Economic diversification

Our residents deserve the opportunity to own a home, raise a family and stay throughout their lives in Hawai‘i while conserving our natural resources and preserving our way of life.

To achieve this goal, we must succeed in our efforts to diversify our economy, a fundamental cornerstone of our administration’s policy agenda.

As lieutenant governor, I have been fortunate to get a first-hand look at our state’s revenues and expenditures over the past seven years. I see the drivers of our economy and the trends that are emerging as we go forward.

For decades, tourism has been our primary economic driver, contributing to a boom in the development of our unique land resources. We have benefited tremendously from the growth of tourism and land development in Hawai‘i, but it has come at a cost. This model, based on an over-reliance on our limited resources, is not sustainable. Furthermore, it encroaches on our open spaces and increases our dependence on others for economic growth.

Economic growth and diversification are easier said than done. In 2002, Forbes Magazine said that doing business in Hawai‘i was “equivalent to suicide.” But we have come a long way since then. Last year, Forbes ranked Hawai‘i 27th in the nation, 10 spots better than the previous year.

Our steady improvement is due in part to the collective efforts of our residents and small businesses as well as the ambitious goals set by our administration. Among them: create more of our own clean energy through the Hawai‘i Clean Energy Initiative; improve science, technology, engineering and math (STEM) education in our schools; and expand knowledge-based economic opportunities through the Hawai‘i Innovation Initiative.

This initiative, launched in 2007, set in motion the long-term transformation of our economy from one that is over-reliant on land development to an economy that focuses on innovation and knowledge.

It is through developing the knowledge and talent of our young people and all of our citizens that we will build a foundation on which Hawai‘i’s economy can grow and diversify.

As the parent of four children, I believe it is important to cultivate an environment in which our children can remain in our state throughout their lives.

We can retain and attract intellectual and financial capital needed to realize economic diversification. To be successful, we must remain committed to industries that support our vision, such as clean energy, aerospace and technology.

Unfortunately, our state recently took a step backward with the tech industry, resulting from the passage of Senate Bill 199. This new law dramatically cuts the High Technology Business Investment Tax Credit, also known as Act 221, by making severe, retroactive limitations to claims for investments made in the high-tech industry.

While the limitations to this tax credit will provide some savings to our state in the short-term, this flawed measure has the potential to cripple an entire industry by changing the rules for the investment and business community midstream.

Regardless of this bill’s flaws, it is now law.

However, that does not mean we should give up and abandon our high-tech industry.

In the coming weeks and months, I will lead our state’s efforts to formulate solutions to expand our high-tech industry and put us back on track. Your input and involvement in this new endeavor will be critical to our success.

Virtually everyone wants economic diversification, but we must be disciplined, consistent and committed to the cause. Otherwise, we will continue to rely upon our limited resources until Hawai‘i just isn’t Hawai‘i anymore.

We still have time. By working together now, we can ensure a more prosperous tomorrow.

• James ‘Duke’ Aiona Jr. is the Republican lieutenant governor of Hawai‘i.