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How to Revitalize Hawaii’s Economy – Extended Version

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Sullivan: (Affordability) also has to do with the ability of the homeowner to get a job that pays a decent salary. The professional trades and others provide decent jobs, but in the tourist industry there aren’t as many high-paying jobs, and I think what’s missing is this middle sector. If we had a broader distribution in the workforce, then it would help address some of these issues around affordability. You’re always going need entry-level, low-cost housing, and you’re always going to have the rich guys at the high end and some of them from California. That’s going to happen because we’re part of the same country incidentally. What we could do is create a broader middle class and the opportunity to move within that, and that goes to education. The tech sector can create some of those jobs. The financial sector could create some of those jobs. There’re other things we could add to the community and the economy, and I think that has to be part of the long-term strategy, and how to do that, because the ability to buy a home is one of those key issues.

Petranik:  We probably all agree that one of those key ways to revitalize the economy is to improve our public schools.

Okimoto: Part of the problem is the metrics by which we measure our kids. We’re measuring them by national standards, not necessarily a bad thing, but we have job opportunities that are a little bit different from Poughkeepsie, New York. We have a tourism industry that’s vibrant. We have a tech industry that could grow. I don’t think right now the educational system is directed towards what we have in Hawaii. In other words, workforce development. It’s also good that they (our students) can go to the Mainland and compete there.

I’ll use ag as an example again. Kirk made a point about people not being able to make enough money in agriculture and part of it is because of infrastructure development. The infrastructure costs for agriculture are huge. For example, Monsanto is here helping a lot of these guys develop irrigation systems, things like that, which lowers their cost going forward. That might allow ag companies to spend more hiring managers who can teach them how to grow better using GPS systems from the tech industry. As far as the educational system is concerned we need to look at the different industries here to see what skills these kids need to come home and work in businesses that are here. Partner with the private sector in developing (education for) specific job needs that they have and likely will have going forward.

Sullivan:  What happened in Tucson is very relevant. A very interesting study looked at how the University of Arizona-Tucson and the related community developed jobs in optics (one report on the issue: that supported and were largely part of the growth in communications, but it really started around astronomy. Here we are building a billion-dollar telescope here and where are the skilled technicians, which are really important, you know, they are a critical part of this around the rest of the world. Guys that can run a machine shop. Guys can actually build things. They don’t necessarily need to have a degree from a four-year school to be a huge contributor. We need those kinds of people and you’ve got engineers and you’ve got scientists. There’s an entire infrastructure, and on top of that you plant a billion dollars worth of optics here in the state of Hawaii. We’ve got an opportunity to grow all kinds of peripheral industries that can create all kinds of other things. Who could have dreamed up a better opportunity for the state, but what are we doing about it? Not a whole lot. You know we focused on a couple of the environmental issues and a few other things, but the community colleges, the (UH) College of Engineering, and the rest of the university, they should be part of creating jobs. For example, right now we’re trying to hire optical engineers, electro-optics and optics, and we can’t find them here. We’re recruiting from several schools around the country who, by the way, are getting big sums of money from NSF – National Science Foundation – just to create those jobs and create those skills, but we’re not doing it here. We’ve got a billion-dollar telescope plus all these other telescopes and we’ve got to go recruit from these other places. It’s insane.

