Hong Kong's innovation thrives while Singapore's is constrained by bureaucracy

Singapore and Hong Kong present stark differences in their economic development despite both being seen as highly successful. The evolution of these city-states reflects distinct approaches: Hong Kong’s legacy of laissez-faire economics fostered an innovative and risk-taking society, whereas Singapore adopted a more structured, technocratic approach to its economic planning. Cheang's analysis reveals that during a specific period, Hong Kong's Total Factor Productivity (TFP) was significantly higher than that of Singapore by 46.9 percent, indicating a more efficient and entrepreneurial environment. Singapore, while investing heavily in research and development, focuses on attracting foreign firms and talents to drive its innovation agenda. In 2013, it had six times more R&D-oriented firms than Hong Kong and performed better in local patent filings. This reliance on external resources for innovation raises concerns over sustainability; Cheang points out that Singapore’s growth model is input-driven, necessitating constant state support to maintain output levels that may not be possible without escalating resources. As he delves into the nuances, Cheang emphasizes that while Singapore's government has made substantial investments in R&D, it also concurrently imposes regulations that may stifle creative outputs. The Singaporean model funds the arts but does so with a bureaucratic oversight that dampens spontaneous creativity. In comparing the two cultures' creative sectors, he notes that Hong Kong's creative industry, though limited in state support, is more vibrant and adaptive, producing cultural content organically rather than through enforced measures. Cheang’s reflection becomes a larger philosophical argument about the limits of technocratic management versus the intrinsic merits of freedom. He asserts that Hong Kong's sustained adherence to market liberalism, underpinned by its colonial history, cultivates an economy that thrives on innovation and risk-taking. While Singapore achieved notable success, Cheang warns that it came at a cost—one where citizens increasingly look to the state for initiative rather than harnessing their creativity independently. This analysis serves as both a critique of the technocratic state and a reminder of the enduring significance of economic freedom in fostering real prosperity.