Business Law and Entrepreneurship: Hong Kong Start-up Analysis Report

This report provides a detailed analysis of entrepreneurship opportunities for start-up businesses in Hong Kong. It explores the concepts of entrepreneurship, various types of ventures, and the impact of small businesses on the economy. The report examines the entrepreneurial mindset, the environments that support or hinder entrepreneurship, and the role of Artificial Intelligence in small businesses. It highlights specific business ideas like travel agencies and consultancy services, assessing their potential in Hong Kong's market. The report also discusses the importance of small and medium-sized enterprises (SMEs) in Hong Kong's economic growth, and the government's support for these businesses. The research incorporates various academic sources, and provides a comprehensive overview of the subject matter.

Running head: BUSINESS LAW AND ENTREPRENEURSHIP AND SMALL BUSINESS
MANAGEMENT
Business Law and Entrepreneurship and Small Business Management
Name of the Student
Name of the University
Author Note

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Table of Contents
Introduction................................................................................................................................1
Task 1: Concept and phenomenon.............................................................................................1
Task 2: Assessing the impact of small businesses on the economy...........................................5
Task 3: Determining and assessing the key aspects of entrepreneurial mind-set......................7
Task 4: Examining the different environments that foster or hinder entrepreneurship.............9
References................................................................................................................................12
Appendices...............................................................................................................................15

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Introduction
This research report provides detailed analysis of entrepreneurship opportunities for
start-up businesses in Hong Kong. Hong Kong has recently been a significant location for
start-up and established business opportunities. The economy stability, technology based
platforms and government support enable businesses to expand or develop a start-up
business. The analysis in the report generates a comprehensive insight about how new
businesses and the entrepreneurs start their journey from Hong Kong. The analysis is
fundamentally based on entrepreneurship concepts, its application, and its relation with the
adoption of Artificial Intelligence. The report effectively discusses how entrepreneurship
opportunities can be implemented with the support of AI.
Task 1: Concept and phenomenon
It has been identified that entrepreneur is an individual who undertake a venture with
some potential and taking considerable amount of risks and thus entrepreneurship is the
venture undertaken by entrepreneur. As put forward by Burns (2016), entrepreneurship can
be of varying extent. More precisely, it can be mentioned that entrepreneurship is a set of
actions of an entrepreneur who is always in search of something new as well as implements
ideas into significant opportunity by undertaking risks with the venture or the business. It can
be mentioned that entrepreneurship does not consist of single set of element rather it is a
broad concept with long series of characteristics. Entrepreneurship also includes the financial
activity as it involves the creation as well as operation of the business with opinion of crating
values and ensuring optimum utilization of limited resources. As put forward by Breugst et
al. (2012), as the value creation is business is usually done consistently through the uncertain
business environment, entrepreneurship is considered as the most dynamic force.

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According to Carayannis,Samara and Bakouros (2015) businesses or the companies
are in the rush of finding entrepreneurial spirit which is necessary to remain relevant and
competitive in the fast-changing digital age. However, Man and Lau (2005) commented that
it might remain as ‘business as usual’ as long as employees of the organizations are dealing
with the increasing pressure of work and this is where Artificial Intelligence enters with the
potential of being crucial. This is crucial because from interactive search assistants and
employee management system to self-learning user segmentation tools and complicated
ambient intelligence, AI has always been a progressive technology with its limitless potential.
Thus, it has been identified that when it comes to AI in small and medium size
businesses AI is not only treated as scientific discipline, rather it is one of the fastest growing
marketplaces in tech. The start-up founders have begun to create a more competitive space
along with more imaginative projects which deliver real world benefits across a large sectors.
Down (2010) mentioned that the number of AI start-ups have grown tenfold since the last
decade. For example, top entrepreneur and the co-founder of small business called Textio –
an online service that which with the help of machine language can analyses language as
users write and guide people using more effective communication (Francesco 2019). The
organization has Textio has developed and used the data to generate a real-time score because
the recruiters can write their job postings, and make suggestion along. This start-up business
with the help of machine language can encourage people to visualize themselves in the jobs.
Furthermore, it has also been identified that the implementation or the incorporation of AI in
small business can be challenging for entrepreneurs because it is decidedly complex and time
consuming process which requires a considerable amount of time and investment (Griffiths
and Wall 2011). However, this issue also been revolved now days for the entrepreneurs who
are willing to undertake a new venture. It has been identified that several tech companies
have started out-sourcing the AI efforts with the purpose of making AI accessible to all. For

