After APEC: How to jump-start Hawaii exports

For U.S. Fortune 500 CEOs, the November Asia-Pacific Economic Cooperation meetings on Oahu reinforced their view that the 21 APEC member countries are the key for growth.

In 2010, the APEC economies accounted for 61 percent of U.S. exports of goods — $775 billion — and more than 37 percent of U.S. private services exports, $205 billion. These exports pay for 5 million U.S. jobs.

Paradoxically, Hawaii’s touted advantages revolve around its Asian identity — unlike the Midwest’s Peoria — including its mid-Pacific location, Asian population and familiarity with Asian customs.

But Hawaii exports far less to APEC members than Silicon Valley or Seattle — the latter two farther away from Asia than Hawaii. Ironically, Hawaii has many Asia-Pacific experts and programs, but they exist more in isolation vis-a-vis the business community.

Hawaii business people must gain insights into Asia-Pacific business practices, and on what U.S. Fortune 100 firms are placing high value for marketing in Asia-Pacific.

Few Hawaii CEOs can discuss Mixi or Weibo, Japan’s Facebook-domestic player or China’s Twitter-like app. To sell mobile apps in Shanghai is a complex skill-set: Deeper insights exist regarding APEC business at Google Silicon Valley headquarters than along Bishop Street.

Also, Hawaii’s public education and higher institutions of learning must undergo a transformation to produce graduates to compete with APEC countries. The young assistants accompanying APEC leaders in Hawaii were highly motivated and English-speaking, and many had technical and scientific degrees. For an island nation like Taiwan to produce global mobile phone and laptop firms (HTC, Quanta), while Motorola and Nokia (U.S.- and Europe-headquartered, respectively) struggle in U.S. and Western Europe markets, is a testament to Taiwan’s rigorous educational system.

Many excellent Hawaii-based research-and-development programs exist, but unconnected to transforming into export products.

Can current Asia-Pacific expertise and technical/scientific education be combined in a new way in Hawaii so that new Hawaii export businesses are launched? The first step is an audit of all Hawaii relevant programs — business, languages, R&D — ranging from Chinese language instruction to high school digital media. Yet the problem remains that there is no strategy to link programs to maximizing "productization" focused on Asian markets.

Of APEC members, Singapore, with 3.2 million citizens and a $300 billion economy, leveraged all its resources as a new island-state in the 1960s. The Singaporean government wanted to attract Western capital. It sent promising young government workers to the Massachusetts Institute of Technology to learn about innovation and new products. In the early 1970s, Singapore laid the groundwork to capture a brand new industry that M.I.T. faculty promoted: semiconductors. This is a model of combining location, labor and training, plus an export product for the future.

Some pundits point to Confucianism and the Chinese work ethic as the foundation of Singapore’s success, but it was investment in education, technical training and global business insights — resulting in a sixth sense of how to make a product?

If the Hawaii Big Five had "productized" University of Hawaii ALOHAnet research (a precursor to what is now the Internet) in the late 1970s, Hawaii may have emerged as the global e-commerce center, not Silicon Valley.

For Hawaii to lead with APEC exports, Hawaii must become more Asian in many ways — and also become more American.

Hawaii resident Ray K. Tsuchiyama led the Asia office for the Massachusetts Institute of Techno-logy and also was at Analog Devices, AOL Time Warner and Google. He is a board member of the Pacific and Asian Affairs Council and blogs for Forbes.com.