The difficulties of startup companies in Hong Kong are well-known but many are easing their plight by seeking strong ties across the boundary with the

 

Chinese mainland. Wang Yuke reports.

 

Towards the beginning of his career, one of the first big challenges confronting Rex Sham was how to start a forest fire without getting arrested. Sham wanted a career in the automatic risk detection management market - a relatively young and sparsely-documented industry in 2009. The only thing he could find on the subject online were study reports by the World Bank, NASA and journals published by Stanford University.

 

Sham and his partner followed what has become conventional wisdom among Hong Kong entrepreneurs and established strong links with the Chinese mainland. The duo spent two years handpicking experts from the mainland to help the company develop and expand.

 

Still, being able to find participants willing to be experimented on wasn't easy. Building a fire detection system offering practical value meant the apparatus had to be field tested in a real-life scenario. And then Guangdong Forestry Administration stepped up, showing an interest in collaborating. A swathe of about 250 acres of forested land was earmarked for a field test.

 

The wholehearted support provided by the mainland authorities was pivotal in launching Insight Robotics - a forestry-focused risk management company - says Sham, now the organization's CEO.

 

Symbiotic relationship

 

Such collaborations between Hong Kong and mainland China have, time and again, brought together talented individuals and institutes who have used their respective strengths, playing complementary roles in the technology development field.

 

Hong Kong enjoys a free flow of information in a multi-lingual setting and close contact with the West. Local developers are readily able to keep up to date on new developments, and come up with new ideas that appeal to the global market, said Frank Tong Fuk-kay, chief executive officer of the Hong Kong Applied Science and Technology Research Institute (ASTRI).

 

At the intermediate and final stages of development, the mainland can furnish a large pool of engineering talent, trained at top mainland universities, who can bring the innovations to market.

 

That's just the beginning, as far as Tong is concerned. To his knowledge, the central government has played a key role in providing support for innovative technologies, including research grants and technical support. That way, developers can give full expansion to their imaginations and they don't have to shell out the entire cost from their pockets.

 

That's the foundation of the current conventional wisdom. Insight Robotics was the first company to use a combination of thermal imaging technology and advanced image analysis system to ensure early and accurate wildfire detection in low visibility areas.

 

Analysts captured and recorded data, phase by phase from the point of ignition. They observed how the fire developed and spread to the threshold of becoming a raging inferno. Programmers applied mathematical modeling to the real-time data, on the heat generation, the color of the flames, size of the fire, and the content of emissions. From this information the engineering team was able to establish an algorithm so that the system could distinguish real fires from false positives created by passing cars and airplane.

 

Each wildfire detection unit maintains a constant 360 degree scan. Each unit is equipped with advanced thermal imaging sensors capable of detecting wildfires within minutes, recording changes in temperature, humidity and distribution of airborne gases. Thermal imaging cameras detect infrared emissions which are used to calculate the actual temperature of the fire. The higher the infrared emission, the hotter the fire. The wireless sensor alert a central command, a robotic vehicle establishes the precise location of the blaze and firefighters are dispatched.

 

Starting a fire

 

All this would entail immense challenges for a fledgling company. The forestry department however, helped arrange another on-site trial of the system, shortly after the researchers unveiled their prototype. The second trial was run alongside a planned fire drill in Zengcheng, orchestrated by the Guangdong fire department, to test firefighting techniques involving aircraft and ground-based crews.

 

More than 600 firefighters from a dozen cities across the province were deployed to fight the fire, applying standard practices of the cities where each team worked. "That's valuable experience for us. We gained a better understanding of firefighters' routines and varied standards in terms of forest fire management. It helped us with prototype advancement since we would take those factors into consideration," acknowledged Sham.

 

The trial went ahead. The forestry officials liked what they saw and arranged to increase the R&D funding for Insight Robotics. The innovative system also caught the attention of the National Development and Reform Commission which subsequently granted additional funds worth 500 million yuan ($73.76 million) to support the research of the fire warning system.

