 It is a noon hour on Thursday again folks, Ted Rawlson here in our downtown Hummeloo studio, welcoming Ray Sushiama on for the first time you've been on this show I think Ray, but you're not a stranger to think tech. No, I've been on this show twice. Oh, you have. Yes, that's right. If I was as a whole I'd remember that better. That's right. Anyway, thanks for coming on at this hour and I don't know what it is, it's a new hour. That's right. The time before was Fridays at four o'clock and now we've moved it to Thursday at noon. It's just the world of our, of our, of our resolutions out there, sets our clocks by this show. So it is noon hour on Thursday, you can set your clocks and adjust your calendars as appropriate. Anyway, I wanted to thank, first of all, thank Mike Elliott for coming on this show two weeks ago, hosting it. I was with Margie in a conference in San Diego on manned air systems, UAS, and then we had another one, a complimentary conference on the same subject up in Santa Fe last week. We've had a vacant slot last week in the show, back on live and should be hidden and hard for the rest of the Thursdays of the year, which was about two left. Anyway, what was, we talk about drones on the show a lot. There's nothing, there's no drone on the table, there's no one who drones on here on the table, but there's not a drone on the table because we're going to talk about the virtual aspects of drones. Things we can't necessarily see, it's how they fit in the economy and the growth of our economy here. That's why we have Ray Suchiyama online and we have Dr. Peter Quigley sitting online also by Skype. Often we use Skype to get to this show to Alaska or to East Coast or something like that. Today we're getting this show from Honolulu all the way to Manawak by Skype and by cell phone. So Peter, welcome aboard again. There you are. Great. Great to be here. And Peter's been on the show as well. Peter, of course, is the associate vice president for the community colleges in the university system. We have two guys here in the show who've been thinking a lot about the role of education and the future of our economy and how technology and STEM fit in that economy. And I just think that drones are a really interesting example of that. And people that we deal with shouldn't, our viewers, shouldn't think of drones forever going to be just like they are today. One guy and a controller and a drone to get out of a box and go fly it somewhere. There's, the whole world of drones is changing and changing rapidly. As command and control schemes change, the mathematics of complex systems comes into the picture and the value measured at the customer end begins to drive what's going to happen here. So we're seeing, we have a whole career and future here in drones and we could do a lot of that right here in Hawaii. So I was kind of reacting a couple of weeks ago to some information about enrollment and such and went back to the op-ed that I had written a paper that you wrote, Ray, about maybe six weeks ago. No, it's way back. Oh, I mean which one? This is one about the your experience at Google and bringing a technology theme into our economy here as a salvation for it. So I thought of that and I thought of what Dr. Figley's been doing in terms of looking at other areas like San Diego, for example, that have come up from a tourist or military base to a more high tech base and how that all occurred because fortunately we have to deal with that situation. So I wanted you to speak first on the themes that you had in your op-ed a couple of weeks ago and what ideas you have about how we might take that forward and think of drones as a carrier of that vector and then talk to Peter about what he's seen taking place in San Diego, how that worked and how that might be a model that we could try to get her here. Just a few weeks ago I did publish an op-ed of a star advertiser and it was on Lessons for Hawaii from Google for my experiences as a senior consultant at Google in Tokyo and Mountain View. And I talked about how Google is a meritocracy. It's based on research. It's focused on products, on design products and really of a global marketplace. And I touched upon all those things in my article. However, having said that, about two years ago in the fall of September of 2015 I published two op-eds in Civil Beat actually. And it focused on drones, UIS or drones, being a foundation for economic development in Alaska, in the state, and also in Oregon and several other states on the mainland and how the drone becomes a centerpiece for K-12 teaching of math and science and engineering for use in startups for manufacturing for all kinds of things dealing with agriculture. And so it becomes a kind of a focal point for whole new diversification of the economy. And Alaska was leading the way according to my op-eds of that period two years ago. And I had a whole strategy for Hawaii to go forth and do a similar thing using the drone and then using that as a topic of research at UH and community colleges and startups, Bishop Street, agriculture and so forth. So the Google article is one thing, but I did focus directly on drones as a centerpiece for economic diversification for the state. So interpreting all that, there's a strong value here in STEM itself. And drones as an instigator of STEM interest and value is measured at the agricultural, environmental or law enforcement level and quality of life ultimately at the end of the day in Hawaii. And to some extent, Peter, that's what you have observed taking place in San Diego in terms of the quality of life in San Diego having been approved by this transition from a tourist and a military-based economy to something that's much more diverse and has a lot of high tech and medicines and such like that in it. So how do we take what Ray observed and what you've observed and think about them in parallel that can be used to enhance operations and economy here in Hawaii? Yeah, thanks Ted. The San Diego example is, as you point out, very compelling for us because 30 years ago they looked around and saw they had real estate, they had a naval base and they had a tourist economy. And the fathers and mothers of that area were worried about how narrow that is. And we've got plenty of people on record in Hawaii talking about the narrow profile of our economic offerings. We're in those same three areas, primarily as well. And as Howard Dykes frequently points out and as economists frequently point out, it's terribly cyclical to be tied to something like the tourist economy because, first of all, it can be disrupted and changed so easily. And of course, in the tourism economy, which we love, of course, we love being a point of destination and that economy I'm not suggesting that we don't have that economy. I'm just suggesting by itself, it puts us on a pretty dangerous footing. 