Described by visitors as paradise, Hawaii is strategically located in the Pacific Ocean and plays a vital role in managing potential threats to the Asia-Pacific region. The US military is thus an integral part of the state community. Hawaii is also one of the few states that is home to all branches of the military, including the Army, Navy, Navy, Air Force, Coast Guard, Space Force, and National Guard.
It wasn’t until this month that the first Space Force Guardians were sworn in and assigned to the Air Force Research Laboratory on Maui. The officers will continue their work with Detachment 15 at the Haleakala Summit, where they are working on raising awareness of the US space domain.
Defense Sector in Hawaii Important Component
Defense is the second largest sector of the Hawaiian economy after tourism, and Aloha state accounts for a total of $ 7.5 billion in defense spending. Defense spending also represented 7.7% of the state’s GDP in 2018, while more than 70,000 residents were employed in the defense sector at the time – including more than 41,000 military personnel in active service. Hawaii ranked second behind the Commonwealth of Virginia in state defense spending.
Given these numbers, it is not surprising that Hawaii has sought to form a defense industry “alliance” that supports local businesses and gives those companies the opportunity to compete for lucrative defense contracts. In addition, the alliance would support efforts to use military funds to grow other sectors of the Hawaiian economy.
The plan is based on a recent analysis by the Department of Business, Economic Development and Tourism (DBEDT) and was funded with a grant from the Office of Local Defense Community Cooperation.
“Hawaii’s military defense sector remains strong and is helping to stabilize our economy during this pandemic,” DBEDT director Mike McCartney said in a statement. “As the second largest industry in the state, military procurement spending this year generated $ 4.5 billion in economic impact with $ 2.3 billion in federal contracts across the state and helped maintain more than 30,000 jobs nationwide . Our SWOT Analysis Report and Action Plan for the Hawaii Defense Economy Project enables us to identify and define initiatives that will help us diversify and strengthen our state’s economic resilience, which is more important now than ever. “
Established an industry-specific DoD organization in Hawaii
DBEDT’s action plan has called for the establishment of a Hawaii-focused Industry Department of Defense (DoD) organization to identify current and future industry challenges and develop solutions.
The alliance would include the representation of three industry priorities, including engineering services, which remain important due to the very high annual defense spending in Hawaii, and include system repairs; Maintenance and plant engineering; IT services that support non-defense jobs in a variety of industries across the state; and ship repair and construction, as Pearl Harbor Naval Shipyard (PHNSY) is the largest and most comprehensive fleet repair and maintenance facility in the country between the US West Coast and the Far East.
Pearl Harbor is currently the state’s largest industrial employer, employing more than 5,000 civilian workers and more than 500 active Marines.
Strengths and weaknesses of DoD dependency
The DBEDT study identified the key strengths and opportunities, but also some weaknesses and threats, that the state is facing. On the positive side, the outlook for the financial and defense markets was seen as strong and should continue to offer new opportunities in the future.
However, market flexibility remained an issue while the state’s DoD dependency persisted, indicating a potential threat should defense spending in America’s 50th state decline.
The goal of the alliance would be to bring together representatives from industries and companies that work closely with the military and are most invested in defense spending. It would also be tasked with finding new ways to expand contracting options for local small businesses. Even if government officials would help the new group get federal grants, the long-term goal is to pull out and instead have them run by a contractor who has experience working with sector partnerships to bring businesses and the DoD together.
The Hawaii Defense Economy (HDE) Alliance also announced that it will also provide a program management function and working group approach to support the success of other complementary recommendations of the Action Plan. This includes personnel / curriculum development; a Hawaii-based DoD small business mentorship and support program; and regulatory / legislative advocacy to improve the business climate in the state.
