How the University of Hawai‘i Diversifies the Economy and Nurtures Entrepreneurs
President David Lassner describes the system’s statewide impact, its seven areas of innovation and its goals for the decade ahead.
I interviewed David Lassner, president of the UH System, which includes three universities, seven community colleges and nine learning centers. Tim Dolan, president of the UH Foundation, also participated in the interview. The transcript has been condensed and edited for clarity.
Let’s start at the 30,000 foot level: What is the role of the UH system in Hawai’i’s economy?
Lassner: It is huge. The last estimate from UHERO was for fiscal year 2020 (July 1, 2019, to June 30, 2020), partially during the pandemic, was about $3.66 billion in local impact.
That includes sales, employee earnings, tax revenues and so forth. They put us at about 3% of the state’s economy, which is actually ahead of agriculture and utilities. That includes about 22,500 jobs, direct and indirect.
The other impact is our education of students. UHERO estimates the life-time earnings of different degrees beyond high school, so an associate degree is worth around $300,000 in additional lifetime income over a high school diploma, a bachelor’s degree about $1.5 million, a graduate degree over $2.8 million.
In year 2020, we awarded over 9,300 degrees. The lifetime-earning impact of those 9,300-plus degrees is over $7 billion for those individuals. Then think of that each and every year.
The UH system has published the first draft of its strategic plan for 2023-29. Give us a summary of that draft plan.
Lassner: We have four imperatives. The first is “successful students for a better future.” It pulls together all our agendas around graduating more students and providing successful experiences for them along their educational journey, including support they need to be successful as citizens, as employees, as people who start businesses and so forth.
The second imperative is “meet Hawai‘i workforce needs of today and tomorrow.” This grows a lot out of our work during the pandemic, when we realized that even as so many people were losing jobs in the hospitality sector, other employers were struggling to fill openings. This is about a more complete alignment between what employers need and what our graduates know and learn – both degree and certificate students.
We want to focus on jobs that pay a living wage, including in health care, technology, skilled trades and so forth. That includes building stronger partnerships with employers, so we can stay aligned.
We also want to pay a lot more attention to imparting our graduates with an understanding of innovation and entrepreneurism. They are going to be the ones creating new jobs in Hawai‘i through new business enterprises and ideas. We also want them to understand that the economy they retire from will not be the same as the economy they graduate into. They will be part of that transformation and they need to be able to respond to it.
The third imperative in the draft of the strategic plan is “embrace kuleana to Hawaiians and Hawai‘i.” Our last plan really looked at this priority to become a model Indigenous-serving university. Within the university we talked about our responsibilities to enroll more Hawaiian students and help them succeed.
And we’ve done quite well at that as a system: We actually have a higher percentage of Native Hawaiian students than there are in the population of Hawai‘i as a whole. That’s not true in every discipline and on every campus, but as a system, we’re doing well. We’ve increased the number of Hawaiian faculty and we’ve increased the number of Hawaiian staff and administrators.
Our board of regents has given us this challenge: Hawai‘i really won’t succeed as a place for all of us – Hawaiians and non-Hawaiians – if we don’t address some of the issues that have challenged Hawaiians in the community for 125-plus years. UH should be part of how our entire community comes together to heal – if you want to use the word reconciliation – to bring us closer to dealing with the impact of the illegal overthrow and annexation.
The last of our imperatives is around the economy and should be near and dear to your readers: “Diversify Hawai‘i’s economy through UH research and innovation.”
Diversification of the local economy has been an elusive holy grail for decades. Tell us how UH hopes to drive that.
Lassner: Our goal is to build and sustain a thriving UH research and innovation enterprise that addresses both local and global challenges by linking fundamental scientific discovery with applied research that is necessary for the technological innovation to create jobs and advance a knowledge-based economy.
We’ve identified seven areas for research and innovation hubs:
• Climate resilience, energy and sustainable ecosystems.
• Ocean, earth and atmospheric sciences.
• Astronomy and space sciences.
• Data sciences and global cyber-security.
• Health and wellness.
• Food security and agriculture.
• Asia, the Pacific and Hawai‘i.
