Pacific Perspective
Pacific Perspective
Is Hawaii an
entrepreneurial place?A few weeks ago, the University of Hawaii College of Business Administration hosted the fourth annual Asia Moot Corp business plan competition. MBA students from 12 of the top business schools in Asia -- including China, Thailand, Korea, Japan and India -- competed for cash prizes, prestige and the chance to present their business idea at the University of Texas Moot Corp competition. The business knowledge, competitiveness and entrepreneurial spirit of these teams from Asia was truly impressive.
As Hawaii seeks to achieve our potential as a bridge between east and west through events such as the 2002 Asia Moot Corp, we must ask ourselves, "Is Hawaii an entrepreneurial place?"
The Global Entrepreneurship Monitor (GEM) published by the Kauffman Foundation provides an index to measure the entrepreneurial activity and climate of countries around the globe (See www.emkf.org for more details). Not surprisingly, countries with more entrepreneurial activity also experience higher levels of economic growth.
The results of the 2001 GEM study indicate the United States and Korea are among the most entrepreneurial countries, while Japan is among the least entrepreneurial. Since Hawaii is strongly influenced by cultures and attitudes from both the east and west, particularly both Japan and the United States, one wonders how Hawaii would score on the GEM Index.
The GEM index identifies four major factors that influence the entrepreneurial climate in a region.
The first factor in the index is entrepreneurial opportunity: Are there more good opportunities than people to take advantage of them, or are oppor- tunities to create a high growth business rare?
The second factor is entrepreneurial capacity: Are there many people who have experience in starting a new business? Are there people who can react quickly to good opportunities? Does the public education system prepare young people for careers in entrepreneurial firms?
The third factor is social legitimacy: Is a high value placed on self-sufficiency, autonomy and personal initiative? Are entrepreneurs respected in the community? Or, do people prefer that everyone has the same standard of living and resent those who make a lot of money from starting a business?
The fourth factor fostering an entrepreneurial climate is availability of financing: Are private investors an important source of financial support for new ventures? Or is there a shortage of debt and equity funding for new and growing firms?
Two informal surveys of members of the Hawaii Society of Corporate Planners and the UH CBA alumni over the past year indicate members of those groups would give Hawaii a grade of "C" on the first three factors and a "D" on the last factor. However, I believe the entrepreneurial climate in Hawaii is changing for the better.
The recent expansion of entrepreneurship curriculum at the UH, and soon in Hawaii's high schools, will improve Hawaii's entrepreneurial capacity. New organizations, such as HI-BEAM, are shoring up Hawaii's entrepreneurial capacity, providing support for some of Hawaii's most promising start-up firms. The newly formed UH Angels network, under the leadership of Professor Rob Robinson; and the state of Hawaii's efforts to foster venture capital through the Hawaii Strategic Development Corp. and support of the Investor's Choice Venture Capital Conference are improving the availability of private funding sources for new ventures.
One factor Hawaii still needs to improve is fostering respect and support for the entrepreneurs among us. We should support the growth of private sector enterprise as the primary driver of economic development. We should rely less on government to provide a solution to our economic slump. Most importantly, we must avoid government policies that inhibit the growth of business ventures. In short, we must encourage and celebrate entrepreneurship and entrepre- neurs at every opportunity.
Hawaii's diverse ethnic heritage includes many cultures that value hard work, initiative, self-sufficiency and risk-taking. We must embrace our entrepreneurial heritage from both east and west if we are to be the bridge to Asia for tomorrow's high-growth entrepreneurial ventures.
Shirley J. Daniel is the Henry A. Walker Distinguished Professor of Business Enterprise and director of the Pacific Asian Management Institute at the University of Hawaii College of Business Administration. She can be reached through the College Relations Office: cro@cba.hawaii.edu.