 

The concept of fire early detection system spread across the country quickly, with many major cities planning an open bid to select the most reliable detection system. In a bidding hosted by Jinan, Shandong province, Insight Robotics won the tender after demonstrating it can detect minor flames within a five-mile radius that no other eight bidders managed to do. Besides, their equipment was the cheapest. The Computer Vision Wildfire Detection System has been used by more than 10 forestry and local government agencies in five provinces and seven cities across the mainland.

 

Having made its mark on the Chinese mainland and built up its credibility, it soon gained much attention from angel investors in Hong Kong. It drew $2 million of angel investment and venture capital combined. Without the cooperation with mainland authorities and companies, says Sham, the young startup would have had a hard time attracting investment from Hong Kong companies and individual investors who are inclined to play it safe.

 

"It's much easier for researchers and entrepreneurs to get R&D funding in mainland. It all comes down to the top-down approach in funding allocation adopted by the central government," said Tong.

 

All set to go 5G

 

He highlighted that ASTRI just began to cooperate with 21Vianet, a major carrier-neutral internet data center service provider on the mainland, to conduct R&D and field trials in a 5G test bed, aiming to launch the next generation mobile network.

 

21Vianet has agreed to let ASTRI use its high speed wireless technology in Hong Kong free of charge to conduct field trials from now to March 2019. The test phase will take Hong Kong a step closer toward building an infrastructure for the 5G mobile network to be in place by around 2022, said Tong. The 5G network promises processing speeds 100 times faster than the existing 4G network. The technology is considered a critical component in the evolution of Hong Kong's smart city initiative. Tong acknowledged that the Chinese mainland is at the forefront of developing 5G technologies. Managing Director of 21Vianet, Andrew Lee, also remarked during the Memorandum of Understanding signing ceremony that ASTRI has a strong team on mobile wireless technologies and sound patent portfolio in 5G wireless technologies.

 

He adds that the mainland places a premium on education in engineering and therefore has produced a wealth of engineering professionals. Mainland universities can supply engineering specialists for Hong Kong R&D centers as well as startups, helping to address technical problems that they may encounter during technology transfer. "Every year almost half of the university graduates from the mainland are engineering students, around 125,000, whereas Hong Kong has only 3,000."

 

Cross-border interaction will result in more mainland-based companies managing to set up branches overseas and also increase the penetration of international enterprises in Chinese market. However, before that, we need to clear up some hurdles, argues Horris Tse, co-founder and strategy director of WeMine, a 2-year-old startup specializing in helping international companies break into Chinese market and vice versa.

 

The two sides lack uniform frameworks and regulations when it comes to starting up businesses, said Tse. His own experience tells him that registering and opening a company in Hong Kong takes three to five days, while it'd take a foreign-capital enterprise 45 days to three months to get through all procedures before settling in the mainland.

 

Tse said he had a customer, a foreign company selling wholesome food and nutrients, striving to open a store in mainland. The company was confronted with the complicated health food registry regulations and lengthy procedures. "Although the foods it sells meet international and Hong Kong standards, some of them are insufficiently qualified according to the mainland framework. The company had to apply for a National Healthy Food Index Number for each product from scratch, which takes between half a year and one year and costs from hundreds of thousands to a million yuan.

 

All the troublesome factors dampen foreign business owners' confidence and passion for expanding their business to the mainland market, argued Tse, saying that it's imperative to establish a set of uniform frameworks or regulations applicable to both sides.

 

Charles Ng, associate director-general of InvestHK, is upbeat about the prospect of cross-border partnership in innovation industry. "Shenzhen and Dongguan (two neighbor cities of Hong Kong) are equipped with fast-prototyping techniques and are capable of mass producing. Hong Kong has an unrivaled international airport that ensures massive amount of prototypes or products to be delivered to any foreign country within 48 hours," said Ng, expecting more businesses to spring up and flourish here as well as in the Chinese mainland. He painted a rosier picture, "The opening of Guangzhou-Shenzhen-Hong Kong Express Rail Link will not only connect the two sides closer but also open a window for more business opportunities."

 

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