COMMENTARY
Global competition the new reality for Isles
By Bernice Parsons
Hawai'i, as with the rest of the nation, is feeling the heat from market forces clearly beyond its control. Energy prices, along with the cost of transportation and food, continue to climb; the visitor count is shrinking, and the blowup in the national mortgage market has caused liquidity to dry up. Many of us in the business community are starting to wonder when the next shoe will drop.
Obviously, the creeping cost of energy and the general uncertainty about the national economy will affect Hawai'i — especially tourism. Although the hospitality industry has served us well for many decades, as it becomes more expensive to travel, visitor numbers will surely wind down. The less dependent we are on this mature industry, the better off we are.
The good news is that Hawai'i's economy is moving forward and diversifying away from traditional, land-based enterprises. The Milken Institute's recently released 2008 State Technology and Science Index, which surveys states in terms of ability to leverage technology and science assets for economic growth, had good news for Hawai'i. According to the study, the Aloha State jumped 11 spots to No. 28 since the last report in 2004.
What accounts for the improvement?
There are a lot of factors, but I believe tax incentives — which are encouraging investments in biotech, IT startups and renewable energy companies — are yielding promising results and should be continued. We're also getting an influx of talented scientists and professionals to come here. Among them are kama'aina who have left for greener pastures on the Mainland or in Asia and are being lured back with employment in local startup companies such as Cardax Pharmaceuticals, Sopogy and Tissue Genesis.
These startups are only the tip of the iceberg. There are also a slew of associated businesses benefiting from the "multiplier effect" of investment in our new economy.
These range from individual proprietors to companies of 50 or more people who sell their services to local emerging companies as well as clients outside of Hawai'i. Here are some examples:
Despite the growth of Hawai'i's new economy and the trend toward globalization, the state needs to upgrade its human and physical infrastructure. Here's how we need to gear up:
Finally, we need to understand that Hawai'i is at a fork in the road. Tourism, while still important, has limited growth potential and few good-paying jobs.
It will be the new economy sector — IT, pharmaceuticals, nanotechnology, biotech, renewable energy and exported services — that will drive Hawai'i's future economy.
As former Hawai'i resident Bill Harris, now president and CEO of Science Foundation Arizona, said in a recent Advertiser Island Voices column, "The pineapple canneries, the endless cane fields, the Lurline and DC-8s are history. We need to stretch our imagination and pave the way for a new economy."
Hawai'i's new economy will, by necessity, have to compete in the global marketplace. We need to address this right now.
Bernice Parsons is a co-founder and the vice president of sales and marketing for MontPac Outsourcing, a Honolulu-based accounting and financial outsourcing company. She wrote this commentary for The Advertiser. Reach her at bparsons@montpacoutsourcing.com.