These are all areas where we think Hawai‘i has some compelling, competitive global advantage.
We also think these are sectors where the expertise and innovations that we develop will bring in money from other places. Our research enterprise is now a half-billion dollars in the latest fiscal year (July 1, 2021, to June 30, 2022). That is our largest year ever and it has been growing.
But beyond the money that we bring in to UH to execute projects, when we link that to innovation and entrepreneurism, those can create private companies and private jobs that thrive beyond the specific research funding we bring in.
We think we can be a force for societal transformation here. One thing we’ve been investing in – and it’s already paying off – is Indigenous innovation as a real strength of Hawai‘i and the University of Hawai‘i.
And one of my new favorite gifts is a $4.6 million anonymous gift to fund our new Center for Indigenous Innovation and Health Equity. We think we can bring together the pieces so we can learn from how Hawaiians lived and thrived before contact and during those early years after contact, and combine that with the best knowledge that our modern scientists bring us through an understanding of data, the human biome and genetic sequencing. All of this brought together can help create a healthier Hawai‘i and be applicable in other places. Bringing those two types of knowledge together will be valuable in other areas, too, such as ecosystem restoration and preservation.
One of the four imperatives in the draft strategic plan is “Meet Hawai’i’s Workforce Needs of Today and Tomorrow.” A lot of that training and education is happening at the community colleges, because it has to be faster than a four-year degree to serve current needs. Tell us about some of those job training programs.
Lassner: You’re right: The community colleges have taken the lead on rapid response. A lot of those programs are shorter than even two-year associate degrees. They have focused on partnerships in specific areas where employers tell us they need people.
We’ve been extraordinarily effective in competing for federal dollars. And we’ve also partnered with counties, which have access to federal funds to get employees back to work.
Key areas for that training have really been in four areas: technology, health care, skilled trades and sustainability/resilience. The four-year universities are emphasizing these areas as well because many of those jobs – nursing, teachers, many jobs in technology – do require two-year and four-year degrees. We’re all in at every level.
Key to that is a closer engagement with the employer, community and industry groups like the Healthcare Association of Hawaii, Chamber of Commerce and Hawaii Business Roundtable.
Tim, what’s the mission of the UH Foundation and how is it fulfilling that mission?
Dolan: The mission is pretty straight-forward: We’re interested in increasing philanthropic investment across all 10 campuses of the UH system. Although the sort of mothership of philanthropy for us is Mānoa, we want to make sure all our institutions are looked after. So we have staffing in different ways on all 10 campuses.
The way we’re trying to garner more philanthropic support is less about charity and handouts and more about solving problems. That’s what our donors really want to do most. They want to tackle something they see as not right. Maybe it’s a deficit area, maybe it’s something they feel we’re not focusing enough attention on. Maybe it’s a medical issue. Whatever it is, they want it to improve and they see the university as a way to improve it.
Can you give us specific examples?
Dolan: Last year, for instance, donors came to us and said, “I’m really concerned about the coral bleaching in Kāne‘ohe Bay and what are you doing to help reverse that pernicious cycle?” Donations have supported some really impressive wins in that space because our ocean scientists are among the very best in the world.
You’ll remember the Chan-Zuckerberg Initiative’s $10 million gift for better health outcomes on Kaua‘i. That arose out of a concern that it’s hard to staff rural and remote doctors on our Neighbor Islands, because for many doctors coming out of medical school with student debt, the Neighbor Islands may not be their first choice to live. The Chan-Zuckerberg Initiative will help Kaua‘i and the other Neighbor Islands become more attractive for these young people.
What role does UH play in creating the next generation of entrepreneurs? Mānoa’s Shidler College of Business is a big part of that, but please also discuss the role of other departments and campuses.
Lassner: You’re right, Shidler is a big part of it. And we’re really excited about the RISE project, one of our really impactful public-private partnerships. That’s the remaking of the Atherton Y into an innovation and entrepreneurship-focused student residence hall right across the street from Shidler. It’ll be our first live-learn-work experience modeled on something we saw in Utah.
