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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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Comment by Daniel Leuck on August 23, 2010 at 4:01pm
Hi Mark - Its great to have you in the discussion. I think Brian's point is that most individuals and companies that are leaving Hawaii are heading to the US mainland. That is true for 10 of the 12 people listed above and 10 out of 11 for US citizens. As such, a comparison between Hawaii and other states seems to be the most relevant in this context (although a comparison between countries would also be interesting.)

Mark Boon: In return, if you want a developed-world education you pay for it. I'm not judgmental about it, just pointing out you pay for it one way or another.
Hawai'i ranks 49th in standardized test scores for high school students despite the fact we rank 13th for spending per student at just over $16K / student / year. This amount exceeds that of most private schools. We had a long discussion about this earlier in the year.
As I mentioned in a previous thread, I went to a public school in a state with lower taxes than Hawaii. My public high school offered seven foreign languages including Russian, Japanese and Latin. The year I graduated, Iowa's public high schools' standardized test scores were the second highest in the country despite the fact they spent thousands less per student than Hawaii. Its not just about throwing money at the problem. Hawaii's government institutions, including the DoE, have very serious efficiency problems.

Mark Boon: Maybe. But how much is that because those people are used to a higher-paced environment? It takes a little time to learn that things happen at a different pace.
Brian used to live in Fiji, so he knows all about relaxed business environments ;-) Like you, most people in this thread have lived in multiple states and multiple countries.
Anyway, we are happy to have you in Hawaii and its great to hear you are doing well. I hope Avatar Reality and Blue Mars bring many more like you to our state!
Comment by Ken Berkun on August 23, 2010 at 3:56pm
One does not particularly want a "laid back attitude" when you are a start up company. And Brian, even without kids you may want to care about education as a well educated populace improves life for everyone, even those without children.
Comment by Mark Boon on August 23, 2010 at 2:46pm
Low taxes? you're kidding right. We have the 5th overall highest local tax burden (measured per capita - 5th in the nation according to the Tax Foundation) and our income tax rate tops out at the highest in the nation - though average collection is lower (10th) due to large amount of income disparity (aka poor people).

Ahem, that's a rather U.S. centric POV. What developed country has lower taxes than the U.S? In return, if you want a developed-world education you pay for it. I'm not judgmental about it, just pointing out you pay for it one way or another.

but I know many people are frustrated when dealing with government here particularly and their perceived lack of drive/interest

Maybe. But how much is that because those people are used to a higher-paced environment? It takes a little time to learn that things happen at a different pace. Once you accept it it's not as bad. But I may not have been here long enough to encounter real problems in this regard.
Comment by Brian on August 23, 2010 at 2:21pm
Low taxes? you're kidding right. We have the 5th overall highest local tax burden (measured per capita - 5th in the nation according to the Tax Foundation) and our income tax rate tops out at the highest in the nation - though average collection is lower (10th) due to large amount of income disparity (aka poor people).

Our GET is lower in terms of % than comparable sales tax - however the broader tax base (goods AND services) means it is realistically much higher - contributing to the above high local tax burden.

The low violent crime rate is something that I do like.. that said there was a murder suicide in my neighbourhood recently. Just the other day someone was shot by HPD while threatening others with a pistol. Property theft is high here.

I don't have children (and don't plan to) - so I'm indifferent about our schools; but certainly that's an important consideration I hear from many.

That "laid back attitude" is often based in indifference and incompetence. Not to say that places with higher stress levels are necessarily more efficient - but I know many people are frustrated when dealing with government here particularly and their perceived lack of drive/interest.

Commutes & traffic is terrible here as is the transportation infrastructure. I know plenty of people that commute for an hour. This is especially a factor if you didn't inherit a nice house and had to buy one far out in Kapolei, etc.

