24 Mart 2013 Pazar

Hawaii Economic Overview

Hawaii Economic Overview


Diamond Head and Waikiki Beach
Because of Hawaii's remote location, it is home to a variety of unique fish and vegetation and has thriving agriculture and aquaculture industriesHawaii serves as a multicultural crossroads between the West and the East, whose location and climate have strongly influenced the character of its economy. Because the climate is subtropical (with an annual average temperature of 77°F/25°C), it boasts a large tourism industry, which is its largest employer and represents almost one quarter of the state's gross state product (GSP). Hawaii has one of the highest costs of living in the country and is ranked 18th among states in per capita income.
In 1875, the U.S. government signed the Reciprocity Treaty with the Kingdom of Hawaii, which allowed the importation of duty-free sugar into the United States. It also encouraged the expansion of sugar plantations, which boosted immigration from China and Japan. Beginning in the 1880s, Hawaii was rapidly becoming a multicultural center. Not only would this immigration change the cultural nature of the kingdom, it would influence it economically as well. Taro had been a major crop in Hawaii, but as more Asians came, less farmland was dedicated to taro and more to rice fields. The large amount of water needed to grow rice, as well as sugar cane, spurred the beginning of several large-scale waterworks projects.
The sugar and pineapple industries were hit hard by the Great Depression of the 1930s, which brought Hawaii’s jobless rate to some 25 percent in 1936. World War II, which began for the U.S. with the Japanese attack on Hawaii’s Pearl Harbor on December 7, 1941, brought full economic recovery. The massive increase in American military personnel brought a substantial increase in demand for retail and consumer services, as well as a construction boom.
The demobilization following the war resulted in an economic slump, from which the economy slowly recovered due to the expansion of the tourist industry. Hawaii became the 50th state in 1959 at the outset of an economic boom that lasted from 1958 to 1973, during which per capita income grew at an annual rate of four percent. The introduction of jet airliners in 1959 spurred tourism further by cutting the cost and time of travel to the new state, continuing the industry’s growth through the 1990s.
During the first decade of the 21st century, tourism, federal defense spending, and private construction were the state’s three largest sources of revenue, with annual averages of $11.8 billion, $4.8 billion, and $3.5 billion, respectively.
Traditionally, agriculture and military spending were the mainstays of the economy of Hawaii. However, over the last few decades, the state has been moving toward a service and trade-based economy.
Hawaii is known as the "Silicon Valley of aquaculture." The annual value of Hawaiian aquaculture is about $25 million, and the industry grows at an annual rate of nearly 10 percent. The swordfish and big eye tuna catches represent the largest segment of this industry. More than 500,000 pounds (226,800 kg) of swordfish are caught each year with a value in excess of $1 million, second only to California. Aquaculture is the largest growing segment of the world’s food production industry, and because of its location, Hawaii is expected to benefit from this growth for the foreseeable future.

Dole Pineapple Visitor Center, Oahu
Almost 3,000 people work on farms in Hawaii. Although their overall value has decreased in recent decades, sugar cane and pineapples are still Hawaii’s most valuable crops. In 2005, these combined industries contributed $205.9 million to the state economy. The majority of Hawaii’s flowers are produced for export. Coffee, macadamia nuts, avocados, bananas, guavas, and papayas are also important crops for the state’s economy, as are vegetables such as taro, beans, corn, potatoes, and lettuce. These crops contribute another $100 million annually to Hawaii’s economy.
Beef cattle are raised in Hawaii, as are chickens and hogs. The sale of livestock in the state is valued at more than $350 million annually.
There are 1,450 financial services employers in the state with 19,500 employees. Hawaii ranks 40th in the country in terms of annual aggregated payroll, which was $910 million in 2006. Founded in 1858, First Hawaiian Bank is the state’s oldest and largest financial institution. Bank of Hawaii, the second oldest, is the largest locally owned bank, as the majority of its stockholders reside within the state. Large American accounting firms, such as KPMG and PricewaterhouseCoopers, have offices in the state to address the needs of some of the larger industries, such as the multimillion-dollar agriculture business.

