Over the years we have gotten used to hearing that another attempt to grow a tech industry in Hawaii has failed. Either the effort to foster new business (we won’t mention tax credits) goes wrong, the specific business being pushed doesn’t work here or it starts here but has to move to the mainland. End of story.
How many times have you read about how hard it is to develop another Silicon Valley in Hawaii? No capital, no workers, no market, no chicken, no egg, rinse and repeat. Tourism, a little agriculture and a lot of military is all we can have. I know because I’ve been involved in the process of growing technology businesses here many times over the last 30 years.
Then a couple of weeks ago I received an email from a state agency I didn’t recognize. Sara Lin had recently joined the Hawaii Strategic Development Corp. after moving back to Hawaii from newspaper positions on the mainland and wanted me to know how things have changed for that agency. HSDC is the little brother of the Hawaii Technology Development Corp. and, while founded also in 1990, had ended up with no president and no staff for a number of years.
I admit to a certain lack of excitement at yet another state agency working on technology and business economics. Sara managed to change my mind and arranged for me to meet the HSDC’s president, Karl Fooks.
Fooks explained to me that the problems that we always hear about when new technology businesses fail here are, in fact, solvable. The difficulty always has been the need for an interconnected set of things that are really required to grow a technology economy in Hawaii. No surprises, as this requires a trained workforce, different types of venture capital available to fund new innovative ideas and new ways of thinking about business. What Fooks had realized when he took over HSDC four years ago was that we have been steadily training our workforce, and people in financial management were increasingly knowledgeable on technology development.
HTDC had done a lot of the work over the years along with the University of Hawaii and the community college system to lay the foundation. The growing experience with technology incubators, as well as commercialization of both research and military technology, has steadily changed attitudes and produced new thinking on business in Hawaii. The basic need that Fooks decided to fill with HSDC was the creation of a business accelerator that used state funding in conjunction with private investment to build a fund of funds for new technology businesses to tap for growth. This is not exciting, but is what is really needed.
Out of this came HSDC’s HI Growth Initiative, funded by $13 million in federal money courtesy of the Obama administration and $8 million over two years from the Legislature. HSDC partnered with Henk Rogers, of Tetris fame, and his Blue Startups as the initial way to find and support new businesses.
Blue Startups, with HSDC matching funds, received 500 applications in its first program with 15 companies graduating. In 2015 Blue Startups, backed by HSDC, was listed as one of the nation’s top 20 accelerators by Forbes magazine. This is the kind of behind-the-scenes success that HSDC has been able to promote. Not bad for a low-key, two-person agency that I had never heard of.
Fooks and Lin brought back my optimism that Hawaii can be a real technology center with persistence and hard work. There is a long way to go, but things are working. That’s good news for all of Hawaii’s businesses.
Mike Meyer, formerly internet general manager at Oceanic Time Warner Cable, is now chief information officer at Honolulu Community College. Reach him at mmeyer@hawaii.edu.
