David’s epic victory over Goliath, the giant, has shown that even an underdog can have his or her day when fighting bigger, more powerful opponents. The same principle applies to Hong Kong’s healthcare companies when they step into the global healthcare field that knows a number of giants.

Recently, the Hong Kong Productivity Council and the Hong Kong Bio-Med Innotech Association released a research report on the development of Hong Kong’s healthcare industry with details of the nature of the business and the size of healthcare companies in Hong Kong and the mainland side of the Guangdong-Hong Kong-Macao Greater Bay Area. The findings are of great reference value. Unsurprisingly, most healthcare companies in Hong Kong are “Davids” rather than “Goliaths” when it comes to business turnover and staff numbers. Sixty percent of researched Hong Kong companies have an annual turnover of $5 million or less and only 20 percent of them have a turnover bigger than $10 million. The staff figures are even more revealing. Forty-three percent of researched Hong Kong companies have a workforce of 10 people or less. Only 8 percent of them have a staff complement from 101 to 1,000.

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Without a doubt, healthcare is a thriving industry with a bright future because everybody cares about their health. The COVID-19 pandemic has only heightened people’s awareness of its importance

Without a doubt, healthcare is a thriving industry with a bright future because everybody cares about their health. The COVID-19 pandemic has only heightened people’s awareness of its importance. Hong Kong’s expenditure on healthcare grew at an annual rate of 5.6 percent from 1990 to 2020. In 2020, healthcare-related expenditures accounted for 7.1 percent of the mainland’s gross domestic product, while the global biotech industry generated $70.9 billion in revenue the same year. A glance at these figures gives readers a sense of the huge market potential of the healthcare industry.

Fortunately, Hong Kong has a strong foundation in the healthcare sector. We are not only the largest biotech initial public offering center in Asia and the second-largest in the world, but also a clinical trial base recognized by the State Food and Drug Administration. At present, Hong Kong is home to 16 InnoHK joint research and development centers and 10 national key laboratories and engineering technology research centers in the life and healthcare field.

The healthcare industry can become a major force in Hong Kong’s post-COVID-19 economic recovery, something that entrepreneurs in local healthcare companies know very well. Although many of them enjoy technological advantages in the field, few would consider directly taking on giants that are tens or hundreds of times their size. David does have a chance to overwhelm Goliath but it takes wits. Hong Kong companies should know where their best opportunities exist.

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According to the Productivity Council study, 51 percent and 55 percent of Hong Kong’s healthcare enterprises are engaged in production and trading respectively, while those on the mainland side of the Bay Area account for 77 percent and 11 percent respectively. Obviously, the healthcare companies in Hong Kong can leverage the production capacity of their counterparts on the mainland side of the Bay Area, while the latter can benefit from the former’s trading network. This would be a win-win situation for both parties, a scenario that Hong Kong’s healthcare companies should consider.

If Hong Kong’s healthcare firms want a safer bet that enables them to grow, they should set their sights on markets beyond the Bay Area. To cooperate with enterprises on the mainland side of the Bay Area is not a bad idea, but the scope, total population and market potential of the Belt and Road Initiative can be far superior. If Hong Kong companies seize the opportunities early and start cooperating with companies involved in the BRI, they are likely to enjoy stronger competitiveness, and benefit from lower land and labor costs compared with Hong Kong or the whole Bay Area. Lower costs mean stronger competitiveness for their products in the market. That is the golden rule of economics.

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If we look at the target markets of Hong Kong’s healthcare companies, Europe, North America, Southeast Asia and other Asian regions contribute 25 percent, 22 percent and 16 percent of revenue respectively, while the category of “other overseas regions” is merely 2 percent. The conclusions are not difficult to figure out. Hong Kong’s healthcare companies have not done enough to explore an untapped “virgin land” that is the global market. Riding on the BRI to cultivate this huge market will not only help Hong Kong’s healthcare companies to grow fast, it will also be their secret weapon to gain the upper hand over the industry’s Goliaths. This will be their best bet, without a doubt.

The author, a radiologist, is a co-founder of the Hong Kong Coalition and a council member of the Chinese Young Entrepreneurs Association.