Hawaii: Best to Live, Bad for Businesses

Hawaii is the best place to live in the US, states a report from CNBC.

The criteria of this rank are i) crime rates ii) health care iii) air & water quality iv) number of visits to local attractions.

Located in the middle of the Pacific, the Aloha state enjoys great environmental advantages and proximity to rich markets to be ranked top in the rank.

However, Hawaiian residents rank very poorly in terms of human, business, and infrastructure capital. The local work-force, educational system, regulatory framework, and public transportation are among the worst in the country.

This outcome is partially explained by the lack of a competitive business environment on the islands.

http://www.staradvertiser.com/business/businessnews/20110629_high_quality_of_life_cannot_buoy_isles_in_business_rankings.html

"Confirmation Bias"

People tend to seek confirmation of their beliefs.

“Confirmation bias” is the psychological term defining this human behavior that is constantly looking for and interpreting given information based on existing beliefs, expectations, and hypotheses.

Internet search systems and social networks unveil this human feature.

http://psycnet.apa.org/?fa=main.doiLanding&doi=10.1037/1089-2680.2.2.175

New Zealand: Leader in Sustainability

New Zealand has become the worldwide leader in sustainability. This has happened because of the national focus on values and principles and the leadership of civil society. Economic growth based on increasing wealth is no longer a benchmark for measuring development and state institutions are not expected to take long-term responsibility over environmental issues.

The six measures that New Zealanders have enforced are:

i) limit emissions into the atmosphere, discharges into waterways and the ocean, and chemicals in the soils;

ii) grow natural and social capital to sustain health and resilience of its people, institutions, and the nature;

iii) substitute renewable for nonrenewable resources wherever feasible, and luse these as efficiently as possible;

iv) instill a broad and deep eco-literate & strong human-Earth relationship;

v) embed sustainability in governance, economic, legal, and educational systems, and

vi) import only from countries and regions that follow sustainable practices.

http://www.thesolutionsjournal.com/node/946

Youth Initiative in Green Certification

“Leaving Earth a Future (LEAF)” is a youth-driven nonprofit organization whose purpose is to encourage and promote sustainable practices within businesses and non-profit communities, starting with the restaurant sector. These students do so by creating a certification process.

http://leavingearthafuture.org/index.php

System Thinking

Edmonton’s public school system became a worldwide role model by asking decision-makers, school directors, and union leaders the right questions; thus, helping them visualize priorities, embrace change, serve better, and improve performance.

http://www.hawaiibusiness.com/Hawaii-Business/May-2010/Best-School-System-in-North-America/

Public Policies positively affecting Businesses

More business opportunities created by a policy shift.

Hawaii’s Public Utilities Commission (PUC) created “net metering” to allow clean energy producers to offset their overall energy demand by feeding the excess energy they produce into the grid for credit at the current retail rate towards their monthly utility bill, but never for a profit or cash in hand. Now, thanks to the policy shift, independent renewable energy producers have the chance to sell clean energy to Hawaiian Electric through a “feed-in tariff”.

As “net metering” will continue benefiting smaller energy producers (less than 50KW) because rates continue to increase over time, “feed-in tariff” opens the door in Hawaii for energy investors: business with a low energy demand and a lot of roof space or property owners with open land, like ranchers or farmers.

http://www.greenmagazinehawaii.com/feed_in_tariff_v3-1.html

Solar Energy Business Model

This is a new energy business model.

Sunetric and Revolusun offer homeowners on Oahu, Maui, and the Big Island zero down payment for a solar system. SunRun, their partner, pay for the photovoltaic system and Revolusun and Sunetric install it.

The benefit for the resident, in addition to the zero down payment, is buying solar-generated electricity from SunRun at a locked-in-rate and no costs on maintenance.
SunRun makes a profit by getting the tax incentives and selling electricity to household in the long-term.

http://www.hawaiibusiness.com/Hawaii-Business/May-2011/Zero-Down-for-Solar-Power/

"Green Hawaii"

Another summary for “Green Hawaii” from Ira Rohter.

http://www.greenmagazinehawaii.com/a_green_hawaii_v2-2.html

Milestones of State Employees towards Energy Efficiency

This is the webpage that shows what state employees have been doing in Hawaii towards energy efficiency.

http://hawaii.gov/dbedt/info/energy/efficiency/state/lbe/stateemployees

Green Certification of Products & Services

“Energy Star” is a joint program of the US Environmental Protection Agency and the US Department of Energy helping people save money and protect the environment through energy efficient products and practices. ES do so by qualifying and certifying products and services.

