What do Asians think about doing business with Hawaii? We had a get-together last week in Honolulu that looked at that question with folks from Japan, the Philippines, South Korea and Taiwan. Although the discussion was specific to Hawaii, some of it might apply to business on the U.S. mainland, too.
Hawaii, of course, must live with its reputation for outstanding tourism. Tourism is our top industry by far, but it hides our efforts and success in other lines of business. One of the participants in our meeting came from the U.S. East Coast, where he had trouble convincing people that he wasn’t just coming out here on a boondoggle. Many people can’t imagine a business reason to come to Hawaii, thinking only of the sun, sand and bikini image we have.
Japan, however, has discovered an excellent reason to do business here. Hawaii, being a part-Asian, part-American community, is a fantastic halfway house for Japanese businesspeople to get used to American culture and practice before heading off to the U.S. mainland. Perhaps more important, small business in Japan is discovering that it is easier and less expensive to do their American market testing in Hawaii rather than on the mainland.
Hawaii’s development of alternative energy has seized Asia’s attention. The State of Hawaii is pushing hard to reduce Hawaii’s dependence on oil, all of which must be imported. The state already has one of the world’s highest concentrations of solar panel installations and growing wind turbine farms. But where we really shine, and Asians have noticed, is development of ocean-oriented alternative energy sources. We are the world’s leader in designing and installing deep ocean pipes that bring up cold sea water from thousands of feet down. That cold, deep water is already being used to air condition the Natural Energy Laboratory of Hawaii on the Big island, and a deep pipe is under construction to cool many of the buildings of downtown Honolulu. Waikiki is next. The pipes and pumps to move the water on land costs money up front, but the fuel is free – forever. Hawaii is also in the forefront of developing wave energy systems. Further behind, but coming on, are Hawaii firms that design ocean thermal energy conversion (OTEC) systems. Then there is geothermal energy near the Big Island’s volcanoes. The Korean participant in our meeting said that his country would be particularly interested in developments for smart grids and undersea electric cables.
Other Hawaii industries that attract Asian attention are educational services and tourism. We see growing numbers of Asian students coming to Hawaii’s colleges. And many of the companies who built Hawaii’s tourism facilities are getting jobs to do the same in East Asia.
Asian companies like to do business with Hawaii firms because of our knowledge and level of comfort working in Asian cultures. But our Asian friends still see some holes in our knowledge – and these apply even more to companies from the U.S. mainland. When we think about doing business in China, for instance, Hawaii’s companies want to look immediately to Shanghai or perhaps go into China with a Hong Kong partner. Few think about teaming up with a Taiwanese firm, even though Taiwan’s companies have been working in southern China for nearly thirty years.
The spokesman for the Philippines suggested that Americans have not yet caught up with the changes in doing business there, arguing that there is now far less corruption and red tape than we imagine.
When asked how Hawaii and the United States should take advantage of the still-new U.S.-South Korea free trade agreement, we were told that Americans need to broaden their view of Korean business. The Korean economy is not just the big chaebols and we might do more and easier business with smaller Korean companies. Ironically, this is the flip side of the common Asian assumption that all American companies must be in the Fortune 500. Get rid of that idea and we increase our comfort level for doing deals.
One specific business opportunity was mentioned. Taiwan is becoming a coffee-drinking market. There are coffee houses all over Taipei. Hawaii coffee is respected and highly sought-after, so there can be significant price premiums. If you are a Hawaii coffee producer, go for it!