Economic Prosperity

By 2030, increase economic opportunities and support an entrepreneurial ecosystem that strengthens Hawai‘i’s natural environment, culture and community.
Hawai‘i will need to maintain a robust economy to support healthy and thriving communities. Tourism remains Hawai‘i’s largest industry and export, and there is interest in making this sector more sustainable. In addition, Hawai‘i also has numerous small sectors – several of which are growing. There has been substantial growth during the last decade in industries classified under education, knowledge creation and research.

Self-Sufficiency Income Standard
Consistent with the Family Self Sufficiency Study (FESS) methodology, the Department of Business, Economic Development and Tourism (DBEDT) defines economic self‐sufficiency as the amount of money that individuals and families require to meet their basic needs without government and/or other subsidies.  It is assumed that adults are working full‐time (40‐hour a week), at one or more jobs. For example, the graph below illustrates in 2013, 21% of households with two working adults could not meet basic needs based on their income, compared to 42.6% of households with two working adults plus one preschooler and one schoolage child. In the following year, 2014, conditions improved slightly for households with two working adults in that 2.5% more households could afford to meet basic needs. However, in 2014, the number of households with two working adults plus one preschooler and one schoolage child that could not afford to meet basic needs rose to 45.5% in that year.
Through Act 12 (SLH 2008 First Special Session) Hawai‘i Revised Statues, 201‐3(b) was established that requires DBEDT, beginning in 2008, to establish and update biennially a self-sufficiency standard incorporating existing methods of calculation, and reflecting costs relating to housing, food, child care, transportation, health care, clothing and household expenses, taxes, children's ages, geography, and the number of household wage earners (DBEDT). The biennial report establishes Hawai‘i’s self‐sufficient family income standards and compares self-sufficient family budgets with poverty thresholds, minimum wage level, median family income, and estimates for actual incomes for the five family types. The Aloha+ Challenge tracks the percentage of families below the self-sufficiency standard for each family type as reported statewide by DBEDT.


Figure 1: This graph expresses the percentage of families in Hawai‘i below the “Self-Sufficiency Standard” as defined by Department of Business Economic Development and Tourism (DBEDT) to illustrate ability to afford basic needs for five different family types assuming household adults work a typical 40-hour work week. Note that data is not available for the “two adults + one preschooler + one schoolage” household type for the year 2011. (Source: DBEDT)
Diversity of Local Industries 
Regional economies can be characterized by the diversity and strength of their sectors, where the inter-linkages between sectors are known as “economic clusters.” Clusters within sectors that are traded are economically important because they tend to drive competitiveness and growth (Delgado, 2014). Tracking Hawai’i’s economic clusters provides an important tool for gauging our ability to diversify the local economy. The U.S. Cluster Mapping Project is led by Harvard Business School's Institute for Strategy and Competitiveness in partnership with the U.S. Department of Commerce and U.S. Economic Development Administration. The project provides a robust cluster mapping database grounded in the leading academic research.


Figure 2: Growth rate of Hawaii’s strong economic clusters. Source: U.S. Cluster Mapping (http://clustermapping.us), Institute for Strategy and Competitiveness, Harvard Business School. Copyright © 2014


Figure 3: This graph shows Hawai‘i’s comparative cluster strength from 1998-2016. By comparison, the state’s regional economic clusters have a relatively low overall strength and growth in strength over this time period. Source: U.S. Cluster Mapping, Institute for Strategy and Competitiveness, Harvard Business School. Copyright © 2014


Figure 4: This graph shows Hawai‘i’s comparative cluster strength from 2011-2016. By comparison, the state’s regional overall economic cluster strength over this five year time period is considerably better than the historical data expressed in Figure 3, highlighting improvement in recent years. Source: U.S. Cluster Mapping, Institute for Strategy and Competitiveness, Harvard Business School. Copyright © 2014

Figure 5: This graph highlights specific economic clusters for Hawai‘i on a scale of percentage change in employment over the period of 1998-2013. Size of cluster circles express number of employees in each sector, while density of color express strength of the cluster. Some clusters may be considered strong while maintaining relatively small employment numbers. (Source: University of Hawai‘i Economic Research Organization (UHERO))
Educational Attainment
Educational attainment serves as a metric of economic prosperity by expressing the preparedness for a skilled workforce. In Hawai‘i, 44.9% of adults aged 25-44 held a post-secondary degree in 2013. This represents an increase of 7.1 percentage points since 2000.


Figure 6: This graph shows the percentage of statewide individuals holding post-secondary degrees annually for the period of 2000-2016. The data serves as a metric for assessing overall rates of higher education attainment and trend lines over this time period in Hawai‘i and the United States. (Source: UHERO & National Science Foundation)
Genuine Progress Indicator
The Gross Domestic Product (GDP), developed in the 1940s, is the most commonly accepted economic metric world-wide. While GDP was not designed to measure anything but the size of the economy, regardless of inherent limitations, it is now seen as an indicator of progress. GDP measures the number of economic transactions of final goods and services within an economy within a set time frame. Yet it does not account for “good” things like volunteering or “bad” things like pollution. For example, while the Deepwater Horizon oil spill devastated the environment, domestic GDP actually increased, stimulated by the economic activity related to efforts for recovery and rebuilding in the Gulf (Costanza et al, 2014).
The Genuine Progress Indicator (GPI) is an alternative measure that goes “beyond” GDP by more holistically capturing things that are important to us  and could be a powerful tool for evaluating prosperity for Hawai‘i. Researchers posit that a localized GPI, rather than one based on scaled down national data, is more meaningful for Hawai‘i due to our unique island setting. Although GPI and GDP both begin with personal consumption expenditures, GPI then measures the value of important economic activities not captured in GDP, such as environmental goods and services, and social well-being. GPI accounts for not only unrecognized benefits but also incidental costs such as pollution externalities, ecosystem degradation and income inequality. Hawai‘i’s GPI was measured using 26 indicators modelled after the state of Maryland GPI, and although there were some matching trends, Hawai‘i’s GPI diverged from the gross state product (GSP) in particular years (Oleson and Ostergaard-Klem, 2014).




Figure 7: The wheel shows the 26 indicators evaluated to measure Genuine Progress Indicator
(Source: Genuine Progress in the States Initiative)
Learn More and Make a Difference
SDG 1 - No Poverty
End poverty in all its forms everywhere
SDG 3 - Good Health and Well-being
Ensure healthy lives and promote well-being for all at all ages
SDG 9 - Industry, Innovation and Infrastructure
Build resilient infrastructure, promote sustainable industrialization and foster innovation
SDG 10 - Reduced Inequalities
Reduce inequality within and among countries
SDG 11 - Sustainable Cities and Communities
Make cities inclusive, safe, resilient and sustainable
SDG 13 - Climate Action
Take urgent action to combat climate change and its impacts
SDG 16 - Peace, Justice and Strong Institutions
Promote just, peaceful and inclusive societies
SDG 17 - Partnerships for the Goals
Revitalize the global partnership for sustainable development