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A Little Byte of Paradise on Digital Island Tech Companies Gain a FootholdHawaii for Business & Pleasure
It may be a long time before the 50th state can point to its own "Silicon Beach" – a Hawaiian-style version of Silicon Valley. The Hawaiian Islands, after all, are still just a bump on the horizon of the high-tech world. But as technology knocks down the hurdles of geography, Hawaii has high hopes for lassoing a share of the knowledge industry. And some high tech pioneers who have set up shop here find that it stokes their creative juices.
For the high techie who could live anywhere, they say, Hawaii has a lot to offer. The Aloha State's balmy weather, natural beauty and easy-going lifestyle are a sure cure for burn-out. Hawaii's mid-Pacific location may be out of the way, but it can be convenient: Honolulu's workday overlaps with both Tokyo's and New York's. The island of Oahu, considered a strategic communications center for defense and geographic reasons, is one of the best connected sites on the planet, with abundant fiber-optic cable.
Here's a sampling of some of Hawaii's high-tech entrepreneurs:
RARE & DEAR
In an unlikely spot amid the coffee fields of southern Kauai, a software firm founded by a Silicon Valley refugee is flourishing. Rare & Dear, Inc., may sound like an antique dealer, but it's geared toward the 21st century, customizing database software for medium and large firms.
This July, Rare & Dear was named the fastest growing small business in Hawaii, with $1.5 million in revenue in 1997, up 1000 percent from $133,000 in 1995. Company president Ned Dana had been one of Oracle Corp.'s first employees, but gave up on the rat race and moved from California to Kauai in 1988. He later enticed other computer industry veterans to join him, and in 1994 launched his consulting company, specializing in Oracle technology. Rare & Dear, whose name was chosen to acknowledge its employees, recently opened offices in Honolulu and Oakland, California. Its headquarters, however, remain in rural Eleele, Kauai.
"We're here for life," Dana said. "The natural surroundings are vibrantly alive, especially on Kauai. The information business is awfully sterile at times, so we appreciate the balancing effect of having all this life energy around. The pace here is slower, which is important because there is so much detail in this industry. People get lost in that detail and miss the bigger picture. But you need to make sure that what you're going to do is the best thing, not just the thing you think of first.
"The power of a place like Hawaii pulls you back, and you slow down," added Dana, who encourages his co-workers to take breaks on a rope swing that hangs from a tree outside and funds regular massages for them. "It's a misconception that technology can't operate this way. It's OK to let the computers go fast but people need to slow down.
"We value teamwork and work hard at it. Our small community on Kauai supports that. There's an implicit sharing of wealth here. Time is taken for ohana (family)."
SQUARE CO. LTD.
Tokyo-based Square Co. Ltd., a leading maker of computer software and graphics for video games, opened a product development branch in Honolulu last year, egged on by its Japanese employees. The company already has an R&D facility in Los Angeles, and Hawaii was seen as a happy midpoint between its two bases, where workers could feel comfortable culturally. "The main reason we came is quality of life," said Junichi Yanagihara, senior vice president of Square USA. "Being a Japanese company, we have many people who expressed an interest in living in Hawaii. Some of them indicated that in L.A., they would need a car and have to worry about safety. They felt maybe Hawaii is much safer. Also, language-wise they would have fewer problems in communication.
"Obviously, Hawaii has a lot to offer. Our creative people are very happy; they do much better here. We have a beautiful ocean view from our window (in Honolulu's Harbor Court penthouse). For us, the people are the most important. If they can't be happy, they can't be creative.
"We are a computer software company; so as long as we have computers and power, location is not a problem. Of course we were initially concerned about whether Hawaii had adequate facilities to support our business – we rely on electric power supplies and telecommunications facilities – but after our initial investigation, we were satisfied with both."
DIGITAL ISLAND
Ron Higgins and his wife Sanne left Silicon Valley to start their new business in Hawaii, their home state, not simply for nostalgia, but because of the islands' abundant supply of fiber. Digital Island, a global network data center, helps multinational corporations sidestep Internet traffic jams with secure, single-hop connections around the world.
"The main reason we are in Hawaii is its access to the international fiber-optic telecommunications circuit," said Ron Higgins, Digital Island's chairman. "It gives us access to fiber outside the mainland domestic network so we can get direct circuits in Asia and Europe.
"There are a few places in the world where there is a high concentration of fiber; Hawaii is one of them. We look at Hawaii as a big pipe going East and a big pipe going West. It's half the price to buy a circuit from Honolulu to Tokyo than it is to buy the exact same circuit from Tokyo to Honolulu, so there's a price advantage to being in Hawaii.
"Communications and the Internet is an export industry for Hawaii. The potential is there. One of the things that we're learning as we advance as a society is that knowledge workers can work wherever they want to with the communications infrastructure. So why not work in paradise?"
ADTECH
Ned and Kathryn Weldon established AdTech, Inc., in Honolulu 30 years ago, and the company, now owned by London-based Bowthorpe PLC, still maintains both its R&D and manufacturing facilities here. A designer and maker of telecommunications testing equipment, AdTech specializes in ATM (Asynchronous Transfer Mode) testing gear, competing with Hewlett Packard.
"Why Hawaii?" asks Ned Weldon, AdTech's managing director. "The main advantage, which is very contrary to common knowledge, is our ability to hire terrific people and to import them from the mainland. Our business succeeds on hard work and brain power. Many of our best employees are people from Hawaii who went to the mainland and returned. It takes very little incentive for them to come back."
"We sell our products all over the world. It wouldn't matter if we were in Kansas, because it's not about local business. Geography is not an issue," he said, noting that the company's high-value, low-weight products are well suited for air freight. "We've averaged 55 percent growth per year over the past eight years. It's amazing. I've never even thought about moving the business elsewhere."
UNIDEN
Uniden Corporation, a wireless multimedia communications giant based in Japan with $900 million in annual sales, opened a research and development center in Honolulu last year, attracted in part by the caliber of local engineering graduates.
"The bottom line is that our corporate leadership loves it here," said Dan Ishii, executive vice president. "What attracts most people is the whole package: The climate, the people, the lifestyle, the cultural mix are all conducive to doing business here.
"What we found in Hawaii is a technology niche, a human resources niche and a great climate. The University of Hawaii was churning our highly qualified engineering and computer science graduates who were leaving the islands for jobs on the mainland. We found a ready pool of potential hires."
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