How Do We Best Support an Innovation Economy?

Aloha TechHui Member:

We would like to hear your opinion on an important issue for tech companies in Hawaii. As you may know, the State Legislature enacted Act 199 a few months ago which placed certain restrictions on tech investment tax credits available under Act 221. This has disappointed many in the Hawaii tech community who see Act 221 as the best way to attract investment capital for tech companies in Hawaii, while others view the changes as necessary to restrain a tax incentive regime that distorted risk and value and would exacerbate the State’s continuing budget deficits.

Regardless of which view you subscribe to, the practical effect of Act 199 has been to sharply curtail investment capital for funding tech companies in Hawaii, a situation that may continue to the end of December 2010 when Act 221 sunsets and beyond. Our tech community needs to act urgently to support legislative measures to make investment capital for funding tech companies available again. The important lessons learned in past go-rounds with the Legislature is how little political (voter) clout the tech industry has had because we do not make our voices heard in the political process. This survey attempts to assess the tech community's preferences so that our tech industry advocates can start laying the groundwork to introduce appropriate tech-supportive bills in the next Legislative session in January 2010.

In particular, the already enacted State Private Investment Fund (SPIF) under Act 215 awaits legislative implementation. Act 215 authorized the Hawaii Strategic Development Corp. (HSDC) to use up to $38 million in state tax credits to attract loans and investments to create a revolving “fund-of-funds”. The SPIF fund would then make investments in qualified venture capital firms which are to be leveraged by private capital in order to multiply the total investment pool available to invest in promising tech companies. Vocal support from the tech community will be needed to push for Legislative approval of HSDC’s implementation plan and appropriation of SPIF tax credits in order to implement SPIF. A more complete background on SPIF and proposal for venture capital alternatives for tech companies in Hawaii can be read in Leighton Chong’s blog post.

This survey is to poll TechHui members as to what near-term tech-supportive measures you would support in the upcoming January 2010 Legislative session, and in particular your opinion on whether and how SPIF should be implemented. For tallying the survey responses, please select one choice that best answers each question below. A comment box is provided at the end for any additional comments or insights you may want to contribute on the survey.



Please leave comments relating to this survey on Leighton's Blog Post