Technology R

1
byTed LiuDirectorDepartment of
Business,Economic Development TourismState of
Hawaii

• Technology RD in Hawaii
• and the
• Prospects for Commercialization

Presented atTechEnterprise 2004Sheraton Waikiki
HotelAugust 18, 2003
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Hawaiis Economic Challenges in the New Millennium

• Image of Hawaii as place to do business
• Need to expand and diversify industrial base
  beyond traditional sectors
• Right investment climate and business incentives
• Adequate capital formation
• Economies of scale
• Entrepreneurship

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Hawaiis Economic Challenges in the New Millennium

• Shift from service- to knowledge-based economy.
• Adequately-skilled workforce.
• Role of University as catalyst for business
  growth, economic diversification, investment
  attraction, and tech transfer.
• Importance of strategic public-private
  partnerships.
• Need to balance economic growth with other
  concerns (e.g., resource, environmental) to meet
  public needs and enhance the quality of life.

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The Case for Technology-Driven Development

• Science technology most important factor
  enabling sustained economic development.
• ST can serve as a foundation and stimulus for
  economic growth and diversification.
• Expanded technology sector can help generate new
  export products and services, raise Hawaiis
  technology profile worldwide, and help attract
  corporate interest and investment.
• An expanded technology base will help infuse new
  technology into Hawaiis more traditional
  industries, enhancing their productivity and
  thereby making them more competitive.

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The Benefits of Tech-Driven Development

• Tech-driven industries can develop new products
  and services for export and broaden Hawaiis
  economic base.
• A strengthened technology sector can introduce
  new technologies that will increase the
  productivity and competitiveness of Hawaii-based
  industries.

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Hawaiis Strategic Advantages for Tech-based
Growth

• Advanced research facilities, technically skilled
  workforce and natural resources.
• Advanced telecommunications and high performance
  computing capabilities.
• Enterprise/Economic/Foreign Trade Zones and
  technology incubator facilities.
• Strategic mid-Pacific location with
  cultural/economic ties to the Asia Pacific.
• Pioneering RD programs in diverse areas (e.g.,
  cancer research, renewable energy, biogenetics,
  aquaculture, data visualization, high-energy
  lasers).

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Prerequisites for Economic Growth (HIPA)

• Developing high-tech products and services.
• Infusing all industries, public and private, with
  technology.
• Creating higher-skill, higher-paying,
  technology-infused jobs.
• Establishing cultures of innovation and
  entrepreneurship.
• Achieving global competence and connectedness.

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Guiding Principles for High-tech Growth

• Support technology development as a catalyst for
  diverse economic development opportunities.
• Focus development efforts on target industries
  that comport with Hawaiis strengths and are
  projected to experience rapid expansion and/or
  diversification.
• Investigate how Hawaiis traditional agriculture,
  tourism and military industries could be retooled
  to better meet current and projected market
  demands and trends.
• Promote technological innovation in all
  industries.
• Analyze both national and global market trends
  and growth patterns (i.e., look outside the
  box).

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Target Technology Industries for Development

• Biotech/Agriculture
• Defense/Dual-Use
• Environmental Resource Management
• Healthcare Medical
• Information/Communications
• Alternative Energy
• Ocean, Earth Space

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BIOTECH/AGRICULTURE/AQUACULTURE

• Hawaii well-positioned to become leading research
  center for biotech industry.
• Agricultural biotech can sustainably diversify
  traditional economic base.
• Marine biotech can advance biomaterials, health
  care diagnostics, pharmaceuticals, and coastal
  resource management.
• Hawaii ideally suited to pursue basic medical
  research and epidemiological studies leading to
  drugs and therapies for diseases indigenous to
  the Asia-Pacific.

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DEFENSE/DUAL-USE TECHNOLOGY

• Federal sector only second to tourism in
  contributions to Hawaii economy.
• Dual-use technologies have tremendous potential
  for commercial applications in fuel cell
  technology, wireless telemetry, telemedicine,
  contaminant remediation, bioinformatcis, remote
  sensing, data imaging and the Internet.
• Dual-use technology will also play a critical
  role in Homeland Security, and Hawaii is
  well-positioned to engage in this effort.

