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The Honolulu Advertiser
Posted on: Tuesday, September 24, 2002

HI. TECH
Technology in Hawai'i not cooking despite necessary ingredients

By John Duchemin
Advertiser Staff Writer

When Carl Sagan, in the 1980s TV version of "Cosmos," tried to create life by mixing the elements of organic compounds in a bucket, he ended up with watery black sludge.

The lesson was simple: You can't create self-replicating DNA in a bucket, even if all the right molecules are there, without a few million years to generate random spontaneous reactions.

Which brings us to Hawai'i, and to the efforts by a handful of entrepreneurs to spontaneously generate a technology industry here. Despite decades of persistence, a few success stories and the on-and-off support of government and financial backers, these would-be fathers of industry aren't far from where they started.

Consider this: In September 1981, Gov. George Ariyoshi released an intriguing report on technology, that promising new industry for Hawai'i. We have all the assets, Ariyoshi's staff argued: An educated work force; a research university; an attractive lifestyle to lure entrepreneurs. An East-meets-West mentality and culture that makes us the ideal gateway to Asia. The military, which gives us research opportunities, computing assets and a highly developed communications network. A vast reserve of unique natural resources for tropical agriculture, ocean science, astronomy.

Since then, every report, brochure or marketing campaign featuring "High Tech Hawai'i" has had the same basic message: Hey, everyone, look at all these ingredients we have for a wonderful technology industry.

But that's about it. Like Sagan with his bucket, Hawai'i has produced negligible results from its list of ingredients.

We have created some nice companies. A few have gone on to be bought, like Verifone; or moved to California, gone public and then been bought, like Digital Island. But the state's entire technology industry remains smaller than that of many medium-sized towns in the Pacific Northwest or northern California.

Look at Eugene, Ore. (pop. 137,000). It is hundreds of miles from the nearest metropolis and its economy centered on logging until the late 1980s. But go there today and you see not only Internet and biotech companies ranging from start-ups to enterprises with several hundred employees, but a massive Hyundai chip plant and a Sony assembly factory that together employ thousands of workers in relatively high-paying jobs. In the telecom and dot.com financial crises of summer 2001, Hawai'i fretted about a few dozen layoffs at relatively small companies like Spirent. Eugene was hit by hundreds of layoffs that threatened its newfound economic diversity.

That's "tech," for better or worse.

Back to Hawai'i: The state's "technology industry" consists of a handful of prospects in widely scattered fields of concentration.

The state has estimated the so-called tech industry accounts for several hundred companies, a few percentage points of the gross state product and at least 12,000 jobs, but that's probably an exaggeration. The bulk of those numbers are Internet service providers, computer consulting firms, cell phone vendors and other companies that grow with the economy, rather than creating growth themselves.

The number of "high technology" enterprises — researchers, entrepreneurs, scientists generating intellectual property or ideas with global market potential — is not measured, but is certainly far smaller. Hawai'i's largest technology companies — like Spirent, Oceanit and STI — are still small, with about 100 to 200 employees each and a couple hundred million dollars in combined annual revenue.

Technology backers urge patience, arguing that Silicon Valley took decades to achieve its stature, and that we're at the perfect level of economic discontent to begin serious efforts to diversify away from tourism.

They may be right. Technology is discussed daily as the economic savior of Hawai'i. There is no lack of eagerness from both young idealists and older reformers, academics, scientists and investors who genuinely want to discover The New Hawai'i Economy.

This very awareness, a growing consensus that Technology Would Be Good, is in itself a victory for high-tech backers. With 9/11 still fresh in our minds and the tourism industry shrunken by thousands of jobs, turning to technology for relief seems less of a stretch.

That said, Hawai'i still doesn't have a high-tech industry. And most of us are impatient to see concrete results from all this talk. We want: university researchers to crank out more green mice, made-in-Hawai'i tech products( be they vaccines for dengue fever or fabulous computer software), thousands of high-paying jobs to raise our standard of living and attract Hawai'i natives back from their self-imposed Mainland exile.

We want our elected leaders to talk about this stuff all the time, instead of giving it lip service before returning to more-pressing issues such as rent support for airport concessionaires and the merits of traffic cameras. Once some of that happens, Hawai'i technology will be for real. Until then, the what-iffers have no choice but to dream on, mix their sludge and struggle to create new life for our economy.