Bringing entrepreneurship back in: Explaining the industrial dynamics of Hong Kong with special reference to the textile and garment industry

Abstract

Applies Kirzner’s concept of entrepreneurship to explain the economic success of Hong Kong. The city economy possesses neither natural resources, nor sophisticated technologies, and yet it has successfully developed into one of the most prosperous economies in East Asia. This study argues that Hong Kong’s industrial dynamism relies mainly on a large number of adaptive entrepreneurs who are constantly alert to opportunities, maintain a high degree of flexibility in their production and respond rapidly to change. In the textile and garment industry, firms survived by pursuing a product imitation strategy, operating at a small‐scale, extensively utilizing subcontracting networks, producing customer label garments as well as performing spatial arbitrageurship. Employing these adaptive entrepreneurial strategies, Hong Kong manufacturers have learnt from foreign firms and imitated their products. By selling improved commodities at lower prices, they have competed against the original suppliers from the western advanced countries. Furthermore, to exploit new profit opportunities, Hong Kong’s entrepreneurs have shifted their production activities from one product to another, from one industry to another, from higher cost to lower cost regions, from traditional fishing and agriculture into manufacturing, and then to finance and other services. Their efforts have brought about structural transformation in the economy and enabled Hong Kong to catch up with early industrialized nations.

Citation

Fu‐Lai Yu, T. (1999), "Bringing entrepreneurship back in: Explaining the industrial dynamics of Hong Kong with special reference to the textile and garment industry", International Journal of Entrepreneurial Behavior & Research, Vol. 5 No. 5, pp. 235-250. https://doi.org/10.1108/13552559910300372