Talk of diversification gets to sound like a broken record because we never do anything about it. As if to excuse the inaction, our economists say we should lie back and let the free market diversify us.
Tourism, increasingly fragile and disconnected, doesn’t put enough into the till. To avoid crisis, we need true sustainability. We need to affirmatively plan, diversify and expand our economy. We can’t wait for altruism from afar.
Can you see the handwriting on the wall? In the shadow of multimillion-dollar condos, there are thousands of homeless and working poor. We can’t care for the seniors, the roads, the schools or the university. We have billions in unfunded liabilities.
Can we call this prosperity? The economics we use don’t factor in the realities of our life together. They haven’t come around to Thomas Piketty and his revelations on capitalism in the 21st century.
Much of the capital in tourism is from offshore, so the profits go offshore. What’s left pays minimum wage and the general excise tax and transient accommodations tax. Raising the minimum wage isn’t enough. We need a down-home backup economy that has the leverage to keep our money and talent here to augment the economy and equalize the disparity.
Instead, we’re the state that says no. Beyond the bureaucracy and permitting snafus, we’re mired in dangerous negativity on land use, water, GMOs, biofuels, aquaculture, astronomy, geothermal, even dairies and, of course, interisland ferries.
Watch out: Tourism is breakable. We could lose it any time to oil prices, global outbreaks, terrorism or just competition. And soon enough climate change will give us extreme storms and take our beaches.
Just as we should build infrastructure to deal with climate change, we need to build a backup industry to deal with the devolution of tourism. Let’s look at some of the candidates:
» It’s not military or federal construction. Dan Inouye is gone.
» Renewable energy might save us money on foreign oil, but we still need a way to store and export it.
» The Legislature is not supporting tech. After failing to extend the High Technology Development Corp.’s lease at Manoa Innovation Center, it failed to fund a replacement, leaving startups in limbo.
» Research at the University of Hawaii could bring in more grants, but grants are not an industry.
» Fashion is great but too small for salvation, and we’re a long way from manufacturing.
» We’ve talked about attracting more overseas patients to our health care system and more overseas students to our educational system, but it’s too soon for prime time.
So what industry should we focus on?
Well, the Kakaako Generation is instructive. It elevates innovation, local culture, food and environment. So why don’t we take a look at high-tech agriculture: aquaponics?
Aquaponics is a well-developed science and perfect for diversification. It can feed us and satisfy our diversity of tastes, reduce imported food, create green-collar jobs, complement tourism and give us something to export.
Hawaii is perfect for aquaponics. We have an ideal growing environment, renewable energy and willing expertise, training and extension from the College of Tropical Agriculture and Human Resources and the state Department of Agriculture.
Startup aquaponics doesn’t require much land, labor, water or capital and can yield quality protein and produce in our backyards or at commercial scale from limited fish food, without the physical effort of conventional agriculture.
But waiting for the spontaneous maturation of an aquaponics industry won’t work. That kind of thinking is what gave us our mono-economy. San Diego has biotech only because it took action.
Aquaponics has popular appeal without political opposition, so let’s start there. Hydroponics could come next. Later we can work on other possibilities like open-ocean aquaculture, and someday maybe even marijuana.
Hopefully, the new generation can get through the obstacle course of securing space, financing and permitting. But they’ll need capital to scale up, and if they can’t get it here, they’ll have to look elsewhere.
To get to the next step, government has to give them a nod, an incentive, a break on taxes or permitting. Something to build their confidence, to get them to take the risks they wouldn’t otherwise take.
We also need public education to encourage people to buy aquaponics products, especially tilapia, go along with any incentives and encourage our kids to go into the industry. Spending for a backup economy is money well spent.
One thing is for sure: We need affirmative action to add this to our economy. The free market, if there is such a thing, is not enough. Government needs to lead. In an island state we have to design our economy, not let it design us.
Jay Fidell, a longtime business lawyer, founded ThinkTech Hawaii, a digital media company that reports on Hawaii’s tech and energy sectors of the economy. Reach him at fidell@lava.net.
