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DBEDT’s Research and Economic Analysis Division has posted an updated report on Hawaii’s industrial sectors on it’s website at:
http://hawaii.gov/dbedt/info/economic/data_reports/emerging-industries

This is probably not going to be a “hot” media story – HOWEVER it is a fairly comprehensive report that details the impact of the recession on economic segments in the state. It also easily breaks out industries that are growing stronger (specialty health care and call centers) vs. industries that are declining (broadcasting and pharmacies).

Key observations from the update report are:
·        Scientific Research and Development has been among the highest performing activities.  While still a small industry group, R&D job growth averaged 5.2% over the 2002 to 2010 period, nearly four times faster than the growth in all civilian jobs and an average 3.3 percentage points per year faster than growth of the same industry group nationally.  Moreover, R&D has achieved a higher than national concentration in Hawaii’s economy, 33% more concentrated than for the industry nationally.  Within R&D, Biotechnology was also a very high performing activity, with an even greater concentration in the economy than other R&D activity by 2010.

·        More than a dozen activities were high performing, by not only exceeding the state average in terms of job growth, but also performing better than their national counterparts.  Among those were Medical Testing, Aquaculture, Performing & Creative Arts, Specialty Health Care, Business Consulting, Design Services, Technology Manufacturing and Computer Services.

Click to enlarge table - Table S-1. Overall Performance of the Targeted Industry Portfolio

·        Adjusting for overlaps, the high-performing activities in the target industry portfolio (Base- growth and Emerging) accounted for about 69,600 jobs or 9.0% of all civilian jobs in 2010.  However, between 2002 and 2010 those activities generated 20% of the total gain in jobs for the civilian economy, or about 15,000 new jobs.

·        For about half of the high performing activities the average annual earnings exceeded $50,000 in 2010.  Engineering and Related Activity had the highest average at just over $83,000.  The lowest average earnings were in Performing & Creative Arts and Call Centers, at about $20,000.  By comparison, the average earnings for the civilian economy in 2010 were $45,900 by preliminary estimate.

·        Seven activities in the portfolio, such as Technical Consulting, Arts Education, Special Education, Marketing & Related, Music, Cultural Activities, and Health Practitioners, fell into the Transitioning category.  They gained jobs over the period but did not keep up with national growth for same activities resulting in a loss of competitive national industry share.  Three of those activities, however, grew much faster in terms of jobs than the civilian economy as a whole.

·        Average earnings among the Transitioning activities were generally lower than for the high performing group with health practitioners as an exception. .  Health practitioners had a high average earning at $71,200 and also had the most jobs in the Transitioning Group at about 20,900.

·        The positive side of the Transitioning activities in the portfolio is that they did contribute to job growth in the economy.  The concern is that they generally lost ground competitively to the same activities at the national level.

·        About a dozen activities in the portfolio fell into the Declining industry category as the result of net job losses for the 2002 to 2010 period.  Notable among these were Farm Production, Architecture, Pharmacies, Information Technology, Broadcasting, Publishing and Film/TV. Film/TV jobs mainly reflect just the production crews.  It does not include actors, directors, writers and other creative occupations.  Those jobs are included in various industries of the Creative Sector.  However, the distinction between those engaged in Film/TV as opposed to live performances is not made in the available data.  It is noted that independent artists, writers and performers as a group averaged a 2.2% increase in jobs over the 2002 to 2010 period.

·        Except for Pharmacies, the Declining activities also lost jobs at the U.S. level, suggesting that there were some national forces influencing the declines.  However, the competitive measures show that the losses were generally more severe for Hawaii than nationally.

·        Jobs in the Declining industry groups totaled an estimated 36,000 in 2010 (4.6% of all civilian jobs), representing a loss of more than 3,400 jobs from 2002.  Eight of the thirteen industry groups had earnings averages above $50,000.

·        Declining industries are not necessarily dying activities.  For instance, Film/TV is a volatile activity that depends on the number of productions filming per year.  With more new shows filming in late 2010, the 2002-2010 job losses may be recouped in the next several years if the current production levels continue.  In some cases, like Information activity, the technology for developing and delivering information is improving rapidly, and perhaps reducing the need for workers.  In those cases the declining activities may stabilize at some point and resume some growth as the economy expands.  Finally, some Declining activities may be tied to other activities like tourism and defense activity and may be reflecting ups and downs in those industries rather than independent local or export markets.

Submitted by Eugene Tian, Ph.D. with DBEDT

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