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To Our Readers

By John Flanagan

Saturday, June 24, 2000

Doing business
better in Hawaii

I sat in on an all-day workshop in Manoa last weekend to find out what MBA students are learning these days about how to do business in Hawaii. The local chapter of Net Impact, a national society of business students, organized the event.

We know business has been bad, but what's been holding it back?

David McClain, dean of the UH College of Business, says Hawaii talks a good game, but we're not good enough at implementation. During the 30 boom years leading up to the 1990s, that didn't matter, but it does now. The good news -- if you can call it that -- is that recession has weeded out the less talented and the surviving enterprises have honed their skills.

Panelists told students they face many challenges:

Fear of failure -- one business owner advised students "fear can be your friend," but the key is to learn from mistakes, adapt your business plan and try, try again.

Technology -- although it creates new opportunities, the Internet is disruptive, introducing new competition and turning entire industries upside down.

Lack of rules -- the "new economy" doesn't always play by old laws and regulations and new ones haven't been written yet.

Lack of venture capital -- Hawaii investors would sooner put money into hotels and real estate than entrepreneurial start-ups.

Manuel Menendez of the city's Office of Economic Development said we try too often to reinvent the wheel rather than adapt what has worked successfully elsewhere. We're always trying to hit home runs, when a series of singles could score more runs.

Menendez lays blame at the Legislature's door. Despite positive steps to ease state capital gains taxes, he says government has failed to clear the way for an economic upturn. "No one at any level is fighting passionately for business," he said.

For example, Menendez said, although the state realized $100 million last year from a $1 million investment in the film and entertainment industry, it eliminated its $40,000 contribution toward the Honolulu film office's annual budget.

John Flanagan is editor and publisher of the Star-Bulletin.
To reach him call 525-8612, fax to 523-8509, send
e-mail to or write to
P.O. Box 3080, Honolulu, Hawaii 96802.

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