Sunday, April 22, 2001

Systems administrator Joseph Pong, foreground, and
Regional Technology Manager Nich Morely of American
Healthways have made use of the technological infrastructure
available at the Kapolei Medical Park.

Hawaii’s high-tech parks
can learn from Asia

By Meheroo Jussawalla
East-West Center

Hawaii's focus on attracting information technology businesses offers much opportunity, but the state will have to compete with highly successful IT parks being developed in Asia. It can also learn from these Asian examples.

The East-West Center and Pennsylvania State University, with funding and support from the Ford Foundation and Campbell Estate, have undertaken a study of IT parks in India, Malaysia, Singapore, Taiwan and China.

Successful IT parks require state-of-the-art infrastructure including telecommunications equipment and services, and buildings; a skilled work force that is computer literate, and nearby universities or technology institutes to train these workers; competitive telecommunications rates; collaboration between government and business; and available housing and transportation.

Asia's success stories include:

>> Singapore developed its Science Park on government-owned land with the help of a commercial real estate operation. The government started the National Computer Board to encourage development of the IT industry with tax incentives and readily available, cheap infrastructure services such as digital switching and transmission. A highly qualified work force is produced at Singapore's two major universities, the University of Singapore and the Nanyang University of Technology. This business-friendly environment has encouraged multinationals to locate there.

>> Malaysia's Multimedia Supercorridor has received vast investment from the government, which envisions developing a cyber city just outside of Kuala Lumpur. Telecommunication infrastructure is provided by the government's telecommunications company in collaboration with NTT of Japan. There is now a university in the corridor for training personnel. Some foreign companies, like Microsoft, Sun Microsystems and Oracle, have contracted to establish subsidiaries with domestic companies.

>> Taiwan used government assistance to build the Hsinchu Park. All the companies within the park are privately owned and have seen global success in the semiconductor industry as well as computers, motherboards and laptops. Companies like Acer grew here and established ventures throughout Southeast Asia and the United States.

Hawaii is short in both infrastructure and a qualified work force. The state must also provide tax incentives, assist in providing land for parks, encourage competitive telecommunications and Internet connection rates, and cut bureaucracy involved in licensing and other requirements.

Its first experiment in IT parks failed in Mililani in the late 1980s because it lacked telecommunications infrastructure.

At that time the state didn't give enough priority to high technology. The Hawaii Information Network Corp. focused more on delivering information networks to the Department of Education rather than business development. At Mililani, a then-GTE monopoly set high rates for telecom services and failed to provide high-speed digital connections. Establishments, therefore, paid a high price for infrastructure without receiving adequate services or government incentives. Companies picked up and moved. Hawaii built a reputation for being an unfriendly place for high tech.

However, the state is trying to change that image, and there are encouraging developments such as computer training programs at Honolulu Community College. The IT park at Kapolei offers the best infrastructure, with a digital switching system and fiber optic cables connected to all companies. Kapolei has been able to market its park and attract venture capital. The Maui high-tech park has also seen success because of its access to the Department of Defense's supercomputer and assistance from the Maui county government. However, Maui faces a shortage of local workers and venture capital.

As the state's policymakers focus more on developing an IT industry, Hawaii's prospects are becoming brighter. The Hawaii High Tech Trade Association is bringing together several industries to locate in the islands, and legislative initiatives would create greater tax incentives and better infrastructure options like fiber-optic conduits and DSL (digital subscriber lines) for Internet and Intranet corporate users. Adtech, WorldPoint, Summit Communications and Sandwich Isles Communications are all making a mark in Hawaii's technology industry.

Investors maintain that costs remain high and bureaucratic procedures time-consuming. But it's becoming increasingly possible for Hawaii to convince at least a few of the ventures moving from the mainland to Singapore and Hong Kong to locate their subsidiaries in the islands.

Meheroo Jussawalla is an international
communications expert at the East-West
Center. She can be reached at 944-7329 or

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