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ENVIRONMENTAL RESOURCE MANAGEMENT

• Our state must balance energy needs and economic
  growth with environmental protection.
• Hawaiis private sector is commercializing
  sustainable technologies to support growing
  populations while reducing environmental
  pollution.
• Our state government has demonstrated leadership
  in promoting energy efficiency programs and the
  assessments of brownfields.
• Hawaii is a pioneer in bioremediation.
• The State also conducts market assessments and
  development programs to facilitate export of
  energy, environmental, and other sustainable
  technologies to the Asia-Pacific.

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HEALTHCARE MEDICAL TECHNOLOGY

• Hawaii is nationally recognized as the
  Healthcare State, with access to specialty
  expertise and advanced healthcare concepts and
  technologies.
• Our islands provide an ideal healthcare venue for
  patients throughout the Asia Pacific.
• The University of Hawaiis School of Medicine is
  pioneering all forms of healthcare, including
  complementary and alternative medicine, as well
  as building a multi-million dollar research
  campus in Kakaako.
• Other strategic advances in medical science and
  technology by Hawaiis private sector are
  facilitating groundbreaking research and
  significantly improving diagnostic and patient
  care services.

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ALTERNATIVE ENERGY

• Hawaii remains dangerously dependent on imported
  oil, and needs to revolutionize its
  infrastructure to reduce energy costs, use of
  fossil fuel, and resulting greenhouse gas.
• A variety of promising renewable energy options
  are being pursued in Hawaii, including
• - biomass
• - H-Power
• - solar heating/photovoltaics/wind power
• - geothermal
• - distributed energy resources
• - hydrogen fuel

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OCEAN, EARTH SPACE TECHNOLOGY

• Hawaiis volcanic origins, ready access to
  pathogen-free, nutrient rich deep sea water, and
  a variety of ecosystems make it an unparallel
  laboratory for ocean RD.
• State-of-the-art remote sensing equipment and
  expertise is enabling a wide range of terrestrial
  and extra-terrestrial applications.
• Hawaiis strategic location, temperate climate,
  and advanced technology infrastructure make it an
  ideal location for space science and technology.

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2003 Hawaii Business Transformation Wargame
Objectives

• Penetration of new markets and ability to compete
  in same critical to sustained growth of Hawaiis
  tech industries.
• To date, growth of tech sector largely sustained
  by Hawaiis domestic market, limited off-shore
  markets, and federal funding programs.
• Wargame enabled stakeholders to explore ways to
  transform Hawaiis tech industry from Federal
  program-centric to one expanded and sustained by
  enhanced access to domestic and off-shore
  markets.
• Also investigated future market opportunities,
  business models, investment trends, and workforce
  dynamics to explore new business development
  strategies.

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2003 Hawaii Business Transformation Wargame
Major Issues

• Business Strategies Market Development
• - Inadequate intelligence on government and
  commercial market opportunities.
• - Business and political climates conducive to
  high tech enterprise.
• - Role of university and federal centers in
  Hawaii as engines for business growth.
• - Brand recognition for Hawaii as technology
  center.

• Financing Technology Enterprise
• - Early stages of technology development not
  conducive to venture capital.
• - Companies not aware of assistance available
  through State and Federal programs.
• - Need for entrepreneurs/investors to accept
  failure as natural part of growth process.
• - Need for employee incentives/training programs
  to keep pace with technology markets.

• Optimizing Human Capital
• - Shortage of well-qualified high-tech mid-level
  human resources.
• - Hawaii State education system deficient in
  meeting staffing needs of high-tech firms.
• - Opportunities for workforce training through
  private sector internship initiatives.
• - Critical mass of top-flight scientists and
  highly qualified business professionals.

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2003 Hawaii Business Transformation Wargame
Recommendations/WarGame Action Plan

• State Administration
• - Create environment where job growth,
  investment and business can flourish.
• - Catalyze/broker access to business/financial
  expertise and forge strategic partnerships.
• - Establish a cabinet-level Chief Innovation
  Officer.
• - Serve as a conduit of information and
  resources to Hawaiis technology sector.

• The Legislature
• - Increase Hawaiis VC pool use existing
  business support laws/programs more effectively.
• - Improve K-12 education infrastructure support
  UH School of Business Entrepreneurship.
• - Direct marketing funds to co-brand Hawaii as
  an attractive business/technology location.
• - Help reduce rising costs of doing business in
  Hawaii.

