failures in these fields are mainly due to factors such as high labor costs in Hong Kong, lack of capital attention in the technology field, and imperfect industrial chains and markets.
Wang Tao, the founder of the Shenzhen drone company DJI, said when the third Chief Executive Leung Chun-ying came to investigate and asked whether DJI would move to Hong Kong: "The best division of labor in the world's industrial chain is in Shenzhen. The best engineers are in Shenzhen, where the cost of starting a business is very low, and Shenzhen has the best industrialization system, DJI is inseparable.”
In addition, Hong Kong's real estate industry, financial services industry, trade and logistics industry, and tourism account for 60% of its GDP, resulting in insufficient capital attention to technology. For example, although SenseTime's face recognition technology was born in Hong Kong, it relied on the mainland for the capital and market it grew up with. How should Hong Kong break the situation and catch up with the lost more than 20 years?
However, now, Web3 industries such as NFT and Metaverse are developing rapidly in Hong Kong, and a new batch of start-ups led by digital technology has gradually emerged. The city may usher in its next "Octopus moment". Last year, SenseTime also returned to Hong Kong and listed on the Hong Kong Stock Exchange. The stock price rose by more than 23% on the first day, which surprised the market.
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The "Octopus Card", a symbol of technological innovation
When the "Octopus Card" was launched in September 1997, the homegrown electronic payment system became the most high-profile high-tech application in Hong Kong, making it one of the most prominent high-tech applications in a world-class infrastructure, rule of law, and business-friendly environment. A symbol of what can be achieved in a city with policy and an ever-expanding tech talent pool.
According to the Octopus card operator, the widespread acceptance by the public has led to the successful expansion of the use of the contactless smart card from the city's public transport network to parking facilities, tunnel tolls, schools, retail, and even residential and commercial use Building access control, etc. Since then, the technology has also been adopted by various projects in the mainland, the Netherlands, the UAE and New Zealand.
Even when there are other e-wallet options in the market, most Hong Kongers (70% of about 6.3 million eligible residents) chose the Octopus digital payment platform last year to store their government-provided HK$5,000 spending vouchers. As of December 31, 2020, there were approximately 30.4 million Octopus cards in circulation in Hong Kong.
Citizens swipe their Octopus cards at the Sham Shui Po MTR station to receive the latest batch of consumer coupons from the Hong Kong government
However, after nearly 25 years, the hope of Hong Kong's next "Octopus Moment" has never been realized again.
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COVID-19 Accelerates Web3 Industry Expansion
Still, some research in Hong Kong's tech sector suggests a new wave of digital-led firms could gain ground following the rapid growth of companies such as artificial intelligence company SenseTime and freight logistics service provider GoGoX Holdings (formerly GoGoVan) in recent years. Break through and become a new mark of the city.
More recently, Yat Siu, co-founder and CEO of Animoca Brands, a major video game and venture capital firm headquartered in Hong Kong's Cyberport, also said that Hong Kong's tech industry has shown some exciting innovations.
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Animoca Brands, Hong Kong's Newest Tech Unicorn, Bets on Video Game NFTs
“During the COVID-19 pandemic in the past few years, industries related to the Metaverse and Web3, including NFTs, have taken off. Many new startups have emerged in this field, and they are making progress in areas such as Play to Earn, virtual real estate, and e-sports. thriving,” added Yat Siu.
The Metaverse is an immersive virtual world where people's digital identities can interact with each other as they would in real life. Web3 is a new version of the World Wide Web based on decentralization and blockchain, the digital ledger technology behind cryptocurrencies like Bitcoin.
NFT is a unique string of blockchain registration data that represents digital file ownership. Therefore, NFTs are considered valuable because people can buy and trade these digital assets like physical objects.
"NFT represents the future of digital property and metaverse," Siu also said, "This space is still very young, and there are many opportunities for anyone with enterprising spirit. This is the best thing people should consider when developing their careers and exploring new ideas." one of the fields."
In addition, Casey Lau, co-founder of StartupsHK, a Hong Kong startup community with about 5,000 members, also expressed his bullishness on this field: "Overall, I think Web3 is exciting and will eventually touch every industry."
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NFT and Metaverse business booming in Hong Kong
Web1 was the earliest version of the internet, developed at the initiative of the US government's Defense Advanced Research Projects Agency. Meanwhile, Web2 describes the current state of the internet, with more user-generated content and ease of use.