Thriving Honolulu
Fox, ABC, CBS, NBC, and PBS all have network affiliates in Hawaii along with five independent TV stations dedicated to community and religious affairs. These companies have sales revenues of $65 million. Streamlining and shared services among some of the independent stations led to rounds of layoffs in 2009. The state also boasts over 80 radio stations and six local English-language newspapers. The average salary for people working in the communications industry in the state is $35,000.
There are 706 telecommunications and wireless communication companies in Hawaii, the majority of which are in Honolulu. More than one million people avail themselves of wireless technology in the state, and call centers are becoming a growing part of the Hawaiian economy. United Airlines operates a call center on the island of Oahu that employs several hundred people. ATT, Verizon, and United Airlines also operate call centers in Hawaii due to its location, which enables representatives to reach customers in both the Far East and the mainland U.S. on the same business day. Also, because many of the call centers’ 1,800 employees are multilingual, they can comfortably communicate with customers in a variety of languages.
Construction, as in many states, is a cyclical industry in Hawaii. The early years of the new millennium saw a significant rise in housing starts, with a 27 percent rise in the number of residential permits and a 41 percent increase in permits for alterations. There are approximately 24,000 construction employees working in more than 2,000 firms in the state, which build projects worth $1.1 billion. Most of the construction contracts are for federal government projects and tourist-related projects, such as hotels and convention centers.

University of Hawaii
Ten separate campuses comprise the University of Hawaii. Three (two on Oahu and one on the "Big Island" of Hawaii) are university campuses and the rest are community colleges. Over 50,000 students are enrolled in the system, and another 12,000 are enrolled in three private universities. At the turn of the 21st century, there were 285 public schools and 132 private schools available with nearly 13,000 teachers for grades K through 12. The state ranks 15th in the country with an average starting teacher’s salary of some $32,000. As of 2004, Hawaii ranked last in terms of state and local expenditures per student. 
The renewable energy industry is becoming increasingly important to Hawaii’s economy. It is the fastest growing technology-based market in the state and is growing at a rate of 8.4 percent annually, compared to an overall growth rate of 5.8 percent. The field is especially important in Hawaii because it is the most oil-dependent state in the country, relying on imported petroleum for 90 percent of its energy needs. Hawaii residents pay $0.30 per kilowatt hour (kWh) for electricity, which is the highest rate of any state in America. The American Recovery and Reinvestment Act of 2009 is expected to help Hawaii attract private investment in renewable energy projects in the state by offering generous tax incentives.

Golf is a Popular Sport in Hawaii
Hawaii has a small film industry with traditional and animation studios. The state also has a variety of performing arts and museums, but it is golf that is the strongest segment of the entertainment industry. With 83 golf courses throughout the state, golf represents a very popular form of entertainment for locals and tourists alike. This segment alone contributed $1.4 billion to the state economy in 2007. Golf and golf-related businesses (equipment retail outlets, for example) are responsible for more than 30,000 jobs. 
The insurance industry in Hawaii is small but growing, contributing $6.4 billion to the state economy annually. In 2007, Hawaii issued 10 licenses to new captive insurance companies (insurance companies that finance risk from their parent group), so there are now more than 200 captive insurance companies operating throughout the islands. Most of the new licenses were given to companies from Japan and the United States. Hawaii has the second largest captive insurance business in the United States and the fifth in the world.
In 2007, approximately 2,000 manufacturers, almost 1,800 of which were individual proprietorships, earned more than $94 million in revenues for the state. A little over 10 percent of these revenues come from food manufacturing, while the rest comes from a combination of animal food production, grain and oilseed milling, fruit and vegetable preserving, dairy production, animal slaughterhouses, seafood companies, and baked goods. By offering technology and science research grants at the state universities and by encouraging industry-related companies with attractive tax incentives, the state is working on diversifying into areas where there is more opportunity to earn higher annual salaries.
The mining industry in Hawaii is very small. There are only 14 mining companies employing some 600 people in the state, with combined annual sales of $2 million. Gold is the major metal mined in Hawaii, although silver mines still exist. A small amount of coal is also mined, although emphasis has been placed on cleaner forms of energy.
With Hawaii having to deal with a $1 billion budget deficit as a result of the worldwide economic crisis of 2008–2009, the state’s nearly 5,000 nonprofit organizations have had to cope with budget cuts totaling some $15 million. More than half of the state’s nonprofit social agencies cut their staffs by half during 2009, resulting in reduced or eliminated services.
As the nonprofit sector represents nearly eight percent of Hawaii's economy, their viability is seen as vital to the state’s economic recovery. The Hawaii Alliance of Nonprofit Organizations (HANO) serves as an information clearinghouse for the nonprofit sector. Its roots go back to 1901 and the Shipper’s Wharf Committee, which collected money to improve the plight of people working in the shipping industry. Today’s nonprofits try to care for the large number of people in the state living at or below the poverty line.