• Hawaiis Business Community/Technology Sector
• - Enhance VC interactions promote successful
  business stories accept failure as part of
  progress.
• - Broaden awareness of business
  resources/options to support growth and
  diversification.
• - Establish D.C. presence, and leverage DoD
  connections to fund commercial development.
• - Set realistic targets, identify champions, and
  increase mid-level management/administration
  capabilities.

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2003 Hawaii Business Transformation Wargame
RESULTS How Did We Do?

• Business Strategies Market Development
• - intelligence on government and
  commercial market opportunities.
• - Business Climate
• - Political Climate
• - Role of university as engine for
  business growth
• - Role of federal centers as engine for
  business growth
• - Brand recognition for the state

D
B
NR
C
B
C
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2003 Hawaii Business Transformation Wargame
RESULTS How Did We Do?

• Financing Technology Enterprise
• - funding for early stages of technology
  development
• - assistance available through State and
  Federal programs
• - need to accept failure as an integral part
  of the tech growth enterprise
• - need for employee incentives and training
  programs to keep pace with technology markets

F
C
C-
D
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2003 Hawaii Business Transformation Wargame
RESULTS How Did We Do?

• Optimizing Human Capital
• - the shortage of technologically-trained
  human resources
• - shortfalls in our state education system
• - opportunities for workforce training
  through private sector internships
• - the need to develop top-flight
  scientists and highly qualified business
  professionals to grow our technology industries

D
B
C
C
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2003 Hawaii Business Transformation Wargame
RESULTS How Did We Do?

• State Administration
• - help create environment where job growth,
  investment and business can flourish.
• - forge strategic partnerships giving local
  firms access to business and financial expertise
• - establish a Chief Innovation Officer.
• - serve as a conduit of information to Hawaiis
  technology sector

B
C
F
C
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2003 Hawaii Business Transformation Wargame
RESULTS How Did We Do?

• The Legislature
• - help increase Hawaiis VC pool
• - use existing business support laws more
  effectively
• - improve K-12 education infrastructure to
  better prepare our youth for technology-based
  employment
• - help co-brand Hawaii as an attractive
  business and technology location
• - help reduce the costs of doing business here

F
C
C
C
C
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2003 Hawaii Business Transformation Wargame
RESULTS How Did We Do?

• Hawaiis Business Community/Technology Sector
• - enhance interactions with VCs
• - promote successful business stories and
  accept failure as part and parcel of progress
• - broaden awareness of business resources and
  options to support growth and diversification
• - establish D.C. presence, and leverage DoD
  connections to fund commercial development
• - set realistic targets, identify champions,
  and increase mid-level management and
  administration capabilities.

D
C
D
NR
D
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2003 Hawaii Business Transformation Wargame
Overall Grade
C-
We Can Do Better!
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DBEDT Leadership Team Hawaii Approach

• Partner with Hawaii businesses in missions to
• - Palo Alto Venture Capitalists Meeting
  Planners (May 2003)
• - San Diego SPIE Annual Convention (Aug. 2003)
• - Honolulu 1st Annual Asia-Pacific Homeland
  Security Summit Exposition (Nov. 2003)
• - Honolulu The Digital Media Visitor
  Industry Tech Conference (Jan. 2004)
• - San Francisco BIO 2004 (June 2004)
• - Shanghai, China The Hawaii Experience at
  Xintiandi (July 2004)
• - Honolulu 2nd Annual Asia-Pacific Homeland
  Security Summit Exposition (Nov. 2004).

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The HTDV Initiative

• Leveraging private and public assets to identify
  opportunities for dual-use technologies.
• Exploring funding avenues to accelerate the
  technology innovation, development and
  commercialization process.
• Supporting development, transfer and
  commercialization of Hawaii-built technology.
• Building on success of other technology
  commercialization programs.
• Emphasizing education and training as a means of
  supporting small businesses and enhancing the
  commercialization potential for innovative,
  advanced technologies.

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In Summary

• Hawaiis inherent advantages (location,
  infrastructure, natural resources, expertise)
  make the state competitive in global technology
  markets.
• Hawaii is already pioneering the forefront of
  many technology-related areas with tremendous
  potential for expansion and diversification.
• Our mission to create a society that is
  knowledge-rich, technologically proficient and
  globally competitive.
• Through expanding public-private partnerships,
  enhanced workforce training programs, creative
  government incentives, entrepreneurial
  initiative, and strong VC support, Hawaii can
  accelerate its momentum and achieve its rich
  potential in technology-based economic
  development.

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Mahalo and ALOHA!