One of the responsibilities of land grant universities is to promote the regional economic development of the state and to benefit the stakeholders whose taxes support the university system.
My interest has been the development of strategies to revitalize Hawaii's nursery industry by increasing its international competitiveness.
The challenge involves maturing markets in its core products, local and international competition, a national and global recession, price-based competition leading to a shrinking of the industry, high input and production costs, shortages of labor, water, and affordable agricultural land.
The following areas are components of a general approach aimed at market product innovation, developing new markets, and increasing the competitiveness of Hawaii's nursery products.
Hawaii's agricultural exports are limited to high-value high-quality products that can profitably support increasing shipping costs. Many of Hawaii's unique ornamental plants fall into this category since they have appeal in international markets.
The ornamental business today is global, electronic, interdependent, and in constant state of change, requiring vision, strategic decision making, financial planning, and proper marketing to carve a niche in the global markets.
Business management education has been provided through direct presentations to nursery associations, business coaching, publications, and a web page - Business Management Toolbox.
Advances in micropropagation techniques and tecnology require optimization of known protocols and processes to develop cost-effective micropropagation protocols for ornamental plants.
Micropropagation is a useful tool allowing growers to amplify profits by scaling up their production. However, commercial micropropagation is more difficult than it seems at first glance. Protocol development requires specific know-how and time. In addition, initial high investment costs during the first 3 to 5 years have been a key problem to the survival of commercial plant tissue culture labs. Hawaii faces high costs of electricity and other inputs as well as shortage of qualified technicians.
To be globally competitive, new technology such as cost-effective temporary immersion bioreactor systems are necessary to reduce costs of production in commercial tissue culture production.
Initial research on micropropagation of Dracaena J. Craig ‘Liza’ has shown positive preliminary results. In comparing growth and multiplication rates a bioreactor system has resulted in labor reductions and increased multiplication rates over a conventional method on solid medium.
Research continues to improve synchronization of multiplying cultures to further reduce labor cost and speed up multiplication rates. A publication of these results is in progress.
Traditionally, innovation has been the main driver of the ornamental business worldwide. New plants set the pace in the foliage and cut flower markets, creating profits to the growers that supply the largest numbers of such new plants.
Two areas that would improve Hawaii's floriculture and nursery exports are increased access to global markets and improvements in the production capability of high-value new plants.
The New Plant Distribution Center (NPDC) is an initiative to revitalize Hawaii’s nursery industry by developing technology that reduces production costs and to expand markets of Hawaii's high-value ornamentals.
NPDC aims to increase the availability and accessibility of starting materials, to create a constant flow of high-value new varieties, and to refocus competition towards the global markets by promoting and branding Hawaii’s high-value new ornamentals.
The program is similar in function and structure to existing university-based new crop introduction programs that have developed productive collaborations with their regional nursery and floriculture industries.
The first cuttings of Dracaena ‘Ruth Luka’ were released in July 2010 to members of HENA for market evaluation. Four more Dracaena varieties are in the process of cloning via cuttings, in addition to tissue culture cloning of 5 Dracaena varieties.
The grower associations have expressed strong support for the work of the NPDC.
During the Summer of 2010 two surveys of the nursery industry helped assess its status. With the assistance of 4 extension agents covering the Big Island, Maui, Kauai, and Oahu I personally interviewed 33 growers.
Growers have expressed interest in the results of both surveys and seminars have been provided at the HENA conference and to nursery grower associations in Oahu (ONGA, DOGAH, and LICH).
One survey focused on updating the current research needs of the industry which in turn help guide and prioritize CTAHR research focus areas. Their main research concerns include,
- Insect control, 58%
- Disease control, 48%
- Lack of new plants, 45%
- Marketing and promotion, 45%
- Nursery management skills, 26%
These results have prompted interest among CTAHR faculty, and one initiative has been the creation of an Ornamental Business and Research Working Group which will be focusing on addressing these top 5 priority nursery industry needs.
A separate survey assessed the grower's profitability perceptions based on a model of competitive forces, a profitability model by Michael Porter. The combined strength of five competitive forces form a general perception of industry profitability.
The survey, based on 33 growers, showed a significant gap to profitability in the industry with a few nurseries making a profit while others were not doing well.
Preliminary results show the perceptions of growers in the following categories (optimal level is 100%):
- Freedom from the threat of rivals, 53%
- Freedom from threat of newcomers, 62%
- Freedom from supplier’s power, 50%
- Freedom from customer’s power, 51%
- Freedom from threat of substitutes, 57%
Promoting Hawaii’s Nursery Industry
In almost three years, three trips to China have totaled about 40 days in site visits to over 30 Chinese growers, research institutions, nursery companies, and educational centers.
Time has been spent on building bridges of communication and understanding to build confidence and trust between Chinese and Hawaii growers.
Significant interest has been raised for proteas, bromeliads, orchids, pitcher plants, and others.
In November 2009, I brought a group of extension agents, specialists, graduate students, and a technician to Guanzhao and Kunming in China as a first step towards international marketing and sales of Hawaii’s new plants.
The 18-day trip included visits to 16 growers in addition to an international plant show. The trip confirmed my strategic approach of NPDC to be globally competitive, to emphasize the need to create one-of-a-kind new ornamental plants, to mass produce them and to gain market share for Hawaii by releasing first into the global markets.
A year later, in October 2010, I went back to China as a member of the China Trade Mission of the Hawaii Department of Agriculture. The Mission's objective was to spur technology education and tourism exchange between Hawaii and China and to open export opportunities for Hawaiian products, including potted plants, cut flowers, and fresh fruits.
In the process I tested 10 new plants provided by Hawaii growers and CTAHR faculty, and the general response of 8 visited nursery growers was positive.
The successful reception of at least 2 new plants has increased the urgency of a tissue culture facility to mass produce them.