Learning Places: Hong Kong, China (v.1, ch.1)

Hong Kong, one of the world’s most dynamic cities and GIFT’s home, is in a state of transition. As it forges its way ahead as one of the major global economic cities, it also faces its own share of real challenges, ranging from affordable housing to youth employment; an ageing population to early childhood development. 

GIFT launched the Hong Kong Young Leaders Programme in 2015, to offer participants the unique opportunity of working on a social impact challenge of direct relevance to their own home city. Meeting community and business leaders exposes a side of Hong Kong they may otherwise rarely get to see and in a context that is driven by the creation of constructive solutions to seemingly intractable problems.

This post has been adapted from Learning Places: Volume 1, Chapter 1: A Sporting Chance For All in Ultra-Urban Hong Kong.

We hope you enjoy it! You can order a copy of the full report here.

 
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Need for community sports facilities in Hong Kong

Within a five-minute walk from the Nam Cheong MTR station, in the western part of Kowloon, Hong Kong, is a small plot of land nestled between three roads. The area is dominated by dense public housing estates, where nearly 20,000 people live. The surrounding district of Sham Shui Po is one of Hong Kong’s poorer districts, with a median monthly income of HK$18,000 (US$2,322), compared to an average of HK$23,500 (US$3,000) for the whole territory. However, for such a densely-populated area, this plot of land (at the time of writing) remains undeveloped.

Cities across the world, and especially in Asia, face the growing challenge of providing adequate services for their growing populations. The Pearl River Delta and its cities of Guangzhou, Shenzhen, Foshan, Dongguan, Macau, and Hong Kong today, comprise the world’s largest metropolitan area. This area therefore needs an improvement of public services provision and sustainable management of scarce resources to improve the residents’ quality of life, in order to build a healthy and prosperous community.

 
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In Hong Kong, over 80% of residents fail to meet baseline indicators of physical activity. Engagement in sport plays a significant role in promoting mental and physical health and building inclusive, vibrant communities. Accessible sports facilities are scarce in Hong Kong due to a perceived lack of space and resources.

Government-run facilities are high-quality but low in number, and so people who lead active lifestyles often spend more time commuting rather than actually playing sports. Many Hong Kong residents forego playing sports entirely because they are reluctant to travel to available (and affordable) facilities, which are usually overcrowded at peak times and difficult to access.

Keeping Hong Kong’s challenges and opportunities in consideration, GIFT facilitated the proposal of the SportLight Trust model, a network of 30 to 50 Community Sports Hubs across Hong Kong over ten years. The model would facilitate greater participation in sports and mitigate the inefficient use of urban space by connecting sports associations with vacant or non-commercial land, and helping to fund the construction of modular sports facilities.

In order to develop a viable business plan for the SportLight Trust, GIFT brought together 24 local young professionals from private, public and non-profit sectors and partnered with Hong Kong SAR Government’s Efficiency Unit (EU). The EU offers management consultancy services and assistance to support innovation through learning, design and demonstration. It acts as a change agent and catalyst for improving the management and delivery of government services, aiming to help individual agencies and the Government work together as a whole.

 
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A proposed model for increasing community sports facilities in Hong Kong

With an aim to improve social cohesion and well-being standards of Hong Kong residents, the SportLight Trust would offer the establishment of 30-50 community sports hubs over a ten year period. The trust would operate by bringing together financial supporters with interest in sports and community development, passionate operator and community members.

                                         Proposed SportLight Trust logo created by YLP participants

                                        Proposed SportLight Trust logo created by YLP participants

The aim of the SportLight Trust was to transform idle space into vibrant venues where the whole community can come together and participate in sports, regardless of age, gender, ethnicity or economic status. Adopting a financially viable and sustainable business model, each sports hub within the trust would be built and operated with the input of local communities and designed to be accessible to all.  

Operators would be selected to run individual hubs on a contract basis, against a set of financial and social criteria, such as their entrepreneurial experience, their competency in running structured programmes, and their commitment to creating social value. Once the operator, who could be a sports association, social enterprise, or another related entity, was selected, SportLight would engage them in the process of site selection, design and consultation with the community.

A pilot of two to three hubs, each costing approximately HK$30-40 million (US$4-5 million) to construct, was the proposed starting point. Funds would be raised from public and private donations, sponsorship and naming rights to launch the first set of facilities; eventually, an endowment fund would provide a base source of funding for network expansion and reduce the Trust’s reliance on recurring donations.

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The current issues prevailing in Hong Kong

First, community integration is a pertinent social issue for Hong Kong. Some segments of society, such as the elderly, the unemployed and the young, are especially at risk of being isolated from the community and its support network. One particular at-risk population is Hong Kong’s ethnic minorities, mostly from South and Southeast Asia. These groups have lived in Hong Kong for two, or even three, generations. However, as their proficiency in Cantonese or English may be low, their engagement with Hong Kong’s mostly Chinese community may be limited. They also tend to have lower incomes, meaning they lack the educational opportunities available to Hong Kong’s Western expatriate population.

Second, the city's low level of exercise and physical activity, driven in part by low rates of participation in sports. The World Health Organisation’s baseline for physical activity is thirty minutes of physical activity, three days a week. 83% of Hong Kong’s population fails to meet this baseline, compared to a global failure rate of 60%. Indeed, 51% of Hong Kong’s population do less than one hour of exercise per week.

Additionally, urban populations are susceptible to a number of chronic conditions — such as obesity, cardiovascular disease and diabetes — that can be mitigated by regular exercise. Physical activity and sports also help with child development and concentration, and is correlated with better academic performance. Young children fare poorly in health and physical activities standards in Hong Kong. A Chinese University study ranked Hong Kong’s teenagers and children with a D grade in overall physical activity levels. Finally, participation in sports can provide an alternate base from the home and school, building positive connections outside of family and academic environments.

Third, Hong Kong’s sports facilities currently consist of large public sports complexes and private sports clubs but are often over-subscribed. Public facilities, run by the Government’s Leisure and Cultural Services Department (LCSD) are expansive, well‑developed and affordable to the general public, but there are not enough of such complexes to serve Hong Kong’s population. Access to public facilities is also a concern: sports participation rates are higher on the smaller and denser Hong Kong Island, as opposed to the more spread-out New Territories.

Fourth, it can be difficult to build large sports complexes in Hong Kong, as the required large plots of land could be used for other social purposes, such as public housing. Even when land has been designated for a sports facility, cost overruns and bureaucracy can slow construction, as has happened with the Kai Tak Sports Complex, whose construction has been debated since 2011. Private facilities are typically well-maintained, but devoted to a single sport. These clubs are usually exclusive with limited membership, and at fee levels unaffordable for most.

Hong Kong therefore, has a strong need for affordable and accessible sports facilities, which can cater to the health and social needs of the residents.

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SportLight offers opportunities for existing sports associations

Small-scale affordable sports facilities could fill the gap between large-scale public and private sports facilities. Public facilities are affordable, yet massively oversubscribed; private facilities prevent overuse by drastically limiting access through exclusive and highly-priced memberships. As such, a distributed network of smaller sports facilities throughout the territory would provide greater access at an affordable price.

Many of Hong Kong’s 76 sports associations would benefit greatly from access to space, as few groups have a large enough presence to either cover the whole territory or to deeply penetrate any given community. In addition, only a few sports associations, such as the Hong Kong Rugby Football Union, have been able to garner significant revenue outside of the government subvention. A dedicated space — or several dedicated spaces — would offer more opportunities for sports clubs and associations to provide widespread services to the community while generating alternate sources of revenue.

Operation Breakthrough is an example of a proven social organisation that could benefit from a dedicated facility. The Tuen Mun District Police Force launched Operation Breakthrough in 1996, which uses sports to rehabilitate disadvantaged youth in low-income and immigrant communities. Youths are mentored and coached by police officers, professional coaches and volunteers in a range of different sporting activities, including rugby, dragon boating and boxing. The project has been a remarkable success: participants report higher self-esteem and better integration with society, juvenile recidivism rates have dropped, and school attendance has increased. Eight participants have been taken on as police officers, while many others have become qualified sports coaches, sometimes forming their own sports clubs. The Hong Kong Police named Operation Breakthrough in a 2014 report as a key strategic partner in working with “Youth at Risk.”

 Many sports operators in Hong Kong, including the Hong Kong Rugby Football Union and Operation Breakthrough could provide access for less privileged populations.
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Rationale and benefits of SportLight Trust

The solution to Hong Kong’s lack of sports facilities seemed obvious in some ways: provide under-utilised land for sports associations to construct small-scale affordable sports facilities. Public and private landholders would gain productive uses for non-commercial land; the government would get support for enhancing the neighbourhood through a new community hub. Sports associations would secure dedicated space, greatly expanding their offerings to the community. In addition, the fact that such land is unsuited for commercial purposes would mean that more favourable rents could be negotiated.

However, the fixed costs of developing a community sports facility of any kind are often beyond what sports associations are able to pay, like monetary costs involved in building the facility. But, the additional ones like – information costs such as the time and energy spent looking for opportunities, are enormous. Given an unpredictable outcome, the burden of building a new sports facility is entirely upon the sports association, from drafting the proposal to finding the right funders.

Additionally, the Hong Kong Lands Department, does not provide a list of vacant sites that could be used by community or sports groups.  Large landowners may be ill-equipped to deal with smaller transactions, such as apportioning a single underused space to a single sports association. Economies of scale are unlikely to emerge from a single facility which by itself may never be sustainable, as cost savings may only emerge after investment in multiple facilities.

All these reasons along with information asymmetry between the sports associations, governments and private sector, would make it difficult to streamline the process of sourcing the land. Therefore, it was the introduction of a larger organisation, such as a management trust, with experience in land acquisition and management, which could source multiple plots of land and bid them out to various sports organisations.

A larger organisation could more easily source funding for initial capital expenditure, either from financial markets, private donations or corporate sponsorships. Finally, by having oversight over multiple facilities, the trust would leverage cost savings that come from economies of scale, as well as the positive spill over effects that come from a larger network of independently-run, yet still interconnected, sports facilities.

Therefore, the participants recommended that a management trust which could handle the sourcing and acquisition of vacant or non-commercial land, while provide the upfront capital costs for construction, could act as a solution.

 

 
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How the SportLight Trust model works

The participants proposed that the SportLight Trust would raise and manage funds and identify suitable spaces for Sports Hubs across the territory. Funds would be generated from public and private sector benefactors, sponsorship and naming rights and would eventually be managed through an endowment fund to provide a base source of funding to the Trust and reduce the reliance on donations in the long-term.

The SportLight Trust would also identify suitable Hub operators and cover the capital expenses required to construct these facilities. Operators would run Hubs on a contract basis as social enterprises and their performance would be measured against a rigorous set of financial and social KPIs including price controls and quotas for community usage. Operators would pay a HK$10,000/month management fee and a 50% share of their financial surplus to the SportLight Trust, which would cover the Trust’s operating expenses by Year 3.

 
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The SportLight Trust would have a robust governance structure promoting transparency and accountability. It would include strong financial controls including a centralised financial and POS system with regular audits of Hubs and Operators.

Following a pilot of 2-3 Hubs—each costing approximately HK$30-40 million to construct—it was estimated that the SportLight Trust would require approximately HK$1 billion to build thirty hubs over seven years. Five Hubs would be built in the first two years, followed by five Hubs per year for the remaining five years.

 
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Conclusion

The current landscape of sports in Hong Kong and the various social challenges being faced in the city present a massive opportunity for a unique new initiative that can create social and financial value and set a new precedent for local social enterprises and public-private partnerships – A Territory-Wide Network of Community Sports Hubs. The SportLight Trust would be a vehicle to increase the availability of sports facilities in Hong Kong which are inclusive, affordable and accessible. The Trust would identify sites for Hubs, invest the cap-ex required to construct facilities and source passionate and capable operators who would run Hubs on a contract-basis with a high degree of autonomy.

The Trust would therefore change the landscape of sport in Hong Kong communities and present a compelling case for potential financial supporters

The SportLight Trust model could easily be applied to other forms of social and communal activity: arts, theatre, culture, and so on. The model is not limited to Hong Kong. Many cities would benefit from allocating non-commercial, unproductive space towards various forms of enhanced civic engagement.

 
 
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Contact us to learn more about the 2015 Hong Kong YLP Project : A Sporting Chance For All in Ultra-Urban Hong Kong, or any of GIFT's past experiential learning programmes. 

Click here to order Learning Places: The GIFT Report and enjoy all five chapters covering inclusive business projects: Iran, India, Hong Kong, Vietnam & Myanmar.

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