TechHui

Hawaiʻi's Technology Community

In Dave Takaki's forum post Action Committee for Threatened Hi Tech Tax Credits John raised an excellent point, "But maybe the issue is: Hawaii has insufficient tech talent so we are simply throwing money at the wrong problem." This is definitely a serious issue for a number of reasons.

1) Hawaii's top graduates often leave to take jobs on the mainland. There is a perception that there are no good tech jobs in Hawaii. I once had a conversation with a student at UH lamenting the fact he had to leave the state to find a good job doing Flex/Flash work on the mainland. At the time I knew four local companies desperate for Flex developers, Ikayzo being one of them! He never thought to look locally.
2) Its surprisingly difficult to get mainland talent to relocate to Hawaii. There are exceptions, but I've had several candidates flirt with the idea for months, waste inordinate amounts of my time and chicken out at the last minute. This is especially true for people with families.
3) Its hard to retain talent once they are here if they have no connection to the island. The exceptions are usually young, unattached people with a healthy sense of adventure and those with a significant other in the state. My attorney has advised me against asking candidates "Are you a young unattached person with a healthy sense of adventure?" :-)

A few years ago Sandi and I joked that HTDC should start a dating agency for techies that relocate. For some reason she never ended up taking the idea to her boss...

Hau’oli Lanui! I hope everyone is having a fantastic holiday season!


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Comment by Daniel Leuck on December 27, 2008 at 12:51pm
John: Let the State provide tax credits for each new local employee tech startups hire. Call it $5k credit per year, first 3 years (throwing out a rough number). This will incent me to hire locally (rather than my mainland contacts) and absorb the training costs for having the local hires learn my company's domain.
I really like this idea. I believe it would produce positive results in a very short period of time. It may be preferable to make the credit a percent of the employee's salary to make the incentive to bring top talent to Hawaii even stronger.
Comment by John on December 26, 2008 at 6:23pm
Sun, Microsoft, Cisco, etc. are to the Mainland what USARPAC, MARFORPAC, PACOM, etc. are to Hawaii. If you are technical and want to make a solid living, you can go do it here or on in the Mainland. However, neither one of them are good reference points for developing a strong high technology economy. The key to that is a vibrant and strong start-up environment that eventually spawns big companies like Sun, Cisco, etc.

The problems that Dan describes in his opening post are very serious threats to building a vibrant and strong start-up environment. And while I think encouraging kids and changing perceptions may be helpful, these are long term, indirect ways to grow the ecosystem.

To date, it seems 221/215 has been the most significant tool used to spur technology investment. I don't think we should give up such resources as the subsidy of 221/215 has likely meant $10M+ to technology startups since its inception. The problem is that way it is delivered seems to be akin to a pot of money. Hawaii investors take the credits, the startup gets to spend money any way it pleases and problems ensue.

Dan wants to hire people for his company. I want to hire people for my company. Neither of us are excited about the steps we have to go through to qualify for 221/215. Both of us are concerned about the challenges of hiring technical talent in Hawaii.

I will through out an alternative (speaking only for myself of course). Hawaii wants to spur local employment in technology. I want Hawaii to support my efforts and make it easier for me to overcome the hiring/training burdens of the smaller local talent pool.

Let the State provide tax credits for each new local employee tech startups hire. Call it $5k credit per year, first 3 years (throwing out a rough number). This will incent me to hire locally (rather than my mainland contacts) and absorb the training costs for having the local hires learn my company's domain. The state benefits because they get more high-tech local employees, they know exactly the benefit (each credit equals a new employee) and avoids these mult-million dollar investment credits that are hard to monitor and evaluate.

As tech entrepreneurs, we definitely do not want to lose the state's economic assistance. However, supporting the existing approach seems fraught with significant problems.
Comment by Greg Hester on December 26, 2008 at 4:09pm
Aloha Dan,

I've been accused of being "optimistically naive". Or was it "naively optimistic". Well, take it anyway you like, I don't deny either. I am optimistic most days!!!

We are in agreement. I know that in the short-term we have to utilize and sometimes rely on mainland help more than we may want to. However, my challenge to this group is:
1) We are closer than many think ... keep up the pressure and be part of changing the perception so that Hawaii becomes a high technology center.
2) Encourage kids entering high school (8th graders) to pick high tech careers. These local kids will be the best talent pool in the next 8 to 10 years. Having grown up in Hawaii, they will likely want to either stay in Hawaii or come back after a mainland college experience.
3) Continue to work to build companies based here in Hawaii so these kids have a place to work when ready.

