ASSOCIATED PRESS
Kevin McCurdy, director of finance for Hoana Medical Inc., demonstrates the Intelligent Patient Vigilance System, located in a sensor pad under the sheets of volunteer patient Ariel Krape, a Hoana employee. The Hawaii company has developed a way to monitor vital signs without probes attached to the patient.
Hawaii struggles to
extend some gains
in high-tech sectorThe islands have had some
notable success but still struggle
with sun and surf image
When University of Hawaii professor Ryuzo Yanagimachi announced five years ago that he and a team of researchers had successfully cloned a mouse, inquiries came in from all over the world. But not all the questions dealt with technique or technology.
"A lot of the inquiries that came into the university press office were: 'Was he visiting when he discovered that?' Or, 'Where is he really from, is he from Japan?"' said Phil Bossert, executive director of the state High Technology Development Corp. "They just couldn't imagine that that kind of serious science was going on in Hawaii."
Today, helped by advances such as Yanagimachi's and increased efforts by the state, Hawaii's high-tech community wants entrepreneurs and investors to know that the islands are more than just a place to escape.
"When you think of the technology industry, everybody talks about computers," said Ann Chung, executive director of the Hawaii Technology Trade Association. "In Hawaii, it's much more than just computers. It's the utilization of technology on other science."
According to a 2001 report by the High Technology Development Corp., established by the Legislature in 1983 to promote development and growth of Hawaii's tech industry, there were more than 700 firms in the Islands, employing more than 18,000 people in high-tech ventures from information and telecommunications services to medical and health care research.
To many in the industry, the same aspects that make Hawaii a vacation paradise make it an ideal place for high-tech investment.
Surrounded by water, there are endless depths for touristy snorkeling and advanced marine sciences alike.
Volcanic mountains provide not only a breathtaking backdrop for weddings, but also a supreme vantage point for telescopes sweeping the heavens.
And what better place to research solar technology than beneath the clear blue Hawaiian skies?
Still, Bossert said one of his biggest challenges is overcoming that "branding" of Hawaii as a place to escape from business and technology.
"Trying to counter that brand without destroying it -- because we still want the tourists to come -- but trying to co-brand Hawaii as a place for serious business and innovative technology is the primary thrust of our organization," he said.
One of the first companies to realize Hawaii's potential in the high-tech arena was Digital Island Inc., which in 1997 launched a global computer network that took advantage of unused fiber-optic cable in the Pacific to ease bottlenecks in Internet traffic that was clogging mainland access points controlled by the major telephone companies.
DEAN SENSUI / DSENSUI@STARBULLETIN.COM
Mac Made Easy President Betty Markowski surfs the Web at a table in the Brew Moon restaurant in Ward Centre. Mac Made Easy installed a wireless Web hub in the restaurant, allowing lunchtime patrons to connect to the Web with their own laptops.
Now headquartered in San Francisco, the publicly traded company bills itself as "the leading provider of network services to enable locally relevant customer experiences."
"Something like that helps," Bossert said of Digital Island's success.
The Legislature has helped grow the industry, too, not only by creating the development corporation, but more recently in passing Act 221, an effort to stimulate investment in island tech businesses through tax breaks.
Backers of qualifying companies can claim a 100 percent tax credit over five years on their investment, essentially meaning the state foots the bill for the taxpayer's stake in the business.
"It pretty much gives away the store if you're a tech business," Bossert said.
But Bossert and others also say Act 221 has done more to diversify the state's economy than any measure in recent years.
The act became a lightning rod for criticism during the 2003 legislative session after the state Tax Review Commission said lax oversight led to abuses. Although Republican Gov. Linda Lingle attempted to tighten the act, majority Democrats in the House refused to budge. The administration did issue rules to address administrative shortcomings and curb abuses.
"In an environment right now where trying to get funding for your company on the mainland is almost near impossible, fortunately because of Act 221, companies here are able to get funded," Chung said.
While industry leaders are pleased with the direction that high-tech is going in Hawaii, they say more still needs to be done if the state hopes to become a Silicon Valley of the Pacific.
Perhaps the biggest shortcoming is a lack of support services for high-tech.
"The infrastructure here for a startup company is very much early stage," said Kevin McCurdy, finance director for Hoana Medical, which since its launch in 2002 has worked with the military and hospitals on developing a way to monitor a patient's vital signs without nodes, cables or other attachments to the body.
"In California, there are dozens and dozens of law firms that are very familiar with the whole startup process; there are a lot of accounting firms that are familiar with it," he said. "That's really in sort of the early stage in Hawaii, so there are some challenges there."
