Investment in telecoms and infrastructure is bringing Hawaiian companies into the global e-marketplace while investment in education is equipping workers with the skills to compete
here
are a few places in the world that evoke most people’s idea of
heaven on earth – a combination of sun-kissed tropical island and
modern comforts. Hawaii
is such a place and its reputation as a holiday resort par excellence
is unrivalled.
But what of the economics of America’s 50th state, almost 2,400
miles off the coast of California? How is this group of exotic islands
in the Pacific Ocean facing the challenges of the 21st century?
While Hawaii remains dependent on the holiday industry, government and
business leaders are turning to hi-tech, international e-commerce, and
convention tourism as new sources of income.
The
state is transforming the dynamics of its economy. Its emergence as
a strategic centre for hi-tech business signals “a new era in the
history of our islands”, says governor Benjamin
Cayetano.
“The components critical to our future prosperity include progressive
legislation offering new technology business tax incentives, a world-class
telecoms infrastructure that supports hi-tech devel-opment, and a workforce
equipped with the skills needed in the new economy.
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“By combining these
elements in the home of the world’s finest climate and beaches,
we have established Hawaii as a place of business growth in the Pacific
Rim,” he says.
In his second term of office, Mr Cayetano is the first person of Filipino
ancestry to hold the post. His administration has been credited with
turning round a moribund economy, particularly through the encouragement
of hi-tech industries, which have tripled in number over the past decade.
“When
I took office, there was a $750 million deficit. We struggled with it
and by last year we had recovered,” he says. “The private
sector went through a difficult time, but all businesses have made the
transition to new technology, which has helped them a great deal to
do business all over the world. Our isolation is a disadvantage, but
we have been able to deal with that through investment in telecommunications
and infrastructure.
“We have worked very hard in marketing both hi-tech and biotech,
and we have had a fair amount of success. We certainly encourage venture
capital in startup companies in Hawaii. Healthcare is the second-largest
industry and we are planning to build a medical school with strong research
capabilities,” he says.
Today,
Hawaii has one of the best telecommunications networks in the US, according
to Mr Cayetano. Hi-tech and biotech companies have set up business on
the islands “because of the quality of life here” he adds.
Hawaii’s technology sector has grown by an impressive 17 per cent
since the mid-1990s, creating 1,800 jobs between 1996-99. More than
12,000 people work in hi-tech, most of whom earn 50 per cent more than
the average wage in the private sector.
Telecommunications, including broadcasting, has been the fastest growing
sector, accounting for more than 50 per cent of all jobs. This is followed
by IT, accounting for 29 per cent.
Of
these, software is the driving force, providing 40 per cent of IT jobs.
Around 1,600 people work in software at 210 sites around the state.
The growth in software development jobs has been impressive, rising
178 per cent from 1996-1999.
Biotechnology has been phenomenally successful, partly as a result of
the islands’ wide range of climactic and topographical features
as well as their unpolluted seas. The sector is dominated by the cultivation
of sophisticated varieties of seed corn, produced for export.
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Overall,
agricultural biotechnology accounts for about 85 per cent of total biotech
activity. It includes food crops grown under cover and aquaculture.
Other types of biotech include medicinal, botanical and diagnostic research.
The majority of the state’s technology staff force work in the
city and county of Honolulu. Maui County, Hawaii County and Kauai County
also have substantial pockets of hi-tech industry.Jeremy
Harris, mayor of Honolulu, says: “We want to be
on the cutting edge, spearheading new technology. We are offering e-commerce
services and we are involved in a three-year programme to become a paperless
city where everything is done electronically.
“We see our ultimate destiny not with tourism – although that
will always be
a strong component of our economy – but as a centre between East
and West, a centre for knowledge-based industries and technology transfer
with Asia.
“Over
the next 20 years most of the economic growth and population growth
will be in Asia, and we have tremendous attributes to be a part of that
global community. If we can tap into the special Asian global economy,
then enormous possibilities open up. Our geographical location means
that you can do business in the US East Coast markets and Asia on the
same day,” says Mr Harris.
Software
is the dominant force in the IT sector
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Research
and development, including cloning techniques, are conducted at the
University of Hawaii. Meanwhile, the federal government conducts research
and development (R&D) into missile launching and testing at the
Pacific Missile Range Facility on Kauai.
Geographical location is paramount in the equation. Hawaii is the only
state in the US where a business can communicate with New York, Tokyo,
Hong Kong and Singapore on the same working day. The state offers all
the benefits of operating close to the international markets while enjoying
the political stability, legal protection and freedom of the US.
Manuel Menendez, executive
director of the Office of Economic Development of Honolulu, points out
that 90 per cent of all businesses in Hawaii are small. In his administrative
area there are five ‘enterprise zones’ in which companies
can gain tax exemptions if they provide new employment. Other incentives
are available to investors, such as tax breaks for land developers.
“There
has been a tremendous rise in the entrepreneurial spirit,” he says.
“And there is a great push to expand. Hawaii can be used by hi-tech
businesses to bring in teachers and trainers from Asia.”
One of the most impressive developments has been Kapolei, Hawaii’s
e-city. Now more than a decade old, Kapolei is fast becoming a major
telecoms hub for the Pacific.
Kapolei has a remarkable history. It is part of the Estate of James
Campbell, a private trust created in 1900 to administer the assets of
one of Hawaii’s foremost business pioneers. Today, the trust’s
total assets are worth some $2 billion. The estate owns 62,500 acres
of land, office, retail and industrial properties in Hawaii and 15 mainland
states.
Kapolei
is the estate’s largest project to date and is the centre for business
activity in the west of Oahu. The city comprises retail and commercial
developments, a shopping centre, parks, entertainment and childcare
centres, a government civic centre, a library and police station.
The key element is the state-of the-art telecommunications infrastructure
linking Kapolei to mainland US and Asia via five trans-Pacific fibre-optic
cables. Next to the city is Kapolei Teleport, where domestic and international
satellite dishes provide internet-based businesses with clear and reliable
communications.
The
big centre for new e-business is Kapolei in Oahu
David McCoy, estate’s chief executive, says: “You can have
a very high quality life here. It’s just a matter of getting the
word out that the capability is here too.”
Just as the City of Kapolei is wired for global business, its schools are wired for hi-tech education. Kapolei Elementary School principal Mike Miyamura says: “The idea was to use technology as a seamless part of the curriculum. The kids did their research on the internet and produced presentations using technology.”
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