80 to 90% of the jobs in the tourism sector require no college degree. Half of those don't require a high school degree, which is a great sort of entry access for a lot of folks. But in terms of a place where we're living here, where the average cost of housing starts $500,000 on the low end. And if you're trying to pay for my salary in the state or the government salary and retirement based on $15 an hour jobs and tourism, you can see where you get perhaps an unfunded liability building up because you're not paying your bills. So San Diego took the bull by the horns and they had some long-term thought leaders in that area get together and they go, this place has simply got to be more. And that conversation had been going on in San Diego for a long time, like it has here, that we seem to be sitting on so much potential, like the drone opportunity, like cybersecurity. And what's keeping us from really exploiting that and making that go further? It becomes not so much the technical opportunity as it does become the culture. We simply have to figure out how to develop a culture of shared risk-taking, a culture of impatience about where we are now. And San Diego moved, as I mentioned to you before, in a span of 30 years from a $3 billion regional economy to $182 billion regional economy. And they added two sectors. They added biotech and they added telecommunications. So drones and the associated technology, and Ray already mentioned some of the agricultural applications, security applications, creative media. Right now, on the triple count of the North Shore, they're doing some of the most marvelous photography at Pipeline that you can possibly imagine. Shots of surfers at Pipeline nobody's ever seen before, flying alongside the surfer on top of the wave, behind the wave. And certainly with our creative arts media, you can see the applications here. So it's not simply the opportunity is sitting in front of us, like San Diego had these opportunities for a number of years, but until what I call the three stools of the engine of innovation come together, and that's the government, the university system, and the private sector on a collective agreement to take some shared risks and to put some benchmarks out and say, we're going to grow this place in some new ways. And the drone is a disruptive technology, as you know. And we need something to disrupt the status quo in our economy and bring some excitement. And as Ray was pointing out, this reaches right into the classroom, reaches young people, as well as professionals in real estate and other folks in the market. So it's got some real potential. But we need folks to see the urgency of our sort of current narrow economic profile and see this as an opportunity for us to develop and have startups and businesses, et cetera. One of the things that people might look at that we need regardless of whatever level of the economy we have here is the government costs a certain amount to run. We've got the roads, we've got the infrastructure, we've got our legislative system, we've got our city councils and all. There's a certain fixed cost that we need to bear regardless of whatever we do. The one factor alone is just the cost of government and the cost of government in the future being paid by a progressively less wealthy economic status is itself threatening, is it not? Well, I guess that's my point too. You know, just on paying the bills, you have to say, you know, there's a couple of ways you can look at your budget, you know, from a state level or a household level, you can either cut expenses or you can raise revenue or you can do both, right? If you imagine bringing on STEM sector opportunities like the one we're talking about with drones or cyber or some of the other areas that are being talked about today and you create new jobs there, you're creating new wealth and you're creating new tax revenues. We tend to go back to the same well and say, well, we're going to tax real estate or something of that nature and you can only take that so far. That's the going back to the same well over and over again. New wealth is created by bringing in new companies, new jobs, new sectors. They at least don't come out of thin air. Usually with San Diego, those sectors have been around for a while, slumbering and it takes this kind of courage of those three legs of a stool, I told you about, you know, San Diego went out and the mayor went out and did some recruiting of companies, did some land policy renewal, did some incentives. The university started bringing in the research dollars to sort of match the economic strategy of the mayor and then the private sector put together a group called San Diego Connect that helped understand the cluster behavior in the area so they could all sort of mark and assess how the growth was going. But the point was they all wanted, these were people that were not in it for themselves or for their own businesses, but they loved the region so much that in 20, 30, 40 years from when they started, they wanted San Diego to be this incredibly rich area both in culture and intellectual richness as well as economic richness and it's pretty easy to see that they've made that, they've accomplished that goal and you throw your hand out, San Diego, you're going to meet a smart person that's got a start-up going. That's just quite an incredible picture you've painted here, Peter, and kind of a model for us to think about. So in your experience with Google and