Record-Breaking Fundraising For UH Foundation
The UH Foundation raised a record $164.98 million from 18,074 donors during the 2022 fiscal year, which ran from July 1, 2021, to June 30, 2022.
Here are some gifts of $250,000 or more announced this year by the foundation to support UH and its programs:
• A seven-year, $50 million commitment from Dr. Priscilla Chan and Facebook founder Mark Zuckerberg to research groups within the Hawai‘i Institute of Marine Biology to support ocean health restoration. This is the largest single gift ever to UH.
• $10 million over six years to the John A. Burns School of Medicine from Chan and Zuckerberg to fund the new Kaua‘i Medical Training Track, a program to help address Kaua‘i’s physician shortage and improve access to health care services.
• $4.6 million donated anonymously to fund the new Center for Indigenous Innovation and Health Equity.
• $3 million from an anonymous donor to endow scholarships at UH Hilo, including one supporting LGBTQ students.
• $1 million from UHA Health Insurance to the John A. Burns School of Medicine to support student learning, in honor of UHA founder Max Botticelli.
• $1 million from Jay H. Shidler to start the Dean’s Innovation Fund at the William S. Richardson School of Law.
• $1 million from HMSA to establish an endowed professorship in health economics at the UH Economic Research Organization.
• $1 million from American AgCredit and CoBank to support the College of Tropical Agriculture and Human Resources’ farmer training program.
• $660,000 from the Alaka‘ina Foundation to support four programs.
• $575,000 grant from the Lumina Foundation to support a more inclusive and sustainable economy.
• Nearly $450,000 from the Hawai‘i Pacific Foundation to help programs that benefit Native Hawaiian students.
More than $3.7 million has been raised to support the RISE project in entrepreneurship. That includes these five gifts:
• First Hawaiian Bank Foundation and Walter Dods: $500,000
• Hawaiian Electric Industries and American Savings Bank: $500,000
• ProService Hawaii CEO Ben Godsey: $250,000
• Island Insurance Foundation: $250,000
• Rich and Eileen Wacker: $250,000
Our efforts to spark entrepreneurship are taking place in a whole bunch of ways. A lot of it comes out of our research enterprise: We’re trying to get more of our research into the commercial marketplace. Over about seven years, we’ve supported about 140 start-ups out of UH that have generated a little over $10 million in revenue and 120-plus jobs. We’ve got almost 150 patent license agreements in play right now. We’re also chasing federal money for innovation and entrepreneurship – I think we got over $4 million last year as part of that $500 million that I mentioned earlier.
Our inaugural Makers’ Market at the Royal Hawaiian hotel that we ran with our alumni association was pretty remarkable. We had nearly 30 alumni businesses – people with fashion products, beauty products, vintage aloha shirts, food and drink, all kinds of alumni start-ups. It was multigenerational: We had recent graduates, but we also had people operating businesses that their auntie or mom started. It was so successful that we’re doing another tonight during homecoming weekend.
Engineering is a good example of nurturing entrepreneurship. They do something called VIP, vertically integrated projects, where students carry projects through from idea to design. This is more than a one semester project and we give them the capacity to do what you have to do in a business, which is go from idea to sales.
We have business plan competitions, the PACE program, which will be working in the RISE at the Atherton Y property. HITide is the next generation of our internal innovation incubator program for UH students, faculty, alumni.
We’re also active on the Neighbor Islands. We have the Maui Food Innovation Center at Maui College, which has won national awards. It looks at what it takes to get a food product from idea to production, packaging and sales. We’re hoping this will contribute to food sustainability within the state.
We’ve got important initiatives at Kaua‘i Community College: Students there teamed up with students at a Jordanian university for a sustainability summit.
And in the spirit of carrying projects from idea to production, our students have also participated regularly in the national Solar Decathlon. So this is everywhere throughout UH, not just Mānoa and not just engineering and business.
One of the four imperatives in the draft of the strategic plan is “Embrace Kuleana to Hawaiians and Hawai’i.” What will be the economic impact of that focus?