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Degenerate Ape Academy, a popular NFT project on the Solana blockchain, rented advertising space in Central during the recent Christmas and New Year holidays to promote their NFT
Additionally, the Hong Kong-based Metaworld Development project launched in March to attract people to invest in NFTs. These NFTs are expensive virtual lands created on Metaverse platforms Decentraland and The Sandbox, and the Metaworld team's strategy is to trade portfolios of virtual lands, lease them out to major brands, and then distribute capital gains to NFT holders.
In the same month, the "South China Morning Post" announced that it had divested its blockchain-based NFT business and independently established a new company called "Artifact Labs" to transform the art, photos and content of Hong Kong's 118-year-old English-language newspaper into tradable The NFT. As an independent entity, Artifact Labs also helps turn the property of other organizations, including schools and museums, into digital collectibles.
Among them, the original collectible item, the "1997 Premium Collection," which was developed using a blockchain metadata standard called ARTIFACT, hit $126,000 in sales in March. The standard is designed specifically for historical and archival NFTs, built on the Flow blockchain, and a second series of the same NFT sold out in just over two hours in April.
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According to data from the blockchain data platform Chainalysis, the sales of the global NFT market in 2021 will exceed 40 billion U.S. dollars
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Investment risks are increasing, and the industry urgently needs supervision
On the other hand, Paul Haswell, a partner at Hong Kong-based international law firm Seyfarth Shaw, said, “While Web3 and the metaverse are expected to have an impact on potential local innovation and the development of the Internet more broadly, there are other businesses that need funding and Government support.” Previously, Paul has been advising technology companies.
“The tech industry in Hong Kong operates on two levels.” Paul added, “There are some gorgeous new technologies like NFTs and the Metaverse, the space is generating a lot of new investment, and there are innovators who are trying to change how we do business ways to protect our health and enhance our lives.”
“However, before investing in an NFT of a cat, also consider investing in a new health tech start-up or a company looking to fight climate change.” Also, “Instead of using NFTs to sell pictures of apes, think about how you can leverage them.” To revolutionize various recording systems and even property transactions in Hong Kong.”
At present, the growing interest in NFTs and virtual worlds has made the field a fertile ground for fraud and scams, with little recourse for victims and regulators who have been unable to keep up with the rapid market development.
In February, though, risks involving NFTs and the Metaverse were identified as one of the top security threats to watch this year, according to the Hong Kong Computer Emergency Response Team Coordination Centre, a government-run cybersecurity watchdog. The warning says criminals could steal sensitive user information or access their accounts to steal wealth, whether it's where the assets are traded or stored.
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The problem of brain drain is highlighted, and the economy will usher in recovery after the epidemic eases
In addition, there is a growing shortage of skilled labor in Hong Kong's labor market, and there is a constant loss of talent, especially in the field of technology. Some businesses have been struggling to cope with a brain drain amid the latest wave of immigration, with nearly two-fifths of companies already having their operations adversely affected, according to a survey by the Hong Kong General Chamber of Commerce.
Last year alone, about 40,000 Hong Kongers applied to the police for a certificate of no criminal record, an important requirement for immigration to Canada, the United States and Australia, and the last time such a high number of applications was in 1989. In addition, according to data from the Canadian Immigration, Refugees and Citizenship Bureau, 3,444 Hong Kong people have obtained permanent residency in the country in 2021, more than double the number before the epidemic in 2019 and 15 times the number in 2010.
“Brain drain is Hong Kong’s biggest long-term challenge,” says Animoca’s Siu. “Right now, the city is still restricted in travel activity, while the rest of the world is opening up, allowing people to do business, and ultimately diversity and creativity. The loss of Hong Kong will affect every aspect of Hong Kong's business, culture, education and society."
Outgoing Hong Kong Chief Executive Carrie Lam has similarly expressed concern, saying in March that strict anti-epidemic restrictions had led to an exit of business talent and that an exodus of expatriates would force more and more companies to operate overseas. Find new talent.
However, Seyfarth's Paul said: "As the epidemic is gradually brought under control, we also need to think about how to minimize losses. At that time, investment in the Greater Bay Area and the northern metropolis plan may help encourage talents to return to Hong Kong."
At present, there is still little discussion about the advantages of emerging industries such as NFT and Metaverse compared with traditional industries. This may also be a major obstacle for Hong Kong to usher in another "Octopus moment".
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