In 2010 Energy Star helped saved greenhouse gases equivalent to those from 33 million cars and nearly $18 billion on utility bills.

http://www.energystar.gov/index.cfm?c=about.ab_index

Energy Efficiency Achievements at State Agencies in Hawaii

“The Lead By Example”(LBE) initiative began in 2006 in response to legislative and executive mandates to make government buildings, fleets, and personnel practices leaders in energy efficiency and conservation. Find below the achievements for the fiscal year 2010.

http://hawaii.gov/dbedt/info/energy/efficiency/state/lbe/FY10%20Lead%20By%20Example%20Report%20to%20the%20Legislature%20FINAL%2001.12.11.pdf

Green Incubation

“Social and Environmental Entrepreneurs (SEE)” incubates projects that are charitable in nature.

http://saveourplanet.org/index.html

Green Award to Community Organizations on Leeward Coast

The government of Hawaii has awarded $600,000 in Supplemental Environmental Project (SEP) grants to eleven community organizations to undertake various environmental projects on Oahu’s Leeward Coast.

http://hawaii.gov/ltgov/newsroom/press-releases/600-000-awarded-to-community-groups-for-environmental-projects-on-leeward-coast

Green Public Procurement

“Responsible Purchasing Network” is an NGO that taps into a large network of public institutions to help them identify, utilize, and disseminate standards of practices that minimize – or eliminate – destructive impacts of institutional procurement of products and services throughout the US without compromising performance or cost-effectiveness.

http://www.responsiblepurchasing.org/about/mission_values.php

Global Green Certification

EPEAT is a global registry for greener electronics. Its database shows purchasers, manufacturers, resellers and others environmental products.

http://www.epeat.net/

Energy Saving Tips

Committed to a “green government”, the State of Hawaii lists these tips for energy and water savings while at home, at the office, or on the road.

http://hawaii.gov/dbedt/info/energy/efficiency/greengovernment/green-tips.pdf

Hawaii Green Government Challenge

The state of Hawaii created “Hawaii Green Government Challenge” to encourage government agencies to work towards smart energy and resource efficient operations while benefitting from lower operational and utility costs.

http://hawaii.gov/dbedt/info/energy/efficiency/greengovernment/Challenge

(Act 155 amended Hawaii Revised Statutes Section 11 to improve energy efficiency in public buildings)

http://hawaii.gov/dbedt/info/energy/efficiency/state/lbe/ACT155-2009.pdf

Energy Saving in Hawaii's State Agencies

Star Advertiser reports that Hawaii’s agencies have cut electric use by 2.8% and saved more than $20 millions in energy costs during fiscal year 2010. These savings at state buildings were achieved through equipment improvements and solar installations.

http://www.staradvertiser.com/business/20110604_state_agencies_boost_energy_efficiency.html

Behavior Change

Two videos explaining what drive us to change behavior.

A combination of:

1 - Warning
2 - Environment (eg. Visual Signs)
3 - Practice
4 - Peer Pressure

http://www.youtube.com/watch?v=o-N57TtyToE

A pool of:

1 - Motivation
2 - Ability
3 - Trigger

http://www.youtube.com/watch?v=NlEYLEV0_OA

10 ways to change behavior:

1 - Forget willpower!
2 - Take baby-steps
3 - Change context
4 - Create new behaviors
5 - Make behaviors easy to do
6 - Use triggers
7 - Remember: Humans are also irrational (Information does not always lead to action)
8 - Focus on concrete goals
9 - Limit change to a fixed period
10 - Behavior is easy if you use the right process

http://www.slideshare.net/captology/stanford-6401325

Competitive Advantage of Firms (Porter: Chapter 2)

Chapter two “The Competitive Advantage of Firms in Global Industries” from the book “The Competitive Advantage of Nations” from Michael Porter questions how firms create and sustain competitive advantage (CA).

Firms need global strategies to sustain CA. “Industry Structure” and “Positioning Within an Industry” are the two competitive strategies determining a firm’s CA.

Five elements affect industry structure: i) new entrants ii) substitute products & services iii) bargaining power of suppliers iv) bargaining power of buyers and v) rivalry among existing competitors. These elements also shape profitability because determine i) prices to charge ii) costs to bear and iii) investments required.

“Lower Cost” and “Differentiation” are the two central factors determining the position of a firm within an industry. Firms reduce costs when they design, produce, and market their products and services more efficiently than competitors. Differentiation is a result of product quality and special features of after-sale service.

Scope also influences a firm’s position within an industry. The range of products, the number of distributions channels, the definition of target audience, the limitation of geographic sale area, and the number of competitors are variables that end up affecting the CA of a firm. However, scope also allows firms to identify where operations overlap with competitors’ so that a cooperative approach can be negotiated.

Innovation is another important factor for sustaining CA. Constant improvements in technology and better methodologies and ways of doing things help a firm influence industry structure as well as position better within this industry.

The causes of innovation are i) emergence of technology ii) shifting buyer needs iii) emergence of an industry segment iv) shifting input costs or availability and v) changes in government regulations. In this context, firms that move earlier are in a better position to sustain CA for a longer period. This is the reason why firms should be constantly investing in market research as well as research & development since these are indicators that help firms anticipate changes and thus perceive and pursue innovation.

In summary, a firm creates and sustains CA by i) controlling sources of “positioning” ii) making cumulative investments and iii) enforcing constant improvements & upgrading in value chain.

In a global strategy context, firms must be aware of “Configuration” and “Coordination”. Configuration has to do with how many locations products & service are designed, produced and commercialized, and Coordination is about the challenge and costs of managing dispersed activities and identifying joint opportunities throughout the globe. Government is a powerful force dispersing activities. It does so through levying tariffs, nontariff barriers, and making nationalistic purchases.