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example, a medium size organization Tensorflow is one of most significant and well-
maintained used framework for the machine learning. TN provides AI based tools to facilitate
customer relationship management and keeping and tracking customer data through the cloud
data (Hisrich, Peters and Shepherd, 2016).
Different types of entrepreneurial ventures
Entrepreneurship is kind of a willingness to launch a new business venture thereby,
the venture must have to include economic feasibility specially when expanding to global
market. As entrepreneurship is vast business concept, it has several types such as small
business entrepreneurship, scalable start-up entrepreneurship, large company
entrepreneurship and social entrepreneurship (Hisrich, Peters and Shepherd 2016).
Small Business Entrepreneurship
The majority of businesses across the world are small business and especially the
United States despite being financially stable has 97.5% of business that are small (Cheung
2008). It has also been identified that such businesses are hardly profitable as they make
profits and support their families and thereby, this sort of businesses tend to lack scale or
range to attract new venture capital by others. For example, the small business can include
hairdressers, grocery store, electricians, carpenters, consultants, plumbers, etc.
Scalable Start-up Entrepreneurship
According to Down (2010), such entrepreneurship tend to start their business with the
belief that their vision can change the world and the funding of such business can come from
the venture capitalist. Such business has the capability of hiring the best employees. Thus, the
major goal is about finding a scalable business model. However it has been identified that a
scalable start-ups only make a small proportion of all businesses of the risk capital and return.

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For example, the scalable start-up entrepreneurship can include Facebook, Instagram and
online shopping for electronic goods.
Large company entrepreneurship
According to Miner (1997), the large organizations or businesses with the help of
sustaining innovation can offer new products that are variants across several core products.
Hence, the new products are developed to satisfy the needs of changing market environment
needs and technology needs. The large entrepreneurship can include Google and Microsoft.
Social Entrepreneurship
As put forward by Skilton and Hovsepian (2018), social entrepreneurship remains as
an entrepreneurs who creates products and services to resolve the social needs and problems.
The fundamental goal of such entrepreneurship is about making the world a better to live
instead of sticking to profits only. One of the significant example of social entrepreneurship
Safepoint Trust by Marc Koska which works to redesign the medical tools and inexpensive
non-reusable syringes (Yu, Tony Fu-Lai 1997).
Entrepreneur and Intrapreneur
According to Mok (2005),Intrapreneurship remains as the change initiative which
was taken within an increasing concern by the people who are working in the organization.
Hence, Martinsons, Leung and Loh (1996) argued that Intrapreneurship is kind of
entrepreneurship within the same existing organization and it is usually found in the
organization that often encourage experimentation, address the failure and identify success
and eventually share the wealth. On the contrary, Yu (1998) entrepreneurs is more of
dynamic technique of generating incremental wealth. Intrapreneurship practice seeks to
enhance the competitive strength as well as sustainability of market, while the core objective
of entrepreneurship is about innovating something of socio-economic value.

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Task 2: Assessing the impact of small businesses on the economy
As put forward by Siu and Klandt (2000), a bunch of investors and entrepreneurs are
pondering to build and set-up their business overseas –particularly in the place like Hong
Kong and the major factor is about primarily facilitating the entry into global market and to
gain benefits from tax friendly jurisdiction. On the other hand, Beng and Yu (1996)
mentioned that strategic location, productive workforce at cheapest price, stable economic
progress, the political environment and attractive tax regime and government support towards
the FDI. It has been identified that economic freedom is one of the feasible options that
encourage the small business or the entrepreneurs to open a business in Hong Kong; Chu
(1996 mentioned that Hong Kong remains one of the world’s most dynamic economies which
is driven by free enterprise, free trade as well as free markets for all.
Businesses that are developed in Hong-Kong has the access of gaining benefits through the
preferential access to the Mainland China market from the closer Economic Partnership
Arrangement.
Business Ideas:
Travel agency: As put forward by Siu and Martin (1992), travel agencies have
become one of the most successful businesses in Hong Kong. It can be done with small
investment. It has been identified that due to attractive geographic locations of Hong Kong,
large number of tourists visit Hong Kong. Thus, this creates the opportunity for developing a
small entrepreneurship where the individual can develop start-up with the help of technology.
As digital platforms is sustainable in Hong Kong, the entrepreneurs can arrange tickets,
transportation, hotel reservation, sightseeing and related tourism services. In addition to this,
AI would play a very significant role in developing a start-up business in the travel industry
of Hong Kong. For example, AI can help the travel organizations to analyse travellers’

