Diversifying from Core Strengths

Hawaii has been obsessed with diversifying its economy. And rightly so. Too much of the economic base of these islands is concentrated in a single industry with a dominant customer base.

So, the state has tried to diversify via industries like high tech. And, so far, has failed spectacularly. The problem is this: you can't just wish for new industries. The environment has to be right for new industries to grow and prosper. In the case of high tech, there's a reason that Silicon Valley is where it is ... and that's Stanford University. With Stanford as a magnet, the valley has attracted a plethora of innovation and high tech companies. As much as I love the University of Hawaii, we're not in the same league. And once you attract innovators, entrepreneurs and creative thinkers, there's a spontaneous combustion that seems to happen when theses folks get together. So, a place like Hawaii with a paucity of creative companies just isn't exciting when it comes to attracting new talent.

So how does Hawaii innovate? I think the answer is in building from its core strengths. Find ways to diversify tourism. Find new revenue generating ventures based on what we already have. Export our expertise. Maybe then we'll generate the revenue to invest in the infrastructure that can build new businesses outside of our core strengths.