I love Hawaii but I think too many people here "want" it to be a high tech gem in the Pacific just by the power of wishful thinking... Lipstick on a pig, etc. Sure there are successes but by and large I don't think those successes were caused by their presence in Hawaii.
Comment by Mark Boon on August 23, 2010 at 1:39pm
You guys make it sound like Hawaii is nothing but sun, sea and surf. Maybe once you live here for a while you forget what else there's on offer. We came here a little more than a year ago thinking it would be very temporary. But we like Hawaii enough that we would now consider staying, job(s) permitting. It's exactly the laid back attitude and the easy environment for kids that made us think. And everything is easily accessible due to the small size of the island.

Would you change it for more money but an hour or two commute, with everyone running the rat-race like there's no tomorrow?

Indeed, the cost of living is high. It's hard to fight tourist prices every day. School is expensive, but wouldn't it be everywhere in the U.S.? It's hard to swallow for someone used to free education all the way through university. But then again, taxes are much lower. Something has to give.

Try to make a list of things that would attract professionals, with and without kids, and make sure everybody knows what Hawaii is all about other than just a nice but very remote place. Make sure that companies know about them too.
Comment by Alex Salkever on August 21, 2010 at 8:49pm
Those are good things. My personal feeling, though, is that our strong suite is the 4-season growing cycle (four crops in a year) and U.S. IP protection. Lots of places have good wind, sun, and waves. Only Hawaii has the four seasons. Not to say energy innovation should not happen. Darren Kimura is doing a bang up job at Sopogy and some of the algae startups are doing very interesting things. Likewise, there are some great discovering going on at JABSOM. And yes, I agree with you about UH.I I have worked closely with many professors in those schools and those faculties are incredible assets to Hawaii. The ag industry is going to be more and more important. We have the big fish all here already so we have the executive talent and the contacts to larger markets built right into the mix. I am hopeful that's where we start to see a lot of traction, among other places. SaaS can work here, too, but you really need a Mainland sales and marketing front office (ask Truman or Carnet). I think Superb is doing an amazing job and am very impressed that they have pulled it off - they could be a model for lots of other service businesses if it can be replicated.
Comment by Ken Berkun on August 21, 2010 at 5:51pm
You are correct Alex, and that is why, if there is policy, it should focus on what Hawaii has going for it - wind, sun, wave and isolation. Also the excellent schools of Oceanography, Astronomy and Geology.
Comment by Alex Salkever on August 21, 2010 at 4:26pm
I think it goes deeper and this is not the fault of the state or policies. It's just an economic reality of location and lack of a tech anchor. Austin Texas grew up around semi-fabs and Dell. Portland was driven, somewhat, by nearby Intel facilities. Seattle by Microsoft and later Amazon and others. Arizona's high tech community is closely linked to the Intel fabs down there. Atlanta, to the infosec companies like ISS that started there and then spun out. Baltimore and Washington, by AOL and biotech research coming out of Johns Hopkins. San Diego was biotech coming out of the Salk Institute and their cluster. Chicago, a lot of tech is driven by advertising and the CME / options boards. And so on. I am hopeful that something like this will start to happen in Hawaii. It hasn't happened yet. Someday...
Comment by Ken Berkun on August 21, 2010 at 12:08pm
Everywhere I go people complain about the local issues. There is no perfect location, there are always trade-offs. The question to me is not so much "What are the disadvantages of being here?" as "What are the advantages?" For Hawaii, for what I am doing (consumer electronics) the only advantage so far is that it is closer to China. Oh, and the weather is nice. I think Hawaii has a serious advantage in certain areas of energy and bio-agra. Pure software, not so much, except that it is a nice place to live.

If housing costs are equal but you can send your kids to public schools (Bay Area v. Hawaii), then which one wins?
Comment by Alex Salkever on August 21, 2010 at 11:55am
I can say this. Salaries on the Mainland across the board in SF / Bay Area are roughly 50% higher. For many disciplines, I would say closer to 100% higher, at least in the technology field. Top software architects at big companies often make $200k plus bonus and stock. Cost of living are comparable and often in that equation you get a top-notch public school district (in Silicon Valley or in the North Bay or parts of the East Bay). This is a very tough problem to overcome and its a very different problem than people moving to Kansas to get a 15% pay raise.

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