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profile by checking their preferences, life-style habits, eating habits, choices and budgets. For
example, an existing travel agency called Booking.com has recently entered Hong Kong
travel’s market (Francesco 2019).
Business consultant-
It has been identified that a lot of business consultants prefer to set their branches in
Hong Kong and thereby, the consultants business can be developed as a large number of
entrepreneurs’ dream of starting their branches in Asia and eventually they move to Hong
Kong. The major job responsibility of such business is about getting the business registered,
renting the office space as well as guiding the business in recruiting the staff members. AI
play a great role in developing a consultancy business as the whole data collection process
regarding the business can be done, handled and analysed with the massive amount of data
which can be far more faster than the average humans can do (Jones-Evans 2012).
Role of small and medium size business for the growth of Hong Kong Economy
As put forward by Burns (2016), almost 340,000 small and medium enterprise in
Hong Kong and they make 98% of Hong Kong’s business establishment and almost 45% of
the workforce is employed in the private sector especially in SMEs. Thus, it can be
mentioned that validity as well as business performance remains significantly important to
the development of Hong Kong’s economy. With the view to support SMEs to particularly
achieve prosperity and success, Trade and Industry Department delivers services that
fundamentally focuses on facilitating the growth of small and medium size organizations in
Hong Kong and guide them to enhance the competitiveness (Carayannis, Samara and
Bakouros 2015). In addition to this, it has also been identified that as the cost of small
businesses is relatively less along with the support of Artificial Intelligence, employment
opportunities are the most possible occurrence which further stabilizes the economy.

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However, Man and Lau (2005) mentioned that small businesses which provides
employment for almost 1.3 million people in Hong Kong, which is half of city’s workforce
with the inclusion of civil service, are significantly vulnerable to economic growth. In
response to its situation the government of the nation is favourable towards the establishment
of small business. Nonetheless, this downturn can be a significant reason for entrepreneurs
from the oversea market. Thus, it can be mentioned that businesses that wish to step in Hong
Kong, with the invention of AI find its way for growth (Breugst et al. 2012).
Task 3: Determining and assessing the key aspects of entrepreneurial
mind-set
It has been identified that entrepreneurial l mind-set is all about developing or
applying a certain way of thinking and it is more about the way in which an entrepreneurial
challenges the approach and mistakes. It is more like an inherent need about enhancing the
skills. Hisrich, Peters and Shepherd (2016) mentioned that an entrepreneurial mind-set help
the individual to propel and excel themselves and such mind-set can significantly dim as they
are skilled in the regular grind of entrepreneurship. So, by making significant amount of
effort to embody such mind-set the individuals can position themselves to deal with the
regular challenge as well as experience the growth.
Revisiting the vision on a regular basis
As put forward by Skilton and Hovsepian (2018), much of the entrepreneurial mind-
set may include a steadfast commitment to a significantly narrow vision. This certainly allow
the entrepreneurs to perform the necessary steps to accomplish that vision and the major issue
is that the demands of the day may get in the way and it creates a space where the vision can
recede. Thus, it is highly important to make effort to set aside a particular time every day to
pay heed to the vision and goals.

