HI. TECH
Improving credibility, maintaining hope key for developing tech sector
By John Duchemin
Advertiser Staff Writer
This is my last column, as I am about to leave The Advertiser to pursue graduate studies. I've enjoyed the chance to report on Hawai'i's attempt to create a technology-based economy.
As frequently discussed, this attempt faces more than a few obstacles. Some are inevitable, and have to do with Hawai'i's most unchangeable characteristics: small, isolated, unsuitable for manufacturing.
But other problems can be corrected. I'd like to close with some suggested remedies, based on several years of reporting and conversations with high-tech advocates:
Tell the truth.
Too often, technology advocates try to portray high-tech Hawai'i as an established industry, rather than an idea in the early stages of development. In doing so, the tech movement has mortgaged its credibility in an attempt to generate short-term political momentum.
Lobby groups talk up our "growing technology industry," whether or not the industry is actually growing.
Individual startup companies are accorded instant credibility upon receipt of money and hiring of employees, whether or not they have earned the buzz. Can a group of not-yet-profitable companies whose costs far outweigh revenues, and who depend on investors' multimillion-dollar handouts to survive, legitimately be called an "industry"?
The state government has done its share of hyping. Under former Gov. Ben Cayetano, administration reports frequently exaggerated the size of the industry and the magnitude of capital invested in local tech companies.
Hype isn't necessary to generate momentum, because a lot of people think high-tech makes sense for Hawai'i.
Make sure the new medical school works as well as advertised.
Speaking of credibility, tech pushers have staked a great deal of it on the success of the University of Hawai'i's new medical school, now being built in Kaka'ako on $150 million of state financing. The med school is supposed to be the greatest thing for biotech in Hawai'i because it is supposed to attract top-flight researchers, biotech and pharmaceutical companies, and venture capital.
None of that has happened yet. Developers would be wise to consider that the economy is still turbulent, biotech centers take decades to develop, and some in other locales are having problems attracting corporate sponsors because of the weak economy.
If med school backers don't commit to the years of labor that will be necessary to back up the rhetoric, the Kaka'ako complex risks becoming a political disaster and a fiscal white elephant.
Support the little guy.
The technology lobby has long labored to secure investment money for the fastest-growing companies — reputed all-stars that, if just given a few million bucks, could become the huge success that propels high-tech Hawai'i to new heights.
But venture investors have not yet proven willing to dole out the big-time "follow-on rounds" necessary to move these companies to the next level.
What's keeping the investors away? The sour economy and Hawai'i's lack of high-tech credentials probably play into it. But venture money will always go where investors see a sure return.
Clearly, more work needs to be done on building a stable of investable companies, with solid prospects, well-defined business plans and competent management.
Don't give up hope.
It's admirable that the tech lobby has stuck to its guns despite the attacks of skeptics, the occasional publicity debacle, unfavorable economic cycles and the uphill battle to convince outsiders that Hawai'i is useful for something other than tourism and Pearl Harbor.
A good many bright, influential people have signed on to the notion that Hawai'i's economy can be improved through developing a technology sector. That dream has not been realized, but the only way it will happen is if people keep trying.
The challenge is to merge hope with pragmatism, to be realistic about what Hawai'i can do — and then go do it.
Reach John Duchemin at jduchemin@honoluluadvertiser.com or 525-8062.