such, Ray, how do you see the elements that we can do here in Hawaii which don't mean heavy duty production and manufacturing but has to do with intellectual development and such and software and small elements that can be easily transported and shipped and don't depend on a supply line of raw materials. How do you see the Google model following what, acting as a channel that would allow Peter's idea to go forward? Well, what Peter said is a vision for the future of Hawaii, but if you put names and companies to the San Diego growth history, we have universities like San Diego State, UC San Diego, Scripps Institute, those were really a key to research and entrepreneurship and so forth. So they have great centers of excellence in cybersecurity, for example, at San Diego State and Asia Pacific Studies at UC San Diego. And plus there were a migration of people, I used to work for MIT, and Irwin Jacobs and Andy Diverturbi were two founders of Qualcomm. And that was a major center and that brought in more startups in the mobile space, Cure Center came, Nokia came, and of course Biotech followed that later on. So there is a kind of a symbiotic relationship between university research, entrepreneurship and the city of San Diego that saw that military and tourism were not going to be growing that much in the future. They needed another growth area, which was high tech. And there was another part of this that we have to see, which is the Maki Lora, the duty-free tax-free zones on the Mexican border that added to Sonys and all kinds of Japanese companies coming. And in fact, there's a Japan Society of San Diego and Tijuana. There are Japanese companies that came in and made headquarters and people who went south to work on these plans and shipping duty-free TVs and phones and PCs into the US. So those are a lot of converging factors that really assisted San Diego to blossom the last few years. But again, what Peter pointed out very well is that there was a synergy among business and universities and of course, kind of a community leadership that really brought this to fruition. Okay, so there's a couple of different factors here and what you've added to the conversation. And one of them is that labor pool available. Obviously, raw materials and transportation and such to get materials in. Now let's take our first break here, our only break and come back and talk about how we might outline a path forward for Hawaii based on the experience you've got at Google and what Peter outlined that San Diego has done. We'll come back in one minute. Aloha kakau. I am Andrea. I am from Italy and I've been studying and working here in Hawaii for more than three years for my PhD. Hawaii is home to a truly fantastic community of middle and high school students. And did you know some of them are currently out there right now using their free time to invent new quantum computers? And did you know some of them are exploring cyber security and the new frontiers of robotics? I am just always amazed as I talk to them at science fairs. Oh, but there's more. Did you know that these students are coming here on Think Tech Hawaii to share their story with us? Come and join the new young talents making way show and discover how these students are shaping our future. Starting on February the 6th every Tuesday at 11 a.m. Only here at Think Tech Hawaii, mahalo. We are back, folks, in the second half of our show where the drone leads on Think Tech Hawaii. Thursday noon hour, which of course people run and set their clocks by that and recognize of course that daylight saving has gone away so think of standard time. Anyway, in the studio here we have Ray Suchiava. Thank you again. And we have Dr. Peter Quigley standing by well across the city of Honolulu in Manoa up in the valley. And we just had a really interesting discussion here in the first part of our show about the model that San Diego has laid before us, whether they like it or not. And of course the models that you experienced in terms of technology component and into a economic growth. And we're talking about how Hawaii might grasp or turn that into a picture useful for Hawaii. We don't have a source of inexpensive labor like San Diego does. We don't have the shipment aspect of easy transport of materials. We don't have any raw materials. So our raw material here is intellectual property and the fact that it's an attractive climate to come to work in. Our product would have to be something that isn't like a rocket. It isn't like a heavy airplane. It isn't like heavy machinery. It's something more in the software, in the intellectual domain. And so what we've outlined is that we've got to have the university involved in this future. We've got to have business involved in the future. But there has to be something that we can produce and sell. If we can't produce and sell it, regardless of how good we are, it doesn't become part of the economy. So what do you think, Peter, about what kind of outline we can create or picture we can put onto paper or something like that that deviates from what San Diego did because of the reasons that we can't copy them necessarily. But embraces what Ray's been talking about and a few folks we can get a hold of to take it forward. Well, you mentioned what we don't have. What we do have is a 10 campus university system with a flagship research institution in the center of it, which is usually one of the primary variables for an innovation economy anywhere you look in the United States. We do have a med school for context and a cancer research center. And we have an astronomy science in the state and other science and technology investments that are pretty formidable. So, and we do have a metropolitan district. We have a banking industry. We're a great point of destination. As I said before, tourism is a great sector to have. And you can certainly modify tourism by adding medical tourism and environmental tourism and all those things are in front of us too. But as you point out, it would help to have a plan. And we've started in coordination with the Chamber of Commerce series of sector convenings where we're meeting with the CEOs of the banking, healthcare, tourism industries. And we're gonna meet with energy and creative arts to talk about how do we enhance their sectors? What is it that we can do as a university system as well as a community of concerned folks to make those industries more powerful than they are today, more deep in their place here and the layered sophistication of those interests? So we have a process now that has started and some work groups that have occurred. So we've got the, I think the fragile beginnings of what you would call what San Diego Connect did, bringing everybody around the table to say, how do we benchmark our way forward from our current economic profile to something more complex and rich and deep in the next couple of decades? That's a real possibility. And it's, you've got a lot of folks at Hawaii Business Roundtable that have been working this issue, Rich Wacker has been a real help, the President of American Savings and a thought leader in helping us figure out how to, and Terry George at Castle. So you've got some of the real important variables. You got the people that count are in this conversation, we've got a nascent structure of a way to do business in Hawaii that could focus on how do we take drones and make this into a research slash startup slash business job creating industry. I'll tell you, I was on a panel of 10, 15 folks this summer in China talking about the future of the entrepreneurial university and to a country, Malaysia, China, Japan, India, they are going full bore in this area. They see the university system as a crucial part of their national security. They're going STEM, like you wouldn't believe it as a matter of fact, one university says we are not graduating job seekers, we're graduating job creators. And I thought, oh my goodness, they get it, they're on it, we need to make sure we're there too. Okay, and actually the drone issue could contribute to the consolidation of thinking you're speaking of. We are just, the state of Hawaii is through D-Bed is putting in a proposal to an FAA solicitation for a way that the local community, and including its governance, not the federal side, but the state, local, tribal, and community organizations could find a way that drones become most useful in their particular environment under 200 feet, under 400 feet as the first step in having the local organizations, the local governance, manage airspace in its own domain. And I'm not gonna quite get there in this pilot program, but the idea of bringing together the community, all elements of it, so that the whole solution is present, and it isn't just a technical solution or just a product solution, but there's a solution that includes STEM, includes education, includes the community participation and such. So we have a real need, Peter, we could toss in the middle of this activity you're speaking of, where all the members that you've got in that community of business leaders would probably have a really important opinion here. And we have to submit this proposal on the 4th of January. We've already submitted two of the six volumes that are in the proposal. So if there's some way we can get this story out in a condensed form to that round table, I'd like very much to do that and give a copy to both of you guys. But this is kind of like, this is actually a presidential directive. It's part of the drain to swamp thing. Get the federal government out of local business and local governance and have the local agencies figure out how to collaborate, work together, and drive the future in their own domain. So I think it's a modest, but an example of what would be the kind of collaboration that you're seeking. And coming out of that would be the engineering associated with drone usage, the software that comes up with the analysis of farm crop analysis and such. So there's a way we can tie these together, I think. Yeah, well, I mentioned Alaska early on. And they, in 2015, more than two years ago, they published a comprehensive report called Unmanned Aircraft Systems and Economic Development Strategy for Alaska. And that triggered, of course, you've been there, University of Alaska Fairbanks campus. They have a UAE Center there. They call it UCASI. That's right. Did you have a copy of that report? I can send it to you and to Peter. It's a very interesting document because they point out advantages about how big Alaska is. Of course, the focus on Native Alaskan children, K-12, STEM education, and of course, becoming a center for, as some Peter said, and we have to focus on it for business. How do you design drones? How do you make apps? How do you make them? You don't have to make them there. You can make them somewhere else in China. DJI is now a billion-dollar company. That's all they do, and everybody is gonna drone for Christmas. So it's a big, big, you know, and the thing is, when you look at robotics, and robotics is a great multi-disciplinary field, but there are no personal robotics companies. They don't make money. We have DJI, and many others that make money. Okay, and so the making money is the end state of this. That's what generates the growth in the economy, and that's what pays the bills for the government and such. So let me do that, Peter. Let me get you the synopsis of this proposal that is due on the 4th, and we'll figure out how to deposit it in the roundtable, get feedback, at least get them to be aware of it, and then we have between then and May to get all of our coordination in place and the themes struck out and such, and then we get notified in May of what we're gonna proceed or not. So let me go ahead and do that, and if you'll get the Alaska report, that'll be great, and then we'll all get together on this show again sometime. And anyway, for today, Ray, thanks for coming on to the show and bringing our usual incredible insight. I wish we could execute your insight really quickly. And Peter, the leadership you got in thought leadership here in terms of pushing forward and identifying barriers and identifying pathways that might work is really enlightening and very thoughtful and appreciate that very much. So thank you to guys for coming on and we'll see you all next Thursday.