A Place for Pinstripes in Paradise

Hawaii hopes to change its image to include pinstripes along with grass skirts in an ambitious development program that aims to replace Hong Kong as the free-market hub of Pacific trade.

The 50th state is positioning itself to gain business when Hong Kong reverts to China’s political control in 1992, Roger Ulveling, head of the state’s Department of Business and Economic Development, said in an interview during a recent visit to New York.

Before that can happen, Hawaii faces the difficult task of showing potential investors a climate favoring business as much as tourists. The state’s tropical paradise image has the effect of concealing its strong business potential, he said.

“People generally think of Hawaii as a place to take vacations,” he said. “We’ve been successful in promoting our visitor industry--so successful it’s 30% of our economy. But we’re also doing a lot of other things.” The other things, he said, include a big package of tax cuts, job training, venture capital funding and other incentives to lure business.

Stepping Stones

Hawaii’s ports have long been stepping stones on East-West shipping routes, and 48% of its non-tourism work force is involved in trade services. But it hopes to become something more than a shipping service--a permanent base for companies doing business in the Pacific region.

To attain this goal, the state is starting a promotional campaign pointing to cultural and educational advantages that it believes measure up to the demands of multinational companies. Hawaii’s political stability also makes it a good place to base corporate operations, Ulveling said.

“As an alternative to Hong Kong, we see Hawaii as a very good place for corporations to locate their regional headquarters,” he said.

The Philippines, Singapore and others are also vying for the chance to gain business from Hong Kong. And China, which has expanded free-market enterprise within its current borders, has been anxious to calm fears that there will be radical changes in the economy of the British Crown colony after it reverts to Chinese control.

But Hawaii’s plan to become a Hong Kong alternative is just one of the state’s ideas for diversifying its economy so that it is less dependent on tourism.

The island state, more than 2,000 miles from San Francisco, sees high-technology industry as a vehicle to draw it closer to the mainstream of American business. As an example, Ulveling pointed to a successful telephone-answering service in Honolulu that was started to handle nighttime calls from New York City.

Increasingly, global, round-the-clock business--especially in financial fields--is also expected to create opportunities, since the business day in the Hawaiian time zone overlaps those of both Tokyo and New York.

But Ulveling said Hawaii’s development plans must proceed in a way that does not jeopardize the tourist industry, which accounted for $5.5 billion of the state’s $16.7 billion in economic output in 1986 and brought in 5.6 million visitors.

“We’re certainly not going to do anything to damage tourism--it’s very important to us,” Ulveling said. “We just feel the need for some diversification to create new jobs in other types of industries.”