Start-ups can make
a nest in former
Hilo bank branch

HILO » For an example of innovation, consider turning a bank vault into a computer room.

Philip Bossert, head of the state High Technology Development Corp., and Rose Tseng, head of the University of Hawaii at Hilo, admired the adaptation as they stepped into the vault of the former downtown Hilo branch of the Bank of Hawaii.

The vault will become the heart of computer operations at the new Hawaii Innovation Center at Hilo , Bossert said.

The vault is just part of it. Innovation also means 65 business professionals helping new businesses get started, said Tseng, who along with Bossert and others helped dedicate the center on Tuesday.

The center is being called an "incubator" because the term suggests a place where a business can hatch, grow, and finally leave the nest.

Only 20 percent of small businesses survive their first five years, Bossert said. In incubators, the survival rate is 70 percent, he said.

The High Technology Development Corp. already operates two of them, one at Manoa established in 1992 and another on Maui, created a year later.

They have fostered 120 companies since starting. One of their successes is Digital Island, a private electronic business network company begun by two people at the Manoa incubator that eventually sold for $340 million.

When Bank of Hawaii closed its downtown branch in 1998 and donated it to UH-Hilo, the general idea was to use the building for teaching.

The concept of a business incubator grew, but even when the university did $2.75 million in renovations, some of the spaces were designed as classrooms, complete with chalkboards, rather than offices.

Although smaller than the Manoa and Maui centers -- 8,000 square feet at the Hilo center compared with 42,000 square feet at Manoa -- the Hilo center is more heavily wired with electronics, Bossert said. The whole building is a high speed "hot spot," he said.

With eight office spaces ranging from 137 to 307 square feet, the center already has three prospective tenants, said Nina Tanabe, the center's part-time, on-site manager. The candidate companies include one that is Internet-based, another that is computer-related, and a third devoted to professional services, she said.

Despite the "high-tech" name of the management corporation, tenants may come from any area of business, Tanabe said. Businesses may stay for up to five years, although gradually rising rent over the five years will urge them to get out on their own.