These events are no accident. Over the past decade, the government has invested considerably in sports development by supporting elite athletes, promoting sports in the community and making the city a venue for major international sporting events.

Chief Executive Carrie Lam Cheng Yuet-ngor instructed the Home Affairs Bureau to form a working group to find ways to bring together the sports and commercial sectors (the bureau’s sporting responsibilities will be taken up by the new Culture, Sports and Tourism Bureau under John Lee Ka-chiu’s administration).

the Lam administration emphasised that development of a sports industry could create job opportunities for young people and retired athletes alike, in sports venue management, events planning, administration, and so on.

However, there is much more to be gained. If we take a broader perspective, we can see that the sports industry encompasses a wide range of related and peripheral business sectors. With a clear understanding of the industry, we can start thinking about the type of sports business it would be most advantageous for Hong Kong to promote and pursue.

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Hong Kong’s most successful Olympics ever as swimmer Siobhan Haughey wins silver at Tokyo 2020

Hong Kong’s most successful Olympics ever as swimmer Siobhan Haughey wins silver at Tokyo 2020

First, we should understand what is meant by “industry” – that is, ongoing economic activity at a macro or even national level. Economic activity involves many key components, including consumers, producers, distribution networks, final products, financial capital and exchange of money.

In the sports industry, spectators at a sporting event can be seen as the consumers. The final products are represented by big matches, star athletes and merchandise. Exchange of money comes in the form of revenues from ticket sales, sponsorship deals and broadcasting rights.

And, of course, underpinning all these are profits, without which the industry would collapse. If Hong Kong is determined to create a sports industry, we must ensure it is profitable, otherwise the business community will not be interested in making investments or sponsoring sporting activities.

Many countries that have had sporting success are home to numerous profitable professional competitions. For example, in England, the Premier League generated over £4 billion (US$4.91 billion) in revenue in 2019-20, according to a report by Deloitte, while the NBA in the United States recorded US$8.3 billion revenue for the same financial year, according to CNBC.

By and large, what makes the NBA and Premier League so profitable are the huge number of spectators, local and globally, and the constant stream of commercial sponsorship deals. These facts highlight Hong Kong’s weakness: we simply lack people to develop a spectator-driven sports industry.

However, we need not despair if we can capitalise on other segments of the broad-ranging sports industry. While we lack lucrative, star-studded professional league matches with large numbers of spectators and business sponsors, we still can foster a prosperous sports industry in areas where Hong Kong already has had an edge. For example, we can focus on sportswear, esports, sports gaming apps, sports medicine and sports tourism.

Tech-savvy Israel is a good example. The country does not have world-famous football or basketball leagues, but it is a world leader in producing hi-tech sports-related gear and scientific measurement aids for athletes.

As the government begins forming the new Culture, Sports and Tourism Bureau, it must formulate policies that create a fertile ecosystem for a profitable sports industry in Hong Kong, building on niches where we already enjoy an edge.

Simply put, we need to think outside the box to overcome the city’s physical constraints. By doing so, we will find limitless opportunities to carve out our own successful sporting industry.

Ken Chu is group chairman and CEO of Mission Hills Group and a national committee member of the Chinese People’s Political Consultative Conference