Lassner: This covers a lot of areas, including workforce. One of the teacher shortage areas is at Hawaiian immersion schools. The DOE is having trouble recruiting enough people with teacher credentials who are fluent in Hawaiian and can teach in Hawaiian. UH’s training of those people supports the schools.
It also supports the goal of building a tourism industry that is more reflective of local culture and Hawaiian culture. It will need people who understand Hawaiian culture and language. Hilo has created a hospitality and travel sector around what they are doing at Hilo’s Ka Haka ‘Ula O Ke‘elikōlani College of Hawaiian Language.
They have the only Ph.D. program in the world focused on revitalization of Indigenous languages. They have people coming from all over the world, looking at how to revitalize their languages, as well as students from Hawai‘i.
The revitalization of the Hawaiian language is grounded in the work of UH faculty, both at Mānoa and Hilo. One of our most heavily enrolled courses across the UH system is the introductory Hawaiian studies course. These include students who are not coming to get a Hawaiian studies degree but are hungry for that kind of education.
We will have a healthier economy in Hawai‘i if our Hawaiian population is doing better. Hawaiians are over-represented in incarceration, homelessness, health disparities and some health challenges and they are underrepresented at the highest income levels and in executive jobs. So when we do our job well, we will address those disparities, and we will have a healthier and a more economically vibrant Hawai‘i.
The imperative is also informing the way we do a lot of our sciences – we’re adopting some of the techniques that ancient Hawaiians used. We’re embracing many of our young Native Hawaiian scientists, who are holding Ph.D.s and bringing together their ancestral knowledge and their scientific learning, to create a more powerful capacity to understand our people and place.
So this is not just about beefing up studies in Hawaiian language. Every unit and department – architecture, engineering, nursing, medicine, journalism – is looking at it. The Hawaiians lived in harmony with the environment and we don’t today. What can we learn from that that is applicable today?
What is UH’s role in moving TMT forward and getting that telescope built?
Lassner: With the law that was passed, UH has been institutionally removed from any future decision-making. We will continue to participate and support the new Mauna Kea authority that isn’t yet running. We have a sitting regent who will serve on that and the UH Hilo chancellor is a nonvoting member. UH is a very active participant in astronomy at the summit, but in terms of decision-making, we have become a bystander by law.
Sometimes people on the neighbor islands say too much emphasis is placed on UH Mānoa. What is the UH system’s role in neighbor island economies and communities?
Lassner: UH Mānoa is the 900-pound gorilla within the UH System. It’s the only research university in this state. There is no economic vibrancy in any location without a major research university of some kind. So that’s a reality. Fortunately, UH Mānoa is engaged throughout the state and has programs throughout the state.
Our campuses tend to be among the largest employers on the islands. I think UH Hilo is probably the largest employer in East Hawai‘i. Mānoa’s Institute for Astronomy has a presence there. The astronomy program is one of the largest economic sectors on both Hawai‘i Island and Maui.
Our extramural enterprise is a state-wide enterprise. Of that $500 million, a large part of that is spent on campuses other than Mānoa. Our community colleges are bringing in extramural dollars to support their research and training agenda.
Some of the huge projects we have are on Maui: the Maui High Performance Computing Center and the Pacific Disaster Center in Kīhei. That’s probably over 100 of the best jobs on Maui working in technology. The same goes for astronomy, up at Haleakalā, and our College of Tropical Agriculture and Human Resources. The work we do in agriculture is statewide and our extension agents are scattered around the state, as are our ag research facilities.
Workforce training is statewide, reflecting the needs of the population in each location. UH Hilo has partnerships with many Hawai‘i Island employers to focus on workers in positions that require bachelor’s degrees. Both UH Hilo and Hawai‘i Community College are partnering with the health care sector. We do work on teacher pathways on the Neighbor Islands as well.
The foundation receives money from Pūlama Lāna‘i, Larry Ellison’s outfit, to support education on Lāna‘i all the time. Our Molokai Education Center and our Lanai Education Center are the only sources of higher education on those islands, and they support educational programs from all of our campuses.
So we’re everywhere, both through UH Mānoa, which has a statewide kuleana, but also through our campuses and education centers on every island.
