An economist who has advised two presidents on tax and economic policy says Hawai'i needs to figure out a way to attract more of the billions of dollars of investment flying around the globe while taking better advantage of its resources.

John Rutledge, who advised President Reagan on a plan that brought the country out of a recession and more recently was an adviser to the Bush White House on tax policy, said there is no silver bullet for the Hawai'i economy's current dilemma.

But Rutledge, who owns a house on Maui and spends time here, said the state has a number of things going for it including great natural resources, a good university and a location that positions it between the growing economies in China and Asia and those of the Americas. Meanwhile, investment dollars are flying over the state on their way to Asian and other economies.

"You need to find a way to get it to stop over," said Rutledge, who spoke at an economic conference presented by Small Business Hawaii. Rutledge is chairman of Rutledge Capital, a private equity investment firm, an adviser to a couple of hedge funds and spends time in China, where he lectures at universities and advises the governor of Beijing's Haidian district.

He said one possibility is figuring out more ways to take advantage of fiber-optic communications networks that pass through Hawai'i. These make it possible to do work here that previously needed to be done elsewhere.

He said Hawai'i might explore how Hainan province, an island off the southwest coast of China that has a sister-city relationship with Honolulu, has been able to exploit a "green" industry reputation in producing organic fish and medicine from sea creatures.

"They're growing like crazy," said Rutledge, who noted Hainan also could learn much from Hawai'i in an exchange of information.

Other speakers talked about the need for the state to cut taxes and make it easier for small businesses to operate if they want to encourage growth. Lowell Kalapa, head of the Tax Foundation of Hawaii, said there are a number of fees that indirectly tax residents, and that a special 0.5 percent tax to fund an O'ahu mass transit system threatens to stall the economy as its costs ripple through the state.

"When we say we are open for business we need to mean it," said Sam Slom, Small Business Hawai'i executive director and a Hawai'i state senator.

Rutledge's talk covered many international economic issues, including the need for more cooperation between countries on how to solve energy problems.