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Putting the self in challenging situation
As put forward by Siu and Klandt (2000), as an entrepreneur, it is certain that the
individual may generally face new challenges every day but due to the rise of obstacle does
not mean the individual should be afraid of making mistakes. This means of the individual
wishes to cultivate the entrepreneurial mind-set, they must embrace the challenges. It depends
on basic psychology that the more an individual put yourself in the challenging situation, the
individual is most likely to find the opportunity to equip themselves with the skills to deal
with the possible challenges but with the confidence of being successful. However, when the
individual is planning to go into a global market, the likelihood of challenges are relatively
high. An entrepreneur from UK market plans to step in Hong Kong’s tourism market may
face the challenge of market competitiveness where every small business is equipped with AI
implementation.
For example, Booking.com entered Hong Kong’s tourism market with its AI Data
Processing model in which it predicts consumers behaviour, tastes and preferences but the
challenge lie in the fact that every small and medium size business are using AI technologies
to reach customers’ mind. Consequently, risk in global entrepreneurship is relatively high. On
the contrary, local entrepreneurship may face e similar challenges in the local market but the
chances of major loss with the AI technology are relatively less. For example, AI Tax return
service in the domestic market of Hong Kong. Personal and business tax returns are
mandatory for everyone; this means the rules and regulations surround taxation remain
complicated as it is ever-changing and thereby difficult for everyone to make sure that they
are being efficient (Sharif 2012). Hence, AI performs a significant role as with the help of AI
and it is learnt that with the help of AI driven service which has access to all rules which
surround the specific and unique business and personal financial conditions which could not
only make the returns for the customers, it also make use of the superior knowledge.

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Entrepreneurial personality reflect entrepreneurial motivation
As put forward by Gerke and Menkhoff (2003), entrepreneurs seem to be dedicated
and appeared to their work which means they are not reliant on any other individual to push
them towards the goals or to get the work done. Thus, this can be mentioned that such drives
may come from within and allow the individual to motivate others in exchange. When it
comes to the personality traits of entrepreneurial mind set for entrepreneurs. Siu and Klandt
(2000) mentioned that ideas are not the matter of concern because any individual can have
the idea but certain individuals hold the capacity to understand the idea.
Task 4: Examining the different environments that foster or hinder
entrepreneurship
Even though entrepreneurial ideas are often welcomed in Hong Kong but there are
certain factors which might significantly affect entrepreneurial ideas:
Economic factor
According to Francesc (2019), the financial crisis in Asia was one of the remarkable
events where the subsequent economic recession almost lasted for 6 years and during this
period Hong Kong experienced a very significant economic shock. Since that period, the
economy in Hong Kong is significantly fragile. Therefore, it can be mentioned that
entrepreneurial fiancé is probably the biggest challenge among the potential entrepreneurs
when it comes to venturing in Hong Kong. This is due to the reason that entrepreneurs may
require the financial capital for three major reasons such as starting a venture, diversifying
the risks related with the new venture, growing the enterprise and meeting the business
objectives.

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Entrepreneurial education: It has been identified that the academic context is most
likely to represent the first contact with the entrepreneurship for a large number of people and
it happens either during the stages of schooling or college. However, Man and Lau (2005)
mentioned in the context of Hong Kong that beside economic crisis, organizations share
among 30 to 39 year olds along with tertiary education which is significantly peaked before
Financial Crisis in Asia and this is never addressed. Along with the education, the Median
age of adult working population in Hong Kong increased from 32.0 in 1981 to 40.6 in 2011
but there is clear gap education in the field which can significantly affect the entrepreneurial
ideas.
It has been identified that entrepreneurship in Hong Kong are relatively ambitious in
relation to long-term growth prospects of the companies are growingly looking to expand
their business outside of Hong Kong. This means they can make better use of the available
support service. Carayannis, Samara and Bakouros (2015) hence mentioned that the growth
may be targeted as per the needs of start-up because they may grow from the early stage.
Another significant challenge that affects the entrepreneurship business in Hong Kong is that
entrepreneurs must have to do to make sure that the investors and those working for the start-
up can receive adequate support from the environmental and the general community of Hong
Kong. Man and Lau (2005) argued that this is positive sight for the entrepreneurs because
Hong Kong is culturally progressed and there is significant level of intention and motivation
towards the development of new businesses. Hisrich, Peters and Shepherd (2016) mentioned
that artificial intelligence technologies are most likely to manufacture amazing products
within the next one decade and it is noted that founders are most likely to generate those
leaps. AI based organization like Zeroth.ai receives governments’ support in Hong Kong to
sustain their business. Zeroth.ai sought to support the business with the resources and
opportunities which they require to succeed (Francesco 2019).