Hawaii lags in
ability to compete

A national study faults the
Isles for the absence of a
strong technology sector

Hawaii's high and low points

By Richard Borreca

Hawaii doesn't compete well when it comes to competitiveness with only seven states ranking lower, according to a new national study of the states.

The study from the Beacon Hill Institute of Boston's Suffolk University says a state is competitive "if it has in place the policies and conditions that ensure a high level of per capita income and continued growth."

Hawaii scores low, according to the study because of "anticompetitive government policies and the absence of a strong technology or finance sector."

The top ten states according to the competitiveness survey are Delaware, Massachusetts, Wyoming, Washington, Vermont, Colorado, New Hampshire, Connecticut Minnesota and California.

The states ranking below Hawaii in the survey are Oklahoma, Alabama, Nevada, Arkansas, Louisiana, West Virginia and Mississippi.

The study did give Hawaii high marks for "the presence of a large number of immigrants and large inflows of foreign direct investment."

"It also scores high for infrastructure, mainly by ranking number one for air travel," the report notes.

The survey said it rates immigrant labor highly because it says "the more foreigners relative to the native born-born population, the more motivated the workforce is likely to be."

The negative rankings, according to the survey, show that Hawaii is at a competitive disadvantage because of its taxes, bond rating, budget deficit and benefits to the unemployed.

Cost of living is also high, with the survey saying that 45 states have a lower average rental cost for a two-bedroom apartment.

Lowell Kalapa, Hawaii Tax Foundation executive director, said the report reinforces his concerns about state government.

"We are so heavyhanded with government, we don't allow enough air to breath to grow the kind of jobs that will make the economy competitive," Kalapa said.

"This is what is so frustrating in this legislative session, our elected officials don't understand what makