A few days ago, I asked some people what Hawaii can do for a better tech industry next year, and here are their answers.
First, recognize Hawaii is already a contender, if not THE leader, in some technologies. What’s happening or in the works for energy here attracts envy and even awe around the nation and world. This ranges from algae-for-biofuel to wave energy to increasing the wind power useable on our small island grids to electrifying ground transportation with electric vehicles. Second, energize (forgive the pun) scientists and entrepreneurs who wish a role in this transformation and lure companies that prefer to operate in the clean, renewable, efficient-energy world of the future – sooner here than many other places. Karl Stahlkopf – Senior Vice President for Energy Solutions and Chief Technology Officer, HECO.
We should stay the course. With the volatility in crude prices, especially the decline to $40, it would be easy for us to lose the sense of urgency we had when crude was $147. We’ve had a small reprieve from a crisis situation, but will we use it wisely? Crude supplies are not growing, world demand is not slowing, if we don’t face this fact, our children will be faced with it in much harsher terms. Mike Gresham – Vice President, First Wind.
In the midst of the collective efforts in transportation and renewable generation, every business and household needs to get serious about energy efficiency. Thirty percent of the 70% of the Hawaii Clean Energy Initiative is in not using energy we would have used otherwise. This means compact fluorescent lights, Energy Star appliances, and solar water heaters. We all need to pay attention to our energy consumption to make Hawaii the Greenest Place on Earth! Ted Peck – Energy Administrator, DBEDT.
EXTEND ACT 221
To get investment into the tech industry next year, the State needs to honor its policies. The Administration’s program on Act 221 is shameful. A tax credit has been passed, yet the Administration is trying not to allow anyone to take the credit. The investors are quite confused. In today's market, confusion means no investment. The industry will stall next year in Hawaii as investment and jobs move to states that are more transparent in their rulemaking. Bob King – President, Pacific Biodiesel.
Tech is growing faster than any other sector of the Hawaii economy. If you compare tech direct spending, of $3 billion or 5% of the economy to construction direct spending of $3.5 billion or 5.5% of the economy the two sectors are somewhat equal. Why then would the governor choose to borrow $1.86 billion for construction spending while killing Act 221? The tax credits needed to stimulate this type of economic activity was $657 million from 2001-2007 including a projection for future unclaimed tax credits. This doesn’t even count salaries for tech workers, $63.6K for tech workers versus $46K for non-tech. So what Hawaii can do better for tech in 2009 is to get real and stop the Governor and the legislature from killing Act 221, a proven stimulus that is working. Bill Spencer – President, HVCA
We need to unequivocally commit to tech by extending Act 221, and send a signal to the Mainland and the world that Hawaii is serious about tech and renewable energy. It is an absolute bargain for the state and is the ONLY proven tool for creating capital for tech companies here. Continued politically-motivated attacks on this key piece of legislation threaten not only future investment, but the entire emerging tech sector and all the jobs it has created. Further, it is the only way that Hawaii can finance its independence from imported oil. Rob Robinson – Co-founder, Kolohala Ventures.
BE FRIENDLY TO SCIENCE
Hawaii’s elected officials should enact policies that encourage the growth of science and technology businesses rather than the negative message that Hawaii is unfriendly to technology sector businesses. In 2008 we saw state and county legislative initiatives that would ban certain types of agriculture biotech research and a county ban passed this fall on some types of biotechnology research. Legislative proposals banning research set a negative precedence and make technology businesses think twice about making new investments in Hawaii. Cindy Goldstein – Outreach Manager, Pioneer Hi-Bred International.
LEVEL THE FIELD
Because Hawaii’s sales and use tax scheme is unique among the 50 states, it unfairly burdens local entrepreneurs who are marketing intellectual property for use outside of Hawaii. We should provide that the sale of IP developed in Hawaii is not subject to Hawaii excise or use tax. Amending or clarifying the law to remove this burden would level the playing field by allowing local businesses that develop, license and sell IP from Hawaii with a reasonable prospect of competing with their mainland counterparts. Seth Reiss – Patent Attorney.
“E Pluribus Unum”, one out of many, is an apt motto to today’s economic situation. We must fund the development of many technology oriented industries, relying on brains not brawn, to render our future state economy strong. Ron Baird – CEO, NELHA.
On Santa's wishlist for the tech industry, you'll find more investment capital, better technology infrastructure, and more students studying science and math. What we really need is a state-wide understanding that support of the tech industry doesn't come at the expense of tourism or agriculture. Tech can provide the infusion of innovation, a means to the goal of more effectively generating revenues from tourism without compromising our culture, and more sustainable ways to grow our food. We must set aside artificial boundaries, and work together to reach a more prosperous Hawaii. Yuka Nagashima – CEO, HTDC.
An obvious specific is to continue Act 221/215. An obvious generality is to lower the tax and regulatory burden of these mostly small-midsized businesses. Beyond that, we must move our public policy away from our plantation era remnant overfocus on large historical industries. After all, a failure to diversify economic public policy will inevitably hinder our longstanding goal of economic diversification itself. As well, we must ask what our tech industry will do for itself in 2009 because, while it has a compelling story of success especially over the last decade fully justifying continued public policy investment, that story needs to be told much louder and clearer. Ed Case – former Congressman.
PLAN AND EXECUTE
Our leaders should finally get around to mapping out a long-range plan for the development of a tech industry. By long-range, I mean math and science at all levels of education, steps to make people appreciate the importance of hi-tech for Hawaii's prosperity, and creation of a friendly environment to encourage tech talent to come here. Larry Fung – former Hong Kong Councilmember.
We should begin developing a long term vision derived from serious study of other successful "island" economies such as Singapore and Israel and adapted to Hawaii. This would include a focus on three to five industries at most and begin with creating clean manufacturing opportunities around these industries. Then develop an investment plan in the corresponding knowledge and technical communities focused on these industries through the University of Hawaii Community Colleges and the UH Manoa College of Engineering to complement what is being done in K-12 STEM. These industries should include focus on renewable energy, recycling and re-manufacturing and coastal infrastructure to help build an economy around sustainability. Peter Crouch – Dean, College of Engineering.
Adopt Hawaii Broadband Task Force recommendations to drive broadband deployment, maximize Hawaii’s connectivity to the world and stimulate broadband adoption and use. The value of such infrastructure for Hawaii’s 21st century advancement in education, health, public safety, research and innovation, economic diversification and public services is estimated at $578 million annually in economic benefits. Leverage federal funding for green technology to expand job creation/growth in Hawaii. Continue expanding innovation sectors like dual-use, aerospace industry R&D, creative media, life sciences, aquaculture and sustainable agriculture with Act 221/215 tax credits. Carol Fukunaga – State Senate.
A TIME OF OPPORTUNITY
Hawaii has produced a Barack, a Brian, a Michelle and a Tad. But do you know Kawai, one of the many talented young women engineers changing Hawaii? Have you heard of companies like Oceanit, Hoana Medical and Nanopoint? Hawaii's emerging tech industry helps all of us; by diversifying our economy against new global forces we are only beginning to understand, by creating science and engineering companies so Hawaii kids can compete in a future we cannot yet imagine, and by proving that innovation is abundant at 78 degrees (average winter temperature in Hawaii). As the global economy worsens, Hawaii is poised to capitalize on the coming chaos, to become an innovation center - driven by vision, brains, and capital. The future is ours if we're willing to reach for it. Ian Kitajima – Oceanit.
The Chinese believe where there is great risk, there is great opportunity. Hawaii’s major industries, tourism and construction, are again threatened. We have an opportunity to bolster our tech industry. Barack Obama is planning to invest in infrastructure; Hawaii is pioneering energy solutions; telehealth will make great strides in 2009; Hawaii still has Act 221; Hawaii is well-positioned to support broadband development; our tech companies are just as innovative as Mainland counterparts. We need to work together to establish technology as a viable, sustainable economic engine. Burt Lum – Founder, Bytemarks.
“Success is the child of audacity.” Benjamin Disraeli, 1804-1881. 2009 will be a year of choices. I vote that the tech industry choose innovation over despair and clapping our hands over wringing them. Yes, it will be challenging, but we need to practice what Disraeli said and be a little audacious in our search for solutions and understand that adversity will make us smarter. Mary Fastenau – President, StarrTech Interactive.
ELEPHANT IN THE ROOM
These contributions have been edited for the ThinkTech column on December 28, 2008. More complete versions are here on the ThinkTech blog. Thanks to all the contributors.
In any event, tech is certainly the elephant in the room. So let’s all wish and hope for success and prosperity for Hawaii’s tech industry next year.