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The Great 2009-2010 Hawaii Brain Drain

brain drain

At recent developer events, including today's UX Design Meetup, the effect of the great 2009-2010 Hawaii brain drain was readily apparent. Seth Ladd, Anthony Eden, Sam Joseph, Truman Leung, Ken Mayer, David Neely, Sherwin Gao, Seri Lee, Gabe Morris, Alex Salkever, Laurence Lee, Ken Berkun...this is just a handful of quality people I know personally. The list of talented tech industry people who have left or will soon be leaving over this very short period of time is truly depressing. Hawaii has experienced a series of brain drains over the past two decades, the most recent being in 2003/2004, but this is the worst I've seen by a long shot.

As Hawaii tech companies (largely 221 funded) collapse, the engineers and designers who were working for them aren't looking locally for new jobs. They are leaving our state, and it won't be easy to get them back. If we can't retain talented developers and creative personalities in our state the innovation economy is in serious trouble (not that this is news to anyone in the industry.) Any tech business owner who has recruited from the mainland or internationally knows its hard to relocate people to Hawaii. Many people view Hawaii as a vacation spot, but not a serious place for technology innovation. Employers have a hard time with questions such as, "I have three children. How is the public school system?" or "Will I be able to afford a house?" For younger professionals from the Bay Area or East Coast who don't have connections to Hawaii it can be hard to settle socially. Many relocations, which can be very expensive, fail in the first year.

I'm an optimistic person by nature. I believe we can still build an innovation economy in Hawaii, but we need to learn from our mistakes, identify our strengths, apply a healthy dose of pragmatism and a whole lot of elbow grease. Aside from fixing our horribly broken public education system, there isn't a lot the government can do to solve this problem for us. Its up to entrepreneurs and tech business leaders to come up with a plan for sustainable growth of a uniquely Hawaiian innovation economy.

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Tags: Hawaii economy, Hawaii tech jobs, brain drain, designers, developers, engineers

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Comment by Boris Ning on August 25, 2010 at 7:32pm
@Brian:
Michael Rota addresses some of the historical factors as to why salaries are so low in technology jobs in Hawaii.
http://thewavehawaii.com/index.php/archives/download-pdf/44-our-inc...

The reality that his simple yet detailed statistics bring up is rather alarming...
1) housing prices - ridiculously high
2) job vacancies - service based (hotels, health-care, government)
3) personal income - rather low compared to high cost of living
4) exporting the educated - brain dump

I feel he addressed the low salary for tech jobs best with his summary. The economic model since the 60s have not changed for Hawaii. Looking at the 300% growth in hotels and health-care and large increase in government jobs since that time, the model is nowhere suited for high technology growth (hence the low salary in tech jobs).
Comment by Brian on August 24, 2010 at 10:58pm
@ Mark I don't disagree re: specifics. I think that's what this thread needs to be about - getting past the "woe is Hawaii entrepreneurship" and trying to emulate other regions - and to have a realistic & productive discussion about what the specific challenges here, how they can or cannot be addressed; as well as what the benefits here are and how they can be leveraged to support the right sort of businesses.

Certainly we could all agree for example that we do not have the size (nor really want) to support say.. Google's MAIN campus. (Though a satellite campus...)

So if we don't have size - what do we have besides pretty beaches? (California has those too though the water is a tad cold ;)
Comment by Brian on August 24, 2010 at 10:55pm
@ Dan, lobby the feds and I'll happily do my part staying home 1-2x a week ;)

@ Ken I agree & understand. One can draw analogues to third world nations where kids that get scholarships abroad.. don't come back home. Much the same here.. even if we had a great education system - without the job market and living standards.. youth will leave (and the statistics support this dramatically). So while an education system is important - clearly the job market is just as important if not more so.
Comment by Brian on August 24, 2010 at 10:41pm
Thanks for pointing that out Dan.. yes I've lived in Micronesia, Fiji, Tonga, etc.. I'm pretty familiar with a 'slow pace of life'. In fact I've never lived on a continent.. ever. As others have pointed out this is frequently incompatible with the agility + energy needed to 'make things happen' in a startup - which was what I was trying to communicate.

