Program Accelerates Hawaii’s Innovation Economy
HONOLULU – A new report shows that a state investment program run by the Hawaii Strategic Development Corporation (HSDC), an attached agency of the Department of Business, Economic Development and Tourism (DBEDT), has successfully jumpstarted Hawaii’s startup ecosystem.
According to a new report by the Economic Research Organization at the University of Hawaii (UHERO), the HI Growth Initiative is creating jobs and leveraging state dollars to encourage private investment.
The HI Growth Initiative is a state equity investment program created to promote Hawaii’s innovation sector and mobilize private capital for local entrepreneurs running high growth businesses.
UHERO economists surveyed nearly 50 businesses and found that the HI Growth Initiative is leading to nearly $12 in private investment for each dollar invested by the state. The companies surveyed also reported total in-state expenditures of approximately $10.8 million and generated more than 150 Hawaii-based jobs.
“We need to continue to support innovation to create and environment for entrepreneurs to grow and succeed,” said DBEDT Director Luis Salaveria. “The state’s overall growth strategy focuses on investing in infrastructure, attracting capital and developing talent, which will position Hawaii to become an innovation and knowledge-based economy.”
From its start four years ago, Hawaii’s innovation ecosystem today includes six startup accelerators (three of which have been nationally recognized by the U.S. Small Business Administration and a fourth that was ranked in the top 20 nationally), six Hawaii-based venture capital funds, gigabit-enabled co-working spaces, business incubators, research commercialization programs and events year-round aimed at developing entrepreneurs.
Entrepreneurial programs have been launched across multiple platforms: software/tech, film/creative media, clean energy, value-added agriculture and university research. The innovation sector makes up about 7 percent of total jobs in Hawaii, according to a 2014 report from the Hawaii Business Roundtable.
“Today’s entrepreneurs work with technology and use digital platforms to compete globally. These knowledge-based businesses need access to equity investment capital,” said HSDC President Karl Fooks. “The HI Growth Initiative helps motivate private investors to bring those capital resources to Hawaii for local companies.”
Launched by HSDC in 2011 with a $13 million grant from the U.S. Department of the Treasury’s State Small Business Credit Initiative, the HI Growth Initiative currently provides $20 million investment capital, which has in turn generated more than $60 million in additional funding.
“By investing in a broad array of accelerator programs, the HI Growth Initiative is facilitating the development of an innovation ecosystem in Hawaii and may finally provide the necessary impetus to draw attention to entrepreneurship in the state, leading to further growth in venture capital, one of the necessary ingredients in a vibrant innovation ecosystem,” said UHERO Executive Director Carl Bonham.
The report may be viewed at: hsdc.hawaii.gov/wp-content/uploads/2016/02/Evolution_HIGrowth_Initiative.pdf
About DBEDT (Department of Business, Economic Development and Tourism)
DBEDT is Hawaii’s resource center for economic and statistical data, business development opportunities, energy and conservation information, and foreign trade advantages. DBEDT’s mission is to achieve a Hawaii economy that embraces innovation and is globally competitive, dynamic and productive, providing opportunities for all Hawaii’s citizens. Through its attached agencies, the department fosters planned community development, creates affordable workforce housing units in high-quality living environments, and promotes innovation sector job growth.
UHERO conducts rigorous, independent economic research on issues that are both central to Hawaii and globally relevant. UHERO distributes its analysis widely to promote research driven dialogue and inform public- and private-sector decision-making in Hawaii.
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Department of Business, Economic Development and Tourism
Phone: (808) 587-9006
Mobile: (808) 286-9017
Hawaii Strategic Development Corporation