How to Revitalize Hawaii’s Economy
Dozens of ideas to get the Islands back on track
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Nishizaki: Businesses need to go out there to the young people and build their aspirations. Over the last four years, we’ve hired four local chefs, Rodney Uyehara, Jon Matsubara, Ryan Loo and Colin Hazama. I encourage them to talk to the kids. People look at big baseball players, big football players, but these local chefs can create that same type of enthusiasm. Because not every kid’s going to go to college, but KCC (Kapiolani Community College) lets these kids get a degree to be chefs, to be very creative and in high demand.
Another concern is that the University of Hawaii keeps talking about getting rid of the Travel Industry Management School, or consolidating it. I have a hard time understanding why, when the state’s No. 1 industry is tourism, we are going to dilute a program that is developing future managers. We’ve got to support good local people who want to be its managers.
Belsby, left, and Okimoto say more collaboration between
Belsby: In my prior career, I did a lot of consulting work with the Chicago school district, San Francisco and Los Angeles school districts, and I found that the larger they got, the less efficient they became. They thought there would be cost savings, but the bureaucracy that was created offset any savings, and we’ve realized that issue in Hawaii. So it is very instructive that it takes a village to raise a child, not the state. And I think the more that we can migrate to that village model the better off we’ll be. If people in our community feel they own their local school, they are going to take a more active role.
Fukunaga: I’ve long advocated giving schools more independence. People talk about not having enough schools and a backlog of repairs and maintenance, but if parents were able to choose different schools for their children, maybe near their jobs, it would slow down the rate at which we have to build new schools. It would be much more efficient to let parents take their children to underutilized schools and that would encourage schools to compete and get better, because dollars follow the child.
Petranik: Kyle, what’s the role of unions in revitalizing the economy?
Management and unions need to develop stronger relationships
Chock: One thing we’re doing more now is leveraging our assets to partner with the business community. For instance, our pension-fund assets are funding projects at a time when local banks aren’t. If businesses win, we win, versus some unions who are still stuck in dealing with the employer as the enemy. We crossed over that a long time ago and tried to find that balance where you could still protect workers’ rights, still have an honest day’s wage for an honest day’s work, and still have employers and businesses come together.
If you try to resolve all of those issues outside of a collective-bargaining environment, you’re going to be more successful when you end up in the economic situation we’re in now, where union and management can solve problems with a phone call vs. a strike or this excessive posturing through the media between the administration and public-worker unions. When the downturn came, our union membership ratified a freeze on raises that had been negotiated and that employers by law were required to pay. You can do that when you put all that equity and trust in the middle of the table between labor and management, but the public-sector unions and the state and the counties have struggled to do that.
Petranik: Is there a way to further leverage the military presence in Hawaii?
Sullivan: The Department of Defense probably continues to be the biggest investor in technology in the world. Everything is evolving, including what the military needs, which creates big opportunities for local industry. The acquisition concept created post-World War II is changing: how to get things out faster because the bad guys can get it off the Internet and don’t have to go through a long procurement process. It’s a huge advantage for Hawaii – we have the biggest military in the world right down the street – for local industry to develop technology that can then be brought to nonmilitary applications.
To give an example of how state government has supported that, years ago, I remember looking at Small Business Innovative Research grants, SBIR. The state of Hawaii was 48 out of 50. But after the state started matching grants, the state’s rank moved from 48 or 49, to 23 to 24, a direct correlation. It occurred over five or six years. This little extra money allowed local companies to show up and compete for the next round of funding. Physically show up in D.C., tell them what they’re doing. That support was leveraged into a lot more, and there have been a lot of things the state’s done to support that and it continues to grow.
The fact that we’re not Rochester means that, when we think of optics, we don’t have to think about Kodak film. The lack of domain expertise leads to more disruptive innovation, which is a natural act for people in Hawaii, but it’s harder for other parts of the country. It occurs at the University of Hawaii and it occurs in a lot of these companies. The military needs disruption to beat the bad guys. They’re not going to do it by competing with the same things.
Petranik: Thank you for coming today. We had a very stimulating discussion.
How to Improve Hawaii’s Economy
A majority of Hawaii business leaders say that improving public education or promoting tourism would be the best way to revitalize the Islands’ economy. The BOSS survey of 403 top executives of small, medium and large businesses statewide, conducted in April, suggested six possible ways to improve the economy. Here’s how the executives rated those choices.
The No. 1 Solution
The executives were asked to pick the best single way to revitalize the economy. The executives of small firms were more likely to suggest reducing the size of government and lowering taxes, while the leaders of large companies were more likely to suggest bringing in new industries.
Tax Breaks and Incentives
The vast majority of business leaders surveyed, from companies of all sizes, said the government should use tax breaks and incentives to help diversify Hawaii’s economy.
*Percentages may not add to 100 because of rounding.
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