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Wednesday, June 23, 2004



Isle job creation
an uphill battle

Many companies are tripped up by
various business hurdles, a report says


The good news is there are dozens of attractive companies poised to bring a combined $2 billion into the state economy. The bad news is, the vast majority probably won't.

That's the gist of a report yesterday by the privately funded economic development organization Enterprise Honolulu that points up the hope for an infusion of "new economy" jobs into the state but also the challenges of bringing and keeping businesses here.

The nonprofit, which aims to help businesses navigate Hawaii's regulatory, financial and cultural hurdles so they can grow, issued its own report card yesterday.

It said companies it has advised created 1,496 jobs from the start of 2002 to the end of the second quarter of 2004, bringing an estimated $155.7 million into the state in the form of new investment, payrolls and payroll taxes.

Enterprise Honolulu said it is working with 59 other unnamed companies that hope to bring 3,680 jobs and $1.9 billion in economic impact to the state.


Creating jobs

The nonprofit Enterprise Honolulu presented its own report card yesterday, pointing to job creation among its clients.

>> Some clients: Cendant Corp., Hawaii Cinema Productions and Hawaii Superferry

>> Impact: Of 3,600 total jobs created on Oahu in 2002 and 2003, 949 were created by companies allied with the nonprofit.

Source: Enterprise Honolulu

"We're talking about dozens of companies with hundreds of employees and potentially billions of dollars in sales," said Mike Fitzgerald, the organization's president and chief executive.

But those figures are likely to prove a mirage. The report showed that only about 10 percent of the companies Enterprise Honolulu advises actually bring their business plans to fruition in Hawaii. Most of the others are tripped up by a range of well-known business hurdles, according to the data.

These included the shortage of local investment money, a lack of laboratory space for biotech companies, a slow permit approval process and high rents.

"The reasons for failure are so varied that you can't draw specific conclusions about any one problem. There are lots of different challenges," Fitzgerald said.

But those hurdles only highlight the need for such groups as Enterprise Honolulu, said Tim Dick, founder and chairman of the inter-island ferry company Hawaii Superferry.

"They've been instrumental in helping the state and others to understand the economic benefits that will accrue from the ferry system," he said. "That's something we could not possibly have done ourselves."

Enterprise Honolulu's clients have included Cendant Corp., which has created or plans to create 525 jobs; integrate circuits manufacturer APIC, which will employ 250 people; and Hawaii Cinema Productions, with 165 jobs.

The report said that of the 3,600 total jobs created on Oahu in 2002 and 2003, 949 were created by companies allied with Enterprise Honolulu, or 26 percent of the total. In the first quarter of 2004, 355 jobs were created by Enterprise Honolulu companies, or 79 percent of the total 450 jobs added on Oahu.

"I never thought we would have seen these numbers," said Bruce Coppa, managing director of the Pacific Resource Partnership. "It's been a tough row to hoe but these are good results."

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