Innovation for Hong Kong's Upward Social Mobility

26 3.4.3 Political chaos and economic recession: Beginning in June 2019, a series of protests and social unrest led to conflict and violence that attracted global attention to Hong Kong, which led to a severe economic recession and hindered industrial activities. Due to social incidents, certain pillar industries such as retail, catering and tourism have been severely hit. Various large and successful events held in Hong Kong in the past have been postponed or cancelled, including the National Day Fireworks Display, the Hong Kong Tennis Open, the Hong Kong Food and Wine Tour and the Hong Kong Formula E-Prix, etc. This was followed by the global outbreak of COVID-2019, the closure of passes in 2020 and external uncertainties, which resulted in a 3.4% decline in the economy in Q3 2020 compared to the previous year, marking the fifth consecutive recession in a quarter. 66 This not only brought difficulties for start-ups starting business in Hong Kong, but also affected the business of industry leaders and corporate groups. Compiled by the Hong Kong Productivity Council (HKPC) in September 2020, the Standard Chartered Hong Kong SME Leading Business Index, sponsored by Standard Chartered Bank (Hong Kong), fell to 31.4 in Q4 2020, the lowest level since the index was first published in Q3 201267. Although the government has launched three rounds of economic stimulus funds of HK$22.5 billion from Q2 2020 to alleviate corporate operating conditions and reduce the risk of large-scale unemployment and recession, Hong Kong’s economy has not shown any positive signs, and both businesses and citizens are focusing on reducing operating and living costs. In view of the difficult conditions of the political and economic environment, Hong Kong needs to work hard to develop the new economic growth area of technology and innovation industries and create a friendly innovation environment, so that the society can regain new impetus. 66 Gross Domestic Product and its major components, Hong Kong Economic Situation. (n.d.). Hong Kong SAR Government. https://www. 67 HK small businesses struggle amid social unrest . (n.d.). chinadailyhk. 3 Challenges for the Development of Hong Kong’s Technology and Innovation Industries