Our diversified and globally competitive economy enables us to meaningfully live, work and play in Hawai‘i

A sustainable Hawai‘i cannot occur without a sustainable economy.

For the past three decades, tourism, defense, construction and agriculture have been the foundation of our economy, and will likely be major economic drivers in the years to come. Tourism alone generates an estimated twenty percent of all economic activity and a quarter of the state’s tax revenue. Most Hawai‘i residents support keeping the level of tourism and military activity the same. But that shouldn’t preclude progress towards creating a more diverse and sustainable economy.

For example, the tourism industry has tremendous potential to make progress by reducing its consumption of land, water, energy and other natural resources, as well as leading in the area of protecting our natural areas. Protecting the environment and operating on a sustainable basis makes perfect sense for Hawai‘i’s tourism industry – after all, the product that they’re selling is Hawai‘i’s natural and cultural beauty.

The need for economic diversification

The real challenge is not how to continue or improve upon the status quo, but to diversify. Economic diversification is critical for several reasons. Wages in emerging industries such as high technology and knowledge-based industries are high, with an average starting wage of around fifty thousand dollars. Diversification makes our economy more resilient in the face of an unpredictable future. With Hawai‘i’s Congressional Delegation procuring the lion’s share of defense appropriations, a tourism industry that depends on overseas economies and low-cost jet fuel, and a construction industry that depends on available land and low interest rates, it is in our interest to hedge against these uncertainties.

Diversified agriculture, fisheries and aquaculture, and knowledge- and innovation-based industries such as high tech, heath care, biotechnology, film and digital media are important components of building a sustainable economy. While the private sector and the government have made great strides and investments in these areas, it’s vital to sustain and increase these efforts if we are to fundamentally transform our economic equation.

We need a well-trained workforce

A strong economy also requires a strong workforce. The availability and quality of our workforce needs to be improved. With a current unemployment rate of about 2.5%, we suffer from a worker shortage. Our high school dropout rate is between 15% and 36%, depending on how and who is reporting the data, reflecting an inability to train skilled workers. At the heart of this matter is the need to strengthen Hawai‘i’s public education system so that it adequately prepares our young people for the global economy.

Functioning infrastructure is critical to economic health

Many of our roads, harbors, water and sewer systems are overwhelmed by massive increases in population. We must plan ahead for the financing of infrastructure so that transportation and other vital economic systems are prepared to manage and accommodate planned growth. While this topic is about the public expenditure of funds, it’s a high priority for business, because without basic infrastructure, the economy will be inefficient. From the $341 million education repair and maintenance backlog to the $1.74 billion worth of sewer system improvements necessary to fix O‘ahu’s system, we need consistently significant investments to maintain public services.

In addition to simply planning for inevitable growth, we must be more aggressive in directing growth towards areas that efficiently use infrastructure dollars. Adopting smart growth policies to guide our decision-making will maximize the efficient use of infrastructure dollars.

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