Hawaii businesses are eager to get a share of an additional $5 million in grants that state lawmakers have made available to grow manufacturing across the isles.
“This (additional fund allocation) is a huge milestone for the tech industry,” said High Technology Development Corp. Executive Director Robbie Melton, whose state agency organized the 14th biannual Hawaii Small Business Innovation Research Conference, which brought together more than 100 businesses this week in Waikiki. “It’s the most new programs that we’ve seen in one year. I still have to pinch myself to believe that it’s true.”
Melton said it’s unusual nationwide to see so many state grants for manufacturing, which is increasingly becoming high tech. Since 1989 more than 90 Hawaii companies have received more than $141 million from the federally funded Small Business & Research (SBIR) grant program. However, the state match during that same period was only $10 million.
State lawmakers last session agreed to provide $2 million more to match SBIR federal grant awards up to 50 percent. The lawmakers also funnelled an additional $1 million into the Hawaii Office of Naval Research Program, which provides some matching funds for Hawaii companies that are developing energy projects with Office of Naval Research funding. They also created a new $2 million state manufacturing grant, which can provide companies with up to $100,000. Melton said HTDC will oversee the grants, with applications expected to be posted online at htdc.org Opens in a new tab in the next month or so.
Melton thinks Hawaii legislators increased support this year because they recognized the importance of helping startups bring their products to market.
“If we, as a state, don’t take care of our companies, we’ll see them fail or move out of state,” she said.
Melton said state lawmakers also saw expanding manufacturing as critical to meeting the 80/80 initiative, a movement started in November that seeks by 2030 to create 80,000 tech and creative jobs that pay at least $80,000 a year.
“Parents say that their kids are moving to the mainland because there aren’t enough high-paying jobs here,” she said. “At the same time, I hear tech companies say that they have to hire from the mainland because there aren’t enough skilled workers here. There’s a disconnect. We are trying to bring the industry and education together to solve this problem.”
Wayne Inouye, executive director of Innovate Hawaii, said bolstering manufacturing could pay off.
“Nobody goes to the university and says, ‘I want to be a manufacturer and work in a plant,’” Inouye said. “By creating new high-tech manufacturing jobs, we can make a change. We won’t probably see much movement within the next year, but hopefully we can stimulate demand and get more training in place within the next two years. It’s very important. We all want to keep our kids here, and we all want them to have good, high-paying jobs.”
Inouye said the extra stimulus should pay off since past SBIR grant recipients have used their funding to start projects that resulted in highly successful commercial ventures. Past recipients have included Makai Ocean Engineering, which just completed the world’s largest operational Ocean Thermal Energy Conversion power plant; Oceanit; and Referentia Sytems, which develops high-tech security and other solutions.
Representatives from some of these companies and others that attended the multiday conference had access to senior-level representatives from federal funding agencies, including the U.S. Department of Homeland Security, U.S. Department of Agriculture, National Oceanic and Atmospheric Administration, Air Force and U.S. Department of Energy. SBIR managers also offered insights on how to navigate the grant application.
Melton said a pre-conference helped foster new ideas by focusing on advanced manufacturing, which helps businesses commercialize their products faster and cheaper. Speakers from global companies such as Boeing, Samsung, Panasonic and Stratasys discussed 3-D printing, advanced materials and next-generation robotics.
“My presence here is to give a presentation of additive manufacturing (3-D printing) to help businesses change their paradigm,” said Bruce Barton, education account executive for Stratasys. “Hawaii is literally an island into itself. Rather than shipping in goods and things, maybe more could be created here using additive manufacturing.”
Ed Knobbe, chief executive officer and president at Spectrum Photonics Inc., said HTDC’s advocacy through events like the conference as well as its administration of federal and state grants help foster an environment where early state companies can thrive.
“We’ve received about $7 million to date,” Knobbe said. “The money was critical to helping us get off the ground and hiring people and developing proof of concept. We have 14 employees, including seven University of Hawaii graduates, working in high-tech jobs. Without the grant money we’d have one volunteer employee.”
Knobbe anticipates that the state’s new Phase II cost-sharing programs could help bring his company to the next level. The company, whose primary sponsor is the U.S. Department of Defense, aims to make systems that allow cameras to collect infrared signatures. In Hawaii, Knobbe said his product has practical applications in fields like security, first responders and precision farming.
“We are hopeful that we will have a product ready to go into low-rate production in the next two years,” he said.
