Entrepreneurship promotes economic diversity in face of setbacks

When the owners of Moloka’i Ranch shut down their operations, unable to win land use entitlements they were seeking, it was only the most obvious setback to the Friendly Isle’s economy over the past two years.

With tourism traffic impacted by the weakened national economy and the closing of Aloha Airlines and ATA, small businesses on Moloka’i that relied on the trickle of visitors to the island also shut down. At the same time, costs increased — for electricity because of rising fuel prices and for water and wastewater services provided by Moloka’i Ranch utilities.

But the Moloka’i community is displaying a resilience that defies any perception that the island’s residents are divided, uncooperative and uninterested in bolstering their economic future. A Maui Economic Development Board study, “Entrepreneurship and the Future of Moloka’i,” finds that the setbacks in efforts to establish a commercial tourism and real estate base have allowed the community to diversify its economic options.

While the diversified businesses are struggling with high costs and soft markets, there is a confidence that the community can collaborate on development that meets the community’s needs and respects the community’s concerns.

“Entrepreneurship and the Future of Moloka’i” was drafted by MEDB researcher John Harrisson with the assistance of the Moloka’i Chamber of Commerce and support from the County of Maui. It involved interviews with 83 Moloka’i business owners, managers and entrepreneurs to establish the level of economic activity on the island and to gather data on key issues of community attitudes and obstacles to economic development.

The report can be found at www.medb.org and through the Maui County Office of Economic Development.

“The data, opinions and insights gathered will provide a framework for building on the economic base in place on Moloka’i with businesses and opportunities that generate community consensus,” said Jeanne Unemori Skog, MEDB president and chief executive officer.

The study identifies major obstacles to business development on the island — high cost of electricity, shipping costs and untimeliness of barge arrivals, cost of fuel, limited air traffic and high ticket prices for visitors to the island.

But the entrepreneurship report also finds that the Moloka’i community sees opportunities in the obstacles.

Agriculture is still seen as a potential economic resource, but given the costs for shipping products to markets, the focus is on specialty products that fill niche markets rather than lower-value commercial crops like pineapple or potatoes.

Opportunities are seen in products such as organic papaya or native Hawaiian plants, or specialty processed products such as taro chips or dried fruits. The entrepreneurship study notes several successful farming operations, including biotech seed companies as well as Moloka’i Plumeria, a family-size farm that markets fresh flowers on the Mainland.

Obstacles to visitors seeking to go to Moloka’i also can be a plus, by fulfilling one of the key concerns for Moloka’i residents — that tourism satisfy the needs of the community as well as the interests of the visitor. The 100-visitor-a-day limit on visitor traffic to Kalaupapa is cited as an example of a desirable way to limit visitor impact.

Conversely, the community also saw a need for Maui County and State government agencies to be more responsive to their needs, with the survey of entrepreneurs finding “a strong consensus. . . that overall the County exerts a dampening effect on business activity.” The criticism focuses on permitting for new facilities.

“My administration recognizes there are legitimate concerns in the business community over delays in processing permits,” Mayor Charmaine Tavares said. “My directors have already made changes to streamline the process and have been directed to take further steps to implement needed changes and establish standards to make the administrative processes more efficient and effective for all of the county’s businesses.

“As the entrepreneurship survey found, there were steps taken to improve services on Moloka’i with a new staff person to handle permitting assigned to Moloka’i last year.”

Maui County Council Chairman Danny Mateo, who holds the Moloka’i Council seat, said the report points to deficiencies in government efforts to foster appropriate economic growth on Moloka’i while it provides direction on steps that need to be taken in areas such as better air transportation options and more responsive government services.

“This is an important starting point for Maui County and the State in responding to the Moloka’i community’s goals of economic development that meets the community’s needs and preferences, as opposed to the needs and interests of offshore investors who are not part of the Moloka’i community,” Mateo said.

“We appreciate Mayor Tavares’ comments that she understands the community’s concerns over county permit processing.  We expect the administration will support County Council efforts to authorize personnel and establish criteria for providing county services more efficiently.”

The study notes dissatisfaction with what survey respondents saw as inadequate educational offerings in the public schools and at the Moloka’i Education Center of Maui Community College.

Appeals for more educational programs and training in science, technology, engineering and math fields validate MEDB efforts to promote STEM education in schools on Molokai and throughout Maui County, Skog said. In just one area of STEM education, MEDB’s Women in Technology program and Ke Alahele Education Fund supported Molokai’s FIRST LEGO League teams that were recognized for their achievements at the Hawaii State Tournament held Dec. 19 on Oahu.

Comments from the Moloka’i business community also suggest government agencies are seen more often offering handouts rather than a hand up.

“An observation offered by some respondents during the survey process was that while some degree of government support was helpful, the history of government assistance on Molokai can act as a disincentive, and that receiving entitlements on an extended or ongoing basis can inhibit motivation to pursue entrepreneurial activities,” the study says.

“The Maui Economic Development Board, through the Focus Maui Nui program, initiated efforts to engage the Moloka’i community in planning its future,” Skog said. “MEDB will continue to work with Maui County and the State to support the community’s efforts to overcome challenges to entrepreneurship and develop new business opportunities that the community identifies as what it wants and needs.”