HI. TECH
Lingle will try to improve on state's mixed results in luring high-tech firms
By John Duchemin
Advertiser Staff Writer
As with Gov. Ben Cayetano before her, Gov.-elect Linda Lingle wants to make attracting companies to Hawai'i a key part of building up the local technology industry.
But it's one thing to say you want companies to come; it's quite another to actually get them here, and another still for them to survive, thrive and stick around.
Cayetano learned this the hard way. In the late 1990s, his administration set a goal of attracting medium- to large-sized tech companies with hundreds of millions of dollars in annual revenues — in essence, creating an instant technology scene by reaping the fruits of other communities' high-tech investments.
This ambitious goal proved over-optimistic.
Some technology companies have, in fact, moved here in the past several years. But most of those that have successfully immigrated have been quite small, like financial software firm Kamakura Co., formerly of Japan.
Others that came were lavished with official praise but never lived up to the hype. Japanese manufacturer Uniden was supposed to bring hundreds of workers to an R&D lab here, but the project quickly fizzled.
Square USA did hire more than 100 programmers and specialists to make its computer-animated feature film "Final Fantasy: The Spirits Within" in Honolulu, but closed after the movie didn't live up to expectations.
These mixed results have caused some to argue that the state should focus on nurturing local entrepreneurs and building a high-tech industry from within.
Still, Lingle said during an Oct. 24 debate that her short-term plan is to step up — not tone down — the state's efforts to bring in outside companies. While she said encouragement of local entrepreneurs is better in the long run, Lingle argued that a concerted effort to attract existing corporations from other locations will pay quick dividends.
Fortunately, Lingle will be better-armed for such a campaign than was her predecessor in the late 1990s. She will reap most of the benefits of two landmark bills passed under Cayetano: The Act 221 high-tech tax incentives, and the University of Hawai'i medical school and research center being built in Kaka'ako.
The medical school, scheduled for completion in 2005, could be an effective magnet for biotech and health companies. And Act 221 has already helped inspire a few companies to move to Hawai'i, as well as encouraged local investors to troll the Mainland for relocation prospects.
One recent arrival is Blue Lava Wireless, a video-game developer that has a team of a half-dozen programmers in Manoa. Founder Henk Rogers, a UH graduate, is back in the state after an extended stint as a game developer in Japan, and praises Act 221 as a boost for Hawai'i's credibility.
Others include Iris Wireless, a software development company that is moving its headquarters here from Connecticut after receiving investments from Hawai'i venture firm PacifiCap; and Landmark Networks, a Silicon Valley wireless network company that has hired Tareq Hoque, chairman of the Hawaii Technology Trade Association, as its chief executive and is searching for office space and venture dollars in Honolulu.
Each of these companies are tiny, and none of them may survive the rigors of the highly competitive and volatile technology industry. But their decisions to move here have to be encouraging for Lingle as she plans to attract others of their ilk.
And they may demonstrate a workable model for high-tech's development in Hawai'i: Bring in enough of the little guys, and maybe one of them will grow big.
Reach John Duchemin by e-mail at jduchemin@honoluluadvertiser.com or by phone at 525-8062.
