HISciTech Releases First Comprehensive Data Report on Growth of Sci-Tech Industries in Hawaii

INNOVATION AND TECHNOLOGY IN HAWAII:
An Economic and Workforce Profile

Honolulu, HI (October 1, 2008) – The Hawaii Science & Technology Council (HISciTech) today released a comprehensive data report on the growth of science and technology industries in Hawaii. HISciTech engaged the Council for Community & Economic Research, (C2ER) a nationally renowned economic research consulting firm, to conduct the study. The 67-page report shows the increasingly important role that Hawaii’s sci-tech industries have played in the state’s economic growth over the past five years and provides projections and recommendations for future growth. The report includes an overview of the sectors, an explanation of the markets driving Hawaii’s tech sectors, island-specific strengths and opportunities, labor market trends, and implications for policy. (The complete report, entitled “Innovation and Technology in Hawaii: An Economic and Workforce Profile,” accompanies this news release and is available in downloadable form on the HISciTech website at www.hiscitech.org.)  

“The key findings in this comprehensive study are impressive and of timely importance,” said Kenneth E. Poole, PhD, executive director, C2ER. “They clearly indicate that the tech sector in Hawaii has experienced significant growth between 2002 and 2007, and that it is poised for significant growth in the future. The findings are consistent with my experience in other communities where there has been a focused effort to invest in the future and diversify the economic base. The future looks bright for the science and technology sector in Hawaii if the public and private sectors can collaborate to develop and implement a strategic tech plan that builds on the successes achieved so far.  

Project collaborators include key staff at the Department of Business & Economic Development & Tourism, the University of Hawaii, the Research Corporation of the University of Hawaii, and the Economic Development Boards on Oahu and the neighbor islands. The project team relied on long-standing national and state databases, with significant qualitative input from numerous industry representatives.  The definition of technology was adopted from the Bureau of Labor Statistics (BLS), with conservative modifications to improve its relevance for Hawaii.  The study integrates data across Hawaii’s 10 science and technology market segments and follows the announcement of preliminary data released on August 19, 2008. Some of the key findings contained in the report include:   

• Employment projections suggest that Hawaii’s tech sector is likely to grow nearly 46% faster than the rest of Hawaii’s economy over the next decade—1.9% for the tech sector vs. 1.3% for the rest of the economy.
• The 3.3 % annual growth rate of Hawaii’s private technology companies between 2002 and 2007 outpaced both the state’s overall 2.5% economic growth and Mainland technology sector growth of 1.8% for the same period.
• 4,158 net new jobs were created between 2002 and 2007 within Hawaii’s public and private technology sectors.
• The science and technology establishments contributed $3 billion to the Hawaii economy in 2007, 5% of the state’s GDP.
• Neighbor Island highlights: 17% of the state’s total tech employment is located on the Neighbor Islands. Among the neighbor islands, Maui has the most private sector tech-related jobs. Kauai has the smallest, but fastest growing tech sector, adding jobs at a 6% annual rate. The Big Island has a globally competitive astronomy sector and an array of opportunities in potential renewable energy resources.
• Select Commercial Market Segment Facts:
  • Renewable energy--the fastest growing tech market segment in Hawaii--increased jobs at an 8.4% annual rate in the private sector, compared with a 5.8% increase nationally.
  • Defense & information/communications technologies comprise more than 50% of tech employment.
  • Hawaii-based companies attracted more than $2 billion in defense contracts in 2007.
  • Astronomy is the smallest sector, in terms of employment, but may be the most unique competitive advantage.  
• Annual Earnings for Hawaii Tech Workers:
  • Private sector tech workers earn an average of 38% more than other workers in Hawaii. The difference in earnings represents approximately $1,500 more per month in added wages and benefits. But they earn an average of 72% of their mainland counterparts.
  • Public sector tech workers earn more—50% higher than the statewide average—largely due to benefits and Federal COLAs.   The report lists key factors for the success of sci-tech in the state:
• A vision and plan for promoting private and public investment in technology
• Information on factors that influence tech-based economic development-related growth
• A deeper, more diverse technology base to take advantage of emerging opportunities
• Networking across industry sectors
• Available risk capital for all stages of research and commercialization
• Available globally competitive talent pool with science, technology, engineering and math skills
• An appreciation for the need to balance the role of technology and the state’s unique culture

  Key recommendations include:

• Develop and implement a strategic tech plan through collaborative consensus building.
• Diversify the state’s private tech base through dual use and non-defense dependent commercialization activities.
• Design a comprehensive tech workforce retention strategy for Hawaii.
• Assess how well the state’s entire business incentive portfolio has fostered private sector investment in tech and innovation.

"This data, in particular the dramatic 8.4% employment growth of the energy sector, demonstrates that our past efforts on the federal level have helped to grow Hawaii’s high technology sector by capitalizing on our state’s strategic location in the Pacific,” said Congressman Neil Abercrombie, chairman of the U.S. House Armed Services Subcommittee on Air and Land Forces which has jurisdiction over the Army and Air Force. “Working together with the Hawaii Science & Technology Council and the state's high-technology industry as a whole, we will continue to keep at the forefront research and development that addresses our national security and energy interests.  

“This landmark study of the state’s innovation and technology industry is good news for Hawaii’s future,” said Reb Bellinger, vice president, Makai Ocean Engineering. The diverse ocean engineering firm, established in 1973, specializes in three distinct high technology areas: ocean energy, submarine cable management systems, and software development in 3D/4D visualiza­tion. “Makai's continued growth is an excellent example of the importance of sci-tech sectors to our state’s economy and how Hawaii's expanding high tech industry continues to offer challeng­ing opportunities in our state. Hawaii needs to ensure that it supports and provides incentives for the growth of new, emerging and mature tech companies that not only address critical issues, such as energy sustainability, but also creates new, exciting and challenging oppor­tunities for our current workforce and our future work force which will be from our children.”  

“Hawaii is home to a growing number of world-class R&D and innovation companies,” said Keiki-Pua Dancil, PhD, MBA, executive vice president of Business Operations, Hawaii Chitopure. The biomaterials company, founded in 2004, manufactures chitosan (a substance derived from crustacean shells) for a variety of medical applications. “This report clearly shows that the state’s science and technology sectors are leading the way in providing stimulating, rewarding careers for Hawaii residents, including those of us who have chosen to return home. The industry holds much promise for the future of our state, and ensuring its continued growth is of paramount importance.

Lisa Gibson, president of HISciTech, said, “History points to the importance of diversifying our economy. In 1990, the state experienced a tourism downturn after the first Gulf War and another downturn in 2001 after the September 11th attacks. Now it’s 2008, and Hawaii is once again experiencing another tourism-related economic downturn. Never before has it been so important to ensure that we continue to develop our sci-tech industries. Developing these high-wage sectors, which are counter cyclical to our legacy sectors, is the only systemic way to ensure economic prosperity and stability for our state now and in the future. Sci-tech’s positive growth didn’t occur in a vacuum, but is the result of years of effort from committed, visionary leadership—both public and private—to whom the entire state is indebted.”  

HISciTech is the only statewide, private-sector industry organization representing Hawaii’s 10 integrated science and technology market segments: Agricultural Biotechnology, Ocean Sciences, Astronomy, Defense/Aerospace, Information and Communication Technologies, Life Sciences, Film and Digital Media, Energy, Engineering/Professional Services and Environment. With a membership of 125 companies, research entities and service providers, HISciTech is committed to accelerating the growth and success of the state’s innovation industries and the development of a globally competitive, innovation-based economy. For more information, visit www.hiscitech.org