Downtown Lahaina on Maui
Hawaii’s retail sector employs more than 118,000 people, who have a combined annual payroll of $1.8 billion from an average weekly salary of about $300. The industry generates annual sales of $24 billion, and the $1 billion the sector pays in the form of an annual excise tax is the state’s largest. The sector is strongly influenced by the booms and busts in the tourist industry. This is especially true in the high-end market, which depends on wealthy Japanese tourists. Discount retailers such as Best Buy, Costco, and Home Depot, which cater to local tastes and pocketbooks, tend to fare better in the long term.
In an effort to diversify into markets that are less cyclical than tourism and agriculture, Hawaii has made efforts to expand its technological base. As of 2009, 31,000 people in the state were employed in the private and public technology sectors. Created in 1983, Hawaii’s High Technology Development Corporation is committed to providing a variety of programs to promote the state’s high-tech industry.
The science and technology sector contributed $3 billion to the economy in 2007, or 5 percent of the GSP of $61 billion. Employment in the technology sector is expected to grow 46 percent faster than the rest of the state’s economy in the coming decades because technology development companies do not require large initial investment in capital equipment or land.
Information Technology
There are 276 business technology companies employing 20,000 people in Hawaii. Some 15,000 of these workers are employed by Xerox and Time Warner. Others are employed by local companies such as Counterpoint Hawaii and Aloha Technical Solutions. The average annual salary of an information technology specialist is $65,000, which is lower than the national average of $82,000.
The University of Hawaii Medical School on the island of Oahu is involved in a series of biotechnology initiatives in an attempt to explore alternative energy sources.
A number of Hawaiian universities offer programs in software development. The Collaborative Software Development Laboratory, founded in 1991, is an institution that is totally dedicated to developing world-class software through research, in cooperation with the University of Hawaii.

On the right, Honolulu International Airport
Honolulu International Airport is the largest of the seven primary airports in Hawaii. More than 10 million passengers passed through the airport in 2007. Another eight million passengers transit the other six major airports. Eight other non-military airports handle some 70,000 passengers each year. In 2009, the state committed $36.9 million to improving the main terminal of Honolulu International.
Because Hawaii must import so many goods from the mainland (California in particular), its port system is a large component of the state economy, contributing some $2 billion to the GSP. Hawaii is trying to wean itself from its dependence on foreign oil. The Clean Low-Emissions Affordable New Transportation Equity Act (CLEAN-TEA) is designed to encourage the use of public transportation as a way to reduce dependence on individual automobiles. 

Haleakala National Park, Maui
Tourism is Hawaii’s largest employer, revenue producer, and growth sector. Approximately one third of Hawaii’s nearly 1.3 million residents work in a tourist-related industry. In 2007, the industry generated almost $12 billion in revenues, responsible for 24 percent of the GSP. Surfers generate more than $14 million during the winter months alone.
Hyatt, Marriott, and Hilton are just some of the large American-based hotel chains that have accommodations on one or more of the islands. Airlines provide daily transportation for the approximately seven million visitors the state receives each year. Hawaii Volcanoes National Park, Haleakala National Park, world-class surfing, and the Maui Ocean Center are just some of the top-rated tourist draws.

Prince Kuhio Federal Building, Honolulu
The federal government spends more than $10 billion annually in the state of Hawaii through grants to state and local government, federal procurement programs, transfer payments such as Social Security, and salary and wages. Although Hawaii’s location in the Pacific is seen as strategically important, federal military spending in the state has declined over the last several decades. There are approximately 40,000 military employees in the state. While $55 million was spent on Kauai’s Pacific Missile Range Facility and another $32 million spent on Maui’s High Performance Computing Center, no additional large military projects are expected.

-World Trade Press

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