A New Economy in Hawaii

1
A New Economy in Hawaii

• Hawaii Institute for Public Affairs

2
Key Points

• The modern economy works differently
• The new economy is about more than high-tech
  industry
• Hawaii is generally not doing well in the New
  Economy
• but, there are hopeful signs

3
The New Economy Rules

• Communication and production technologies
• Consumer preferences and behavior
• Worker expectations
• Globalization
• Pace of technological change

THE BOTTOM LINE
These changes a here no matter what we do.
Hawaii needs to think about its economic
strategy in a new way.
4
New Economy Characteristics

• High-tech products and services
• Technologically infused industries
• New kinds of work
• Innovative and entrepreneurial culture
• Global competence and connectivity

THE BOTTOM LINE
All of these characteristics require considerable
attention by policymakers
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Where Hawaii Stands High-tech products
and services

• Indicators
• High-tech jobs (?)
• Scientists and engineers (??)
• Utilization of Act 221 (too soon to tell)
• Upside Focused attention, Act 221
• Downside Fewer locally produced scientists and
  engineers, poor supports in the overall economy

THE BOTTOM LINE
Not doing great, but on the right track. Need
attention on the other four New Economy
characteristics
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Where Hawaii Stands Technologically
infused industries

• Indicators
• IT jobs in non-IT industries (?)
• Digital government (??)
• Commercial domain names (?)
• Online population (?)
• Broadband access (??)
• Upside Tech infrastructure renovation tax credit
• Downside Nonprofit sector and some govt.
  services undeveloped, limited govt. assistance or
  encouragement

THE BOTTOM LINE
Not doing well and not nearly enough attention on
the importance of this New Economy characteristic
7
Where Hawaii Stands New kinds of work

• Indicators
• Educational attainment of the workforce (??)
• Managerial, professional and technical jobs (?)
• Technology in schools (?)
• Upside Fairly high educational attainment
• Downside Inadequate data for monitoring
  progress, lack of new economy jobs, not enough
  technological proficiency

THE BOTTOM LINE
Old economy preparation for old economy jobs
8
Where Hawaii Stands Innovative and
entrepreneurial culture

• Indicators
• Successful startups (??)
• Patents (?)
• Industry investment in RD (?)
• Government/nonprofit investment in RD (?)
• Venture capital (?)
• Gazelle jobs (??)
• Upside Supply of entrepreneurs, recent tax
  incentives
• Downside Limited RD, lack of startup supports

THE BOTTOM LINE
Strong supply of innovators with inadequate
support structure of information, funding and
advocacy
9
Where Hawaii Stands Global competence
and connectivity

• Indicators
• Export focus of manufacturing (??)
• Foreign business travel (??)
• Diversification of manufacturing foreign export
  market (?)
• Diversification of visitor market (?)
• Upside Location and cultural assets
• Downside Inadequate data for monitoring
  progress, not yet tapping diversity in travel
  industry

THE BOTTOM LINE
Great assets, but not yet capitalizing. Travel
industry could be a new economy driver.
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Final Thoughts

• Focus on all five New Economy characteristics
• Need clear goals and articulation of a coherent
  New Economy strategy
• Gather good information on Hawaiis New Economy
  progress and make it widely available
• The New Economy requires good policy analysis and
  some policy entrepreneurship
• Policy should be well designed, given time to
  work, and then reviewed as good information
  becomes available
• Hawaiis institutions will need to change
  government, higher learning, education, unions,
  businesses, social services, quality of life
• Everyone should work together, but government is
  the key facilitator
• Challenge Economic development is key to
  achieving social goals, but the New Economy can
  also change the character of Hawaii