So.. I know it's been asked before but.. why are salaries here so low? (tech ones... I know the average is pulled down by the high number of medium-skilled hospitality/service jobs) We often reference the "Hawaii Tax" but can we get more concrete and specific than that?
Comment by Francis L. Camacho on August 24, 2010 at 9:46pm
Gosh when I left Hawaii 11-1/2 years ago, people from companies I was notifying, like insurance, banks, etc. kept telling me, "Wow, you're another one leaving Hawaii...why, because of lack of opportunities?"...to which I replied, "Yes". Later that year, it was estimated by the Advertiser that 20 to 25 thousand people moved away from Hawaii.

As far as coming back, thats a tough call. Opportnites in my field? Zilch. I have ex-pat friends who work in fields of science, aerospace engineering, and computer science who all agree somewhat begrudgingly that not only there are lack of opportunities in Hawaii, but the pay differences would be too great to bear.

I admit I have no solutions to offer but hope the drain can be eased.
Comment by Daniel Leuck on August 24, 2010 at 11:22am
Ken - You are spot on. Its not a focus for the legislature because it doesn't affect most of them or their peers. I get the feeling they have given up on the public school system. As it continues to collapse the class disparity in Hawaii will continue to grow. Its not an issue of money. We already spend plenty of money on education. Its an issue of incompetence and, likely, corruption. Only a very small portion of the money we spend on the DoE is allocated to teacher salaries. I know public school teachers who sincerely care about their students and work hard to provide quality education, but the system is stacked against them.
Comment by Ken Berkun on August 24, 2010 at 11:08am
And vaguely apropos:
http://money.cnn.com/2010/08/23/technology/sal_khan_academy.fortune...

If you haven't heard of the Khan Academy, check it out.
Comment by Ken Berkun on August 24, 2010 at 11:06am
I should probably stay out of this but I hate the poor use of numbers, so here goes.

1. If our average per student spending in Hawaii is $16K (per Dan) and our average cost of living is say, 50% higher than mainland (outside of Bay Area) then that is equivalent to $11K per student, roughly. Pick a different percentage and do your own math, you get the idea.
2. Average non-sectarian private school tuition (element and secondary combined) is $16K per table referenced at the end, if I read it correctly, 2007-2008
3.Private schools count on a ton of additional donations, figure the actual cost is 20% higher, increasing actual per student funding to almost $20K per student (remember: mainland prices, not Hawaii). And I know this because I served on the board of my daughter's school in Seattle and was in charge of the budget, I have some faith in my numbers.
4. Do your 50% upgrade for cost of living in Hawaii, hell make it 30% to be conservative: and you get $26K per private school kid actual cost. Again, not counting religious schools which are heavily subsidized by the Church (often, again, averages).
4. So...you are comparing an effective spending rate of $11K per kid here in Hawaii and $26K per private school kid. Not even close.

That said, I'm sure much of the $16K per public school kid in this state is poorly spent. Both the board of education and the dept of education here are clearly incompetent and probably corrupt. The unions also have their issues. The teachers do their best but the number of "highly qualified" teachers is 81% and supposed to be 100% (2008).

But with 78% of our state legislators having their kids in private school (source: Advertiser) what is the motivation to really fix things?

Funding Source: http://nces.ed.gov/programs/digest/d09/tables/dt09_059.asp
Comment by Daniel Leuck on August 24, 2010 at 10:14am
Mark - I agree. Local companies certainly don't have as finely tuned sales pitches for mainland candidates as the real estate industry does for home buyers! We've spent six years working on ours, and there is still plenty of room for improvement.

Alex - That is a really interesting statistic for IBM. What is your source? This could be useful in our talks with state politicians. I've been pushing for a tax credit for large companies that allow telecommuting. Its the only solution to the traffic problem that is simple, cheap and green.
Comment by Mark Boon on August 24, 2010 at 10:03am
I haven't worked anywhere else in the U.S. so I can't really compare. I was only comparing to where I came from.

But what I actually tried getting at is when you'd like to attract both highly technical people and companies that will employ them, then you need to emphasize Hawaii's qualities. And that goes further than the standard cliches of nice climate. So you need to identify what is important. What's important to employers and what's important to employees. And then make sure that the local initiatives use the right buzz-words to attract employers. And teach the employers the right buzz-words to attract employees.

The same way that real-estate agents know what buzz-words to put in ads. They don't say 'nice house' or 'pleasant garden'. Instead they say 'granite countertops' and 'hardwood floors'. Because they know those are the ones that sell the house.

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