Statewide survey: ‘Housing costs and US mainland competition’ are main concerns in developing a digital economy

To gain a deeper understanding of how local companies utilize digital and broadband technology for their business operations, the Hawai‘i Department of Business, Economic Development and Tourism (DBEDT) Hawai‘i Broadband and Digital Equity Office (HBDEO) recently published its Hawai‘i digital economy survey involving more than 1,000 businesses.

To better understand what companies and nonprofits need to assist them digitally in Hawai‘i, the state sought an assessment on the participation of Hawai‘i businesses in the digital economy. The statewide assessment of Hawai‘i’s digital economy was undertaken for the state of Hawai‘i, led by HBDEO in collaboration with the DBEDT Research and Economic Analysis Division (READ).

In late 2023, HBDEO initiated a survey of businesses registered in Hawai‘i to collect data on how they utilize and participate in digital economy activities. In particular, the study focused on revenue generation from and deployment of human resources in the digital sector. This included data collection in areas such as operations, business-to-business, and business-to-consumer markets, applying the US Bureau of Economic Analysis (BEA) framework of priced digital services, infrastructure, and e-commerce with adaptations for Hawai‘i’s unique and specific economic characteristics whenever appropriate.

A total of 1,088 Hawai‘i private businesses from across the state responded to the survey between Sept. 12, 2023 and Feb. 7, 2024. OmniTrak Group Inc. coordinated the survey under the direction of HBDEO and READ leadership to fulfill DBEDT’s purpose and objectives and to meet all survey requirements.

“The driver and critical infrastructure for the global economy has become digital connectivity,” said state Strategic Broadband Coordinator Chung Chang. “As broadband access and speeds have increased, participation has grown to include new opportunities for both consumers and businesses.

“By utilizing findings from both this digital economy survey and the Hawai‘i Digital Equity Plan recently approved by federal officials, we hope to strategize how to grow the digital economy and enhance broadband service statewide so businesses and their clients can thrive,” Chang said.

The objectives of this research project were as follows:

• To collect data regarding the practice of the digital economy by Hawai‘i businesses including data that can be used to estimate the size of the digital economy in Hawai‘i.
• To obtain statistics on business digital activity participation, including characteristics of the labor force and capital usage within the digital economy.

To learn more about the digital economy survey results, visit the HBDEO website at broadband.hawaii.gov/digital-economy-study.

Key highlights

Highlights from the 2024 study include the following:

• 51% of private businesses engaged in digital activities to generate revenue in their operation;
• 47% of private businesses assigned employees to digital activities;
• 8.7% of total business revenues in 2022 were derived from digital activities based on sectors identified as primarily responsible for producing digital economy goods and services;
• 46% of businesses with digital activities (revenue) expected increasing revenue over the next five years;
• 38% of businesses with digital activities (employment) expected increasing employment in the next five years;
• 11% of private businesses have employees who work remotely from outside Hawai‘i;
• 4% of businesses with digital activities (revenues) expected decreasing office space needs over the next five years;
• 67% of private businesses statewide experienced an interruption of internet accessibility and average internet downtime of 9.8 hours per month;
• Housing costs and competition from US mainland were the main concerns in developing
  digital economy in Hawai‘i.