Dancil: We’re starting to. Just last week Friday actually we hosted it at Oceanit. We had the community colleges come together, the engineering schools, and it was talking about if “are we preparing our workforce for the jobs of tomorrow?” And that we had some people from the foundation saying, you know, “these are the skills we will need going forward and everything is on the table, so talking about this, how can you start creating internships? How do you start connecting these kids to the private sector? I just held a SciTech Day thing and the whole purpose of the SciTech Day was getting back the day of education in light of Furlough Fridays, and it was scientists and engineers for six hours teaching these kids, but one of the objectives was to introduce these children that you’re just not studying a subject for the sake of studying a subject just to study a subject. Here is a company in Hawaii that utilizes it. Just make that connection, introducing these children to the sciences here. And then that is just one step that’s in the elementary school, but it’s fostering this whole pipeline of developments through elementary, through high school, through internships, and increasing the stickiness factor so that if they do go away to college and could go back and do an internship or something like that. So that they want to come back home as opposed to staying. For example, I was back from the states and I’m getting recruited by all these top firms, why would I want to come back to Hawaii? So, it’s just how do we make these children aware of our jobs and at the same time they’re aware of the skills sets going forward. The TMT (?) guys, they actually have a full slide of these are the jobs that are going to be coming forward in the next 15 years. Here’s the workforce skills that need to be necessary. How do we develop these educational programs to develop these skill sets? Because now I have all these cottage industries doing all these different things around optics, and we have one of the best places in the world to do any sort of optic work. That’s a big driver for a big name university guys.

Sullivan: If we give the kids a reason to stay in school and focus, they’ll exceed our expectations, I guarantee it. But they don’t understand why it’s important and the state could do a better job in sharing with them why it matters. I was talking about workplace development with the previous dean of the (UH) College of Engineering. He said: “If the kid hasn’t had math by the time he gets through high school, I can’t help him.” Well if the kid actually knew he needed to it, he might’ve actually tried it. And teachers would be excited if the kids were excited because there was a demand for these skills and there is a real need for students to learn them. They will rise to the occasion. Look at STEM (Science Technology Engineering and Math) and the robotics, it’s amazing what these kids can do.

Petranik:  It would be nice if STEM and that sort of stuff was as “cool” to students at football and baseball – if we as a culture could persuade more kids to say, "Hey, yeah, I want to be on the robotics team."

Sullivan:  They’re smart, they’re competitive, and they’re fearless. If we just give them the opportunity, they’ll exceed our expectations, but I think that’s where the state has to decide: “It’s time to start talking about it.” It’s time to let them know that those opportunities are there. We do that all the time, but for the Furlough Fridays we had 40 kids from the Kahuku, Farrington, a bunch of schools. It was really interesting. There’s nothing wrong with these kids. It’s sort of something wrong with the adults.

Fukunaga:  That’s where a lot of the efforts have been going on over the last five or six years, STEM initiatives, creative media. Those seeds have been planted and now you’re going to see the transition between this (state) administration and the next administration, the Legislature and Department of Business, Economic Development and Tourism. All these entities need to collect some of the information on just what’s available and what people are doing, because then I think people would be blown away and excited to see just how much has happened. Look at robotics. When we started some of these efforts, there were only three schools locally competing in FIRST Robotics ( In 2010, in the regional competition, there were 37 schools. Now, FIRST Robotics is the most expensive and the most complicated and the one that requires the most support, but to have gone from 3 to 37 within the space of four years is phenomenal. But a lot of people don’t really know that because each school, or each group, College of Engineering, Oceanit, NASA, BAE Systems, are providing funding or hosting a tournament. They’re all doing it somewhat independently, so we have to put together all those pieces and let people know just where we stand because I think the teachers are there. The ones who are participating are absolutely there. If they saw jobs available for their students, the students would not hold back, they would be racing forward.

Petranik:The unions and the construction industry have a problem with the school system because the graduates don’t have some skills that they need to take on the skilled trade.

Chock:  Yes, it’s been a major problem. One of the requirements into our unit (Carpenters Union) is a math test and it’s written at the 8th grade level, arithmetic, reading a ruler, a tape measure, 50 percent of the kids who are DOE graduates cannot pass our math entrance exam. Earlier, you asked what needs to be done in terms of education, the DOE. I think there’s a huge accountability problem right now and whether that’s solved by an appointed school or an elected school board, or removing principals who are underperforming or having principals remove teachers who are underperforming, there’s a question of who’s accountable and where does the buck stop. And I don’t think that it’s a money problem, that schools in Hawaii are being underfunded. When you look at other states that have some of the lowest per pupil spending in the country, Utah and Idaho, yet in terms of the standardized metrics and the outputs, they’re at the top of the food chain. Yet in Hawaii, we’re not bad in terms of how much we fund our schools, yet we’re not getting the results we want. I’m not sure where you start to deconstruct the whole issue. There’s a lot of press right now on the governance issue, but I think you’ve got to look at what assets are currently being deployed in the schools and are those assets working, and, if they’re not, how do we redeploy them.

