Hong Kong and Taiwan can be considered to be rather similar both culturally and commercially. In terms of culture, both take pride in inheriting ancient Chinese cultural practices such as practicing martial arts and drinking Oolong tea and both highly respect the elderly. In a commercial sense, there are more than 400 weekly flights between Taiwan and Hong Kong, making that route one of the top 10 busiest commercial airline rouses in the world in 2011. Furthermore, after the 2008 financial crisis, both economies started to look out for a new model of development that integrates innovation with broader social needs.
The World Economic Forum categorises both countries as economies that have reached the third state of economic development, the so called “state of innovation-driven growth”. Even though both economies possess a highly developed social welfare system, there is still room for improvement, especially in addressing issues of economic access and social inclusion. In the past few years, there was an increase in the number of social entrepreneurship conferences and speaker series, creating platform for discussions and knowledge sharing. Social entrepreneurs have realised that a common issue they are facing is the lack of communication between grass-root organisations and governmental agencies, shortages of socially-minded business practitioners and difficulties in aligning social and business visions.
Experts suggest the following three strategies how Hong Kong and Taiwan could increase collaboration and become Asia’s top social innovation hubs.
1) Co-operate to expand and grow
Both countries have a rather small population (Taiwan – 23.2 million; Hong Kong – 7.4 million) which has been a major barrier for social enterprises in both locations as it makes it highly difficult to successfully achieve scale. According to the law of comparative advantage, social enterprises in both markets could explore opportunities to sell products and services in each other’s markets, effectively increasing the size of their respective markets. Moreover, social enterprises should look into the opportunity to co-operate in production and marketing.
2) Co-learning for knowledge accumulation
Despite their numerous similarities, Hong Kong and Taiwan are had quite different paths of development during the last century. While Taiwan was colonised by Japan for 50 years before starting its own developmental path, Hong Kong was ruled by the British for over 100 years. Therefore, Hong Kong developed a social innovation model with strong British influence whereas Taiwan’s social innovation model is characterised by Japanese influences. By being willing to learn from each other, Hong Kong and Taiwan could blend best practices from the east and west and accumulate a wealth of knowledge on social innovation. To enable this, both regions should open up their social co-working spaces for example by collaborating on social projects and hosting each other’s social innovators.
3) Cross-investing to diversify portfolio
Social investing and venture philanthropy are much more developed in Hong Kong than in Taiwan. It is therefore not surprising, that Hong Kong ranks number 1 in the financial market development and possesses one of the most efficient financial services sectors in the world. Even though the Taiwanese society is known as being generous when it comes to charitable donation, the idea of investing in social-purpose businesses is still not widespread. Experts suggest that social investors in Hong Kong should start looking into investment opportunities in Taiwan in order to diversify their investment portfolio and provide Taiwanese social entrepreneurs with a new source of funding.
Overall, the social innovation sectors in both Hong Kong and Taiwan are booming! It is believed that with collaborative efforts from both sides, the two economies can soon become Asia’s leading social innovation hubs.