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Hawaii
Strategic Development Corporation (HSDC) is a state agency, created
to promote and diversify economic development in conjunction with private
enterprise.
Tourism-related businesses are specifically excluded from its sphere
of operations and emphasis is given to enterprises that further technological
innovation. The corporation makes investments in return for equity in
private businesses, recognising that many startup companies cannot carry
a big capital burden until they reach a later stage of development.
Funds have been given to
biotech firms, software and multimedia developers, to aquaculture, telecommunications,
medical enterprises, and to food and beverage processors and distributors.
The HSDC is able to leverage its public funds with those from the private
sector and the federal government. Co-investors with HSDC include major
capital-venture firms from California, New York and Singapore.
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HSDC
president John Chock says
most of the investments made have been through private capital. “We
have a small amount of funding invested in venture-capital limited partnerships,”
he says.
“We decided early on that we would not invest in companies but
in venture capital funds. We have committed about $13.5 million to several
partners.”
Another state agency, the High
Technology Development Corporation (HTDC) established the Manoa
Innovation Centre on Oahu and the Maui Research Technology Centre in
the early 1990s to drive the hi-tech sector forward. They have highly
successful incubators for startup companies.
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HTDC
executive director Nola Miyasaki
says: “We can house a lot of startup companies in these two very
large centres. For the expansion and retention of the high-technology
economy, these two incubators are going to be critical to ongoing development.
“Successful companies such as Digital Island started here. Our
programme has done relatively well in terms of success stories –
we have several per year – and we have a 60-70 per cent success
rate.”
Many companies have obtained federal grants for research and development.
“Right now we are trying to get more funds for the programme in
order to do outreach work and assist companies with technological transfers,”
she adds.
The HTDC has also been instrumental in stemming the ‘brain-drain’
to the US mainland. “One of the things HTDC has done is to start
a coalition of private sector companies called Tech Jobs Hawaii, and
we’ve taken those companies to mainland West Coast cities for job
fairs, specifically targeting Hawaii
affiliated people in the technology industry, and this has been very
successful,” says Ms Miyasaki.
“It
is probably the best short-term solution to some companies’ staff
development needs. Our aim is to incubate more successful firms, and
the obvious goal is to create high-level jobs in the industry that encourage
people to stay in Hawaii.”
The Department of Business, Economic Development and Tourism is a state
organisation created after the election of Governor Cayetano and, as
its name implies, it covers a wide range of activities. It helps the
Most
startups cannot carry a big capital burden
private sector in many ways, such as organising trade missions and providing
incentives, particularly for small to medium-sized enterprises.
“Hawaii
is known for sun and surf, but we would like to change that image so
that Hawaii is seen as a place for international meetings and to do
business,” says Dr Seiji Naya, the department’s director.
“Today’s technology is very important and in the past two
or three years we have begun to see major funding in IT.”
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