One of my favorite things is the graduation on Moloka‘i, which they hold only every four years because they don’t have that many graduates every year. The families come out, who are so proud of their students, and UH is awarding everything from associate degrees to bachelor’s and master’s degrees and even an occasional Ph.D. to Moloka‘i residents.
Men have fallen behind women in university enrollment and graduation rates, and this is nationwide. How is UH helping men succeed in college?
Lassner: We’ve had tremendous success in working with underrepresented populations. Native Hawaiians were under-represented and are underrepresented in some disciplines, Filipinos, Pacific Islanders, economically disadvantaged students, rural students, first-generation students, those whose parents did not go to college. We expect that what we need to do is dig in using some of those same strategies for men.
It starts with working with the DOE, making connections in the high schools, if not in middle schools and elementary schools, to create an awareness of the importance of going to college. The new DOE superintendent, Keith Hayashi, is a great partner who believes in this as well. We expect to be working more closely.
We will apply the discipline that we have to help underrepresented populations and say, “Males have become an underrepresented population.”
It’s ironic to think, here in the 50th year of Title IX – which was driven by Patsy Mink being refused entry to medical school because she was a woman – that the story has flipped. We have been so successful in getting women into higher education, that males are now the underrepresented gender. Addressing that is hard work that we know how to do.
Anything else happening at UH that you think our readers would be interested to hear about?
Lassner: At UH Mānoa, we have the largest entering freshman class in our history this year, over 3,100. Our philanthropy number was the highest ever. Our extramural funding was the highest ever.
We are looking at the impact of the pandemic on our key metrics around graduation rates and retention, but all of that was on the upswing for at least five, six, 10 years before the pandemic, depending on the metric and the campus. And we probably took a hit, but we should be able to get that back on track starting this year.
We are focused on the needs of the state I think in ways we never have been before. So it’s really a good news story and where we’re struggling, we’re in good company with what’s going on around the country. Community colleges are struggling everywhere; we are struggling less. Small regional universities are struggling everywhere; we are struggling less.
The community colleges are doing far more workforce training than ever before. Hilo and West O‘ahu are doing more early college, which is one of the ways we’re reaching into the public high schools to get more students.
We’ve developed this program out of the Native Hawaiian Place of Learning Advancement Office called Truth, Racial Healing and Transformation. We’re really looking at how to become transparent about race, including but not limited to Native Hawaiians, across the university campus. And we’re a national leader in this kind of work.
The UH Foundation’s fundraising totals have grown over the past four fiscal years:
Outside Money for UH
Extramural funding to the UH System has grown each of the past three years.
“Extramural funding is external investments from the federal government, industry and nonprofit organizations that support research and academic activities conducted by university faculty and staff,” UH says.
About 70% of the funding in the latest fiscal year was directed to programs and research at UH Mānoa, with the rest directed elsewhere within the UH System.
Donations to the UH Foundation are not included in the extramural funding.
Here are extramural funding totals for the past four fiscal years:
- 2019: $421.8 million
- 2020: $456.6 million
- 2021: $485.5 million
- 2022: $505 million
Fall 2022 Enrollment Down on All Campuses
Dan Meisenzahl, UH System Director of Communications, says the enrollment figures are not surprising because strong employment markets – like the current one – usually drive down enrollment at UH and elsewhere in the country. But he adds that UH is outperforming its peers. He says that nationally, public two-year colleges on average have suffered an even larger decline in enrollment over the past four years – down 23% nationally vs. 16.1% for UH. He also says that enrollment figures over the past 12 months do not include about 5,150 students enrolled in noncredit, workforce programs at the UH community colleges – with around half taking apprenticeship programs in skilled trades.
Record High Graduation Rates at UH Manoa
UH Mānoa reports its best graduation rates since 2005, when records first began being collected.
• The four-year graduation rate for students who began in Fall 2017 was 39.7, with another 23.9% of students transferring to other colleges and universities.
• The six-year graduation rate for students who began in Fall 2015 was 58.9%, with a 27.5% transfer-out rate.
Find more details and the graduation rates for all UH campuses at tinyurl.com/2h8a6eff