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Adaptive Response: Entrepreneurship And Competitiveness In The Economic Development Of Hong Kong

Author

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  • CHEAH HOCK BENG

    (School of Economics and Management, University of New South Wales, Australia)

  • TONY F.L. YU

    (School of Economics and Management, University of New South Wales, Australia)

Abstract

This paper examines the economic development and changes in competitiveness in the economy of Hong Kong, and explains those changes in terms of Austrian entrepreneurship. It begins with Schumpeter’s conceptual distinction between ‘creative response’ and ‘adaptive response’, and between two corresponding modes of (Schumpeterian and ‘Austrian’) entrepreneurship. The experience of the economic development in Hong Kong indicates that since the 1960s, Hong Kong’s international competitive advantage has been based on unskilled labour-intensive exports. The ability of this city state to prosper on predominantly labour intensive activities is due to the efforts of its predominantly small-scale entrepreneurs. Hong Kong’s development has been promoted not by revolutionary (Schumpeterian) innovations undertaken by creative Hong Kong entrepreneurs, but rather by incremental and evolutionary innovations, such as product imitation, subcontracting, spatial arbitrage and diversification, undertaken mainly by adaptive ‘Austrian’ entrepreneurs in small-scale enterprises. Hong Kong’s experience suggests that ‘Austrian’ entrepreneurship can offer significant potential benefits to other developing countries.

Suggested Citation

  • Cheah Hock Beng & Tony F.L. Yu, 1996. "Adaptive Response: Entrepreneurship And Competitiveness In The Economic Development Of Hong Kong," Journal of Enterprising Culture (JEC), World Scientific Publishing Co. Pte. Ltd., vol. 4(03), pages 241-266.
    • Handle: RePEc:wsi:jecxxx:v:04:y:1996:i:03:n:s0218495896000149
    DOI: 10.1142/S0218495896000149
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