Fukunaga: I think part of what Kyle is talking about is deploying resources more strategically. For example, we have not really had a state CIO (chief information officer) for the longest time and by the time, I think in the past administration (Gov. Cayatano), by the time the governor realized the importance and the value of a statewide CIO to consolidate areas where it makes sense to consolidate, utilize technology to eliminate bureaucratic cubby holes, but it was almost too late because that was the last two years of that administration. In the current administration (Gov. Lingle), we have a CIO, who is also the state comptroller, which we think is not a good, practical way of going about it. I think the city administration and Mayor Hannemann have done a really good job of identifying areas that IT can help to streamline and really help to make a difference on how to do business.

So, we had a very small, modest bill. It doesn’t have any money in it this year, but we did get the bill through the Legislature, (referencing) the auditor’s audit of state IT governance. We included in the statute that there should be a state CIO, cabinet level position, and there should be an advisory group made up of senior agency people who work with the state CIO to identify the best practices, the strategic deployment of resources, etc. It takes effect Jan. 1, 2011, really for the next administration, and we think that can save us a huge amount of money.

I think there is real value in approaching IT governance and assets from a strategic standpoint and looking for ways that, say, personnel systems, could be harmonized. It doesn’t have to cost a lot of money. Some things are going to cost money but you have great creative IT people in the state.

Nishizaki: I can’t tell you how to fix those issues, but one thing that all of businesses need to do is go out there to the young people and build their aspirations of who they want to become. Over the last four years, we’ve hired four local chefs, Rodney Uyehara, Jon Matsubara, Ryan Loo and Colin Hazama. These are all local guys. I encourage these local guys to go out there and talk to the kids. When you think of Alan Wong, he and I went to school together (Leilehua High) – these chefs are like the superstars. People look at big baseball players, big football players, but chefs can also go out and create that same type of enthusiasm. Because not every kid’s going to go to college, but KCC (Kapiolani Community College) is certainly an option for these kids to get a degree in culinary arts, and when they come out they aspire to be chefs, to be very creative and in high demand. So, there are some successes with the school systems have evolved.

I guess the concern I have is over the last several years, every so often the University of Hawaii keeps talking about either getting rid of the Travel Industry Management school, or consolidating it, and I’m working with them on that. Whether you consolidate or not I have a hard time understanding how state, when the No. 1 industry is tourism, we are going to just sort of dilute a program that is driving to develop the future managers. About five years ago, when I was with HHLA (Hawaii Hotel & Lodging Association) as a chair, we did a survey, 42 percent of all our general managers were locally born. Today, that number has dwindled. There is something wrong there. You have less and less managers who are locally born. Why is that important? Not to say that local people are smarter than anybody that comes from Cornell, but really truly one of the things that differentiates our industry, we call it the aloha spirit, but our spirit of sharing and caring. That has been true for us. As lead managers, we’ve got to make sure that you have more and more management people who are going take over for all the baby boomers because like myself who are going to take over and lead our industries. Again, tourism is going to continue to be for a reasonably good time our number one industry. We’ve got to support the good local people. I will say I see successes on the culinary size. I think about 42 percent of our chefs are locally born. Today, that number has climbed because of programs like KCC were devolving. These are the heroes, when they go out to the Waipahu (High School) travel academy and talk to these kids who aspire to be chefs, and they look up to Alan Wong, to the Roys, the Sam Choys. Colin Hazama, we hired him and he left and went to Princeville (Resort). He is a James Beard rising chef (semi-finalist for a 2010 James Beard award in the national Rising Star Chef category). There are not many. He is one. The highest paid employee, by the way, is a bellman (laughter).

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