In Hong Kong the HKUST MBA Unleashes Entrepreneurial Spirit

This article is sponsored by Hong Kong University of Science and Technology. Learn more about the Hong Kong University of Science and Technology’s MBA Program. 

For those with an entrepreneurial bent, Hong Kong offers unrivaled economic freedom; yet, it’s also a place potentially full of disappointment for anyone clinging to a carefully calibrated career path. That’s why Hong Kong University of Science and Technology’s MBA program director, Sean Ferguson, warned in a recent interview with Forbes that, “This region isn’t always cut out for everyone. If you’re looking for a kind of US MBA with a cookie cutter rotational program, this region is not for you. But if you’re taking the long term view and you’re thinking about where your career will be 5, 10, 15 years down the road, I think this region is unrivaled.”

The youngest of Hong Kong’s eight statutory universities, HKUST was founded in 1991. Hong Kong sits at the center of the Asia-Pacific region, some 1200 miles from Beijing and 1600 miles from Singapore – less than five hours flight-time from half of the world’s population. With its unique history and culture, the island is often seen as a crossroads where East meets West. This is why many believe an MBA in Hong Kong is more than an education; it’s also a gateway to China’s dynamic marketplace.

To outside observers, Hong Kong is an ideal capitalist experiment. It is a place where regulations and taxation are minimal and the opportunities for success unparalleled.

The Hong Kong economy has enjoyed consistent growth with its GDP climbing by an average of 1% annually since 1990. This is more impressive considering those dates include the period when its control passed from the British to the Chinese, and the Global Recession. Although both events were recessionary, the region recovered quickly.

Hong Kong’s unique identity was forged in the aftermath of the Opium Wars, in 1841, when it was established as a British Crown Colony. Even after Great Britain ceded control to China, the island has followed English Common law. Today, Hong Kong is maintained as a Special Administrative Region and is self-governing on a day-to-day basis.

When control of Hong Kong returned to China, the island’s uniqueness was preserved under the ‘one nation, two systems doctrine’. Worries that China would merely absorb the island into its larger system proved largely unfounded. After all, the Hong Kong economy was the proverbial golden goose – one whose eggs were not just valuable but delicate. The government moved cautiously, in part because the year China took control of Hong Kong the island accounted for over 15% of its GDP.

Today, Hong Kong seems less economically significant, representing less than 3% of China’s GDP. Yet, this diminished contribution doesn’t reflect Hong Kong’s decline, but rather China’s ongoing embrace of many of the free market doctrines that fueled Hong Kong’s success. The nation’s transition to its own free market economy and liberalized trade has marked its upward ascension. On the mainland, state-owned businesses are being sold to private investors, small businesses are encouraged to grow and the economy is less and less reliant upon the inexpensive exports which fueled its growth through the first decade of the millennium.

Although China has slowed some promised democratic reforms, including recently ruling out democratic elections for Hong Kong in 2017, the chairman of the Institute for Global Economic Growth argued in The Washington Times that this probably won’t affect the Hong Kong economy. “Hong Kong proves that you do not need to have democracy for prosperity and economic (and most individual) freedoms,” Richard W. Rahn points out. “In fact, democracy is often an impediment to economic prosperity because people tend to vote themselves benefits (which must be paid by someone else) rather than working for benefits as most people do in Hong Kong.”

Hong Kong’s 7.3 million people live on one of the most densely populated places on earth, an island that has been welcoming visitors from around the globe for decades. Most of its natives were newcomers here just a few generations ago. Its currency is the eighth-most traded in the world.              

Long before the Asian Tiger (Hong Kong, Singapore, Taiwan and South Korea) economies of Southeast Asia gained attention, Hong Kong was experiencing unrivaled economic growth. Although numerous reasons for this are cited, one is mentioned the most – economic freedom.

Begun in 1994 by the Wall Street Journal and The Heritage Foundation, a Washington D.C. based think tank, the metric is controversial but widely cited when explaining the island’s success. The chart of economic freedom examines everything from a country’s level of taxation and regulation to how free governments are from corruption. As noted on The Heritage Foundation’s website, Hong Kong has “effectively navigated global booms and busts… over the past two decades. A high degree of market openness, as measured by trade freedom, investment freedom and financial freedom has been complimented by a transparent regulatory environment and a competitive tax regime.”

Hong Kong’s economic freedom was no accident. It took a government that made sure risk takers could be rewarded, so businesses both large and small could flourish. It is in this economic laboratory where many MBA students sink or swim.