How do we get there? Maybe we can start with a local programming contest using Alice? Maybe we help out with local NXT Robotics clubs? I don't have all of the answers but I think together we can find them and implement them.

Mahalo Nui Loa for TechHui!!!!
Comment by Daniel Leuck on December 26, 2008 at 2:11pm
Aloha Greg. Thank you for your detailed response. I didn't mean to imply there aren't talented techies in Hawaii. We have some topnotch homegrown techies and relocated techies from the mainland, Japan and elsewhere. We benefit from what I call the "Techie Hippie" effect where certain highly talented people tell their companies, "I'm going to move to Hawaii and live in a shack on the beach." Because their employers need them, they allow them to work remotely.

The question is whether we have enough talent to support a healthy ecosystem of technology companies. Based on my personal experience and the experience of my friends with tech companies I would say currently we don't. I spent nearly two years trying to put together a team of top notch Java Swing developers. Eventually I had to give up on building a local team which forced me to leave several very lucrative contracts on the table. I couldn't use remote developers because of bank security requirements. The same scenario replayed a year later when we were looking for Flex developers. I've heard similar stories from other local companies looking for software developers, engineers, and other techie positions. You usually have to relocate at least some of your people from the mainland. We always prefer to hire locally because its less risky, but sometimes there is no choice.

Your three points above are well taken. We also need to encourage top talent from the mainland to move here as a stopgap measure.
Comment by John on December 26, 2008 at 1:52pm
"I didn't think I'd find any high tech talent here. So far, I've not only been surprised but impressed with the folks I've met."

If you have the expectation of nothing, basically anything will exceed it. That being said, I agree with you that there is high tech talent here. The reality is that any city of 1 million people must have some high tech talent simply to exist - and Honolulu certainly has some.

I think the more important and challenging question is do we have the right talent and expertise for building high tech startups. While technical expertise and experience is one element, there are other aspects in technology entrepreneurship that are different and unique from corporate/government technology.

The problem with 221/215, the way it is structured is an invitation to abuse/fraud. It makes it easy for dreamers and people who are in over their heads to getting funding for projects that have little chance of succeeding.
Comment by Greg Hester on December 26, 2008 at 11:08am
Dan,

I've talked to lots of folks about this issue and it is the common perception that Hawaii == Tourism and not Technology. I believe this is an incorrect perception. However, I also believe that we are not where we want to be yet. Many folks (like yourself) who have been here longer than I have been laboring to change this and are making good progress.

Personally, I have been encouraged by the talent I've found here in Hawaii to date. When I moved here 18 months ago to allow my wife to be near her family and to give my kids a chance to learn what it means to be Hawaiian, I didn't think I'd find any high tech talent here. So far, I've not only been surprised but impressed with the folks I've met.

We need to continue pushing forward. When climbing a mountain, you don't always know when you're at the top. Many times, the last 20 feet of the climb are the toughest and you might not be able to see the top ... you may not know just how close you are.

There are several areas that we need to push on as we go forward.
1) Education - Are our high school students being encouraged to pursue technology based careers? If not, how can we as a tech community get involved and help high schools? Are we participating in career fairs in local high schools? If we capture their attention at this age and show them they can be successful we have done them a great service. What about our local Universities and Colleges? As a community, how can we come along side them and help enrich the high tech students experience? How can we attract funding to enable these higher learning institutions to become a more attractive choice for students pursuing high technology careers?

2) Jobs - I don't believe we can just create jobs. However, we can show local companies how they can use successful processes and tools to be successful and show them that we are growing a work force here that can meet their needs. I've heard too many times over recent days that many companies pick the "Lowest Common Denominator" in technology so that they can find resources on the Island. In the same breath, those same folks then talk about bringing in mainland consultants to solve "difficult issues". We have people here who can solve the "difficult issues". I think those companies are operating out the same perception I mentioned above. We need to change this perception.

3) Government - If our goal is to build a high technology community here in Hawaii so that Hawaii residents have higher paying opportunities which translates to higher tax revenues, then government agencies ought to be behind our efforts. I must confess that this is an area where I have no experience but I believe this has to be part of our efforts. Maybe getting behind Dave Takaki and his efforts is a good way to start.

Bottom line: I think we have come a long way and are nearing the top of the mountain. Lets stay positive and push forward.

Merry Christmas and Happy New Year!

PS. Something like the dating service might not be a bad idea. Lets keep thinking.
Comment by Cameron Souza on December 26, 2008 at 10:08am
I like the dating service idea!

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