UHERO report: Commercial fishing shows strong potential to diversify Maui’s economy
A new report by the University of Hawaiʻi Economic Research Organization (UHERO) identifies potential opportunities to diversify Hawaiʻi’s economy by analyzing a variety of industries across counties in the US and the state.
“Hawaiʻi‘s economy depends heavily on tourism, and is therefore vulnerable to sudden drops in visitor numbers as well as inconsistent and slow growth in tourism revenue for the past 30 years,” UHERO reports. “In response to these issues—which became especially salient during the COVID-19 pandemic—policymakers in Hawai‘i increasingly emphasize the need to diversify. Still, it is not clear which industries Hawai‘i could diversify into.”
Based on industries already in Hawaiʻi, the study shows Hawaiʻi has great potential for ocean-based industries—such as fishing, fish farming and hatcheries, boat building, port and harbor operations, and seafood packaging. Additionally, the study highlights opportunities to grow industries that align with Hawaiʻi’s traditional strengths while also offering potential for diversification, such as hospitality, water transportation, and video production.
The report authors—UHERO Assistant Professor Steven Bond-Smith and UHERO graduate research assistant Sumit Ilamkar—developed these possible opportunities after studying the industrial composition of all counties in the US to measure relatedness between industries. To find diversification opportunities they examined the industrial composition of Hawaiʻi’s counties to identify underperforming industries with a higher probability of being more robust because they are related to existing strengths.
In Maui County, the top industries by relatedness density with location quotients less than one are finfish fishing, rice farming, shellfish fishing, boat building and fruit and tree nut combination farming. “The co-location patterns of these industries in the rest of the US indicates that they are likely to appear in Maui County alongside its existing industries,” according to the UHERO report.
“The information in this report will be useful for policymakers and legislators seeking advice for economic development policy and for businesses and entrepreneurs seeking new opportunities,” the report notes. “It also presents Hawaiʻi as a case study of an approach that will be useful for other places looking for strategies to diversify.”
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