Hong Kong Towards a Leading Global FinTech Hub

72 73 Talent Part I: Examination of Seven Fintech Hubs According to a survey of 300 companies released in November 2020 by Robert Walters Japan, the country is experiencing a serious skills mismatch, 259 with 85% of companies in tech industries being concerned about the future talent shortage. The top two hiring challenges are lack of industry experience, and lack of technical qualifications. Faced with an aging population and low female participation in the workforce, Japan’s shortage of homegrown talent is already scarce. The Japanese fintech industry is further challenged by the country’s gaming industry that attracts many domestic IT engineers and programmers. The Japanese culture and political system that favors big corporates, adds another layer of difficulties for new firms and startups to attract young talent. With the aspiration to become Asia’s top financial hub and the world’s financial center for virtual currency, a lack of homegrown talent leaves Tokyo with no choice but to consider foreign workers with a strong knowledge in blockchain and other technologies. In 2020, the Japanese Government looked into attracting foreign finance talent from Hong Kong. 260 However, with comparatively lower compensation than other countries such as the US and the UK, and traditional Japanese employment customs such as seniority-based salary structures, Japan has not been an attractive destination for foreign workers. According to the 2020 IMD World Talent Ranking, 261 Japan ranked 38 in terms of its appeal to attract highly skilled foreign workers, while Hong Kong ranked 14 out of 63 nations covered. Shanghai: Nurturing Local Talent through Government Initiatives China’s rapid development in fintech and fast-pace innovation widened its talent gap. In 2019, the fintech talent shortage in China was estimated to be more than 1.5 million. 262 According to the China Fintech Employment 2018 Report, over 90% of fintech companies in China agreed that the industry was facing an acute shortage of professional fintech talent. 263 The survey also revealed a unique phenomenon that 60% of fintech employers in China preferred domestic talent and 39% prefer offshore Chinese returnees. Unlike other fintech hubs, hiring from overseas may not be the preference for Chinese fintech companies, and this mentality makes fintech talent recruitment even more challenging. In announcing various incentives to attract fintech companies and talent to Shanghai, the municipal is facing keen competition with Hangzhou, which is also aiming to establish itself as a global fintech center by 2030. 264 Shanghai grooms fintech unicorns including Lufax and Ping An OneConnect, but Hangzhou is also home to tech giants such as Alibaba and Ant Financial. The Shanghai municipal government has set a five-year plan for fintech research and innovation, introducing a full spectrum of incentives and 259. Robert Walters. | 80% of companies concerned about the talent shortage within their industry; 48% of tech companies “very concerned.” 82% of tech employees confident of future opportunities, but only 57% among translators and office workers (Nov 2020). | https://www.robertwalters.co.jp/content/dam/robert-walters/ country/japan/files/Others/2020/salarysurvey-1126-en.pdf 260. The Standard.| Tokyo plans to hang out welcome sign for HK finance talent (Jul 2020). | https://www. thestandard.com.hk/breaking-news/section/4/150219/Tokyo-plans-to-hang-out-welcome-sign-for-HK- finance-talent 261. IMD World Competitive Centre. | The IMD World Talent Ranking 2020 | https://www.imd.org/wcc/world- competitiveness-center-rankings/world-talent-ranking-2020/ 262. China Banking News. | China Suffers from Shortage of Fintech Talent: Former Head of Sovereign Wealth Fund (Sep 2019). | https://www.chinabankingnews.com/2019/09/18/china-suffers-from-shortage-of-fintech-talent- tu-guangshao/ 263. PageGroup China. | China: Hiring and Fintech, Survey and Dialogue. | https://www.michaelpage.com.cn/sites/ michaelpage.com.cn/files/Michael_Page_China_Fintech_Employment_2018_Report_EN.pdf 264. Xinhua Net. | Hangzhou to become int'l fintech center by 2030 (May 2019). | http://www.xinhuanet.com/ english/2019-05/31/c_138106466.htm 265. Pinsent Masons. | Singapore and Shanghai collaborate in financial services and innovation (Dec 2020). | https:// www.pinsentmasons.com/out-law/news/singapore-and-shanghai-collaborate-in-financial-services-and- innovation 266. Shanghai Advanced Institute of Finance (SAIF). | http://en.saif.sjtu.edu.cn/ 267. China Academy of Financial Research (CAFR). | http://en.cafr.cn/Index.aspx 268. Fudan International School of Finance (FISF). | https://fisf.fudan.edu.cn/en 269. Fudan International School of Finance (FISF). Fintech Research Centre. | https://fisf.fudan.edu.cn/en_page- FRC1.html 270. Zurich Financial Centre. | Facts and Figures 2021/2022 edition. | https://www.zh.ch/content/dam/zhweb/bilder- dokumente/themen/wirtschaft-arbeit/wirtschaftsstandort/dokumente/englisch/finanzplatz_zurich_facts_ figures_en_2021_2022.pdf 271. INSEAD. | The Global Talent Competitiveness Index 2020: Global Talent in the Age of Artificial Intelligence (2020). | https://www.insead.edu/sites/default/files/assets/dept/globalindices/docs/GTCI-2020-report.pdf policies to attract technology companies and talent to stimulate fintech growth in the city. The government is also looking to attract fintech talent through favorable housing and medical benefits. In 2019, the Singapore-Shanghai Comprehensive Cooperation Council (SSCCC) was established to deepen collaboration between the two hubs across six key areas: 1. Belt and Road Initiative; 2. Financial services; 3. Technology and innovation; 4. Ease of doing business; 5. Urban governance; and 6. People-to-people exchange. As part of the collaboration, the Shanghai FinTech Industry Alliance (SFIA) signed an MoU with the Singapore FinTech Association (SFA) on fintech talent exchange and the development of fintech platforms. 265 To enrich the domestic fintech talent pool, the Shanghai municipal government established the Shanghai Advanced Institute of Finance (SAIF) 266 at the Shanghai Jiao Tong University (in 2009). Alongside the SAIF, the China Academy of Financial Research (CAFR) 267 has established a cutting-edge financial research platform that focuses on policy and research development, and works closely with China’s government bodies to support financial reform and market development. Based in Shanghai, Fudan University’s Fudan International School of Finance (FISF) 268 was established to focus on professional financial talent education and financial research. It received the largest single donation to the university at RMB1bn (US$15mn) to build a world-class facility and attract global experts and talent. 269 Zurich: Combining Education with Vocational Training The fintech cluster is a key player in Zurich’s economy. Zurich generates 44% of the economic value created by Switzerland’s financial sector, which is equivalent to 17% of the region’s economic output. 270 Zurich is the largest financial center in Switzerland, and also the most important financial and fintech employment market in Europe. In 2019, the financial sector of Switzerland employed 220,400 individuals, and Zurich accounted for 41%, providing approximately 92,000 financial job opportunities. Switzerland tops The Global Talent Competitiveness Index 2020 271 for its high appeal to qualified employees. Its attractiveness to highly skilled workers stems from its high quality of life. Specific factors are high salaries and good career opportunities, a quality dual education system that combines education with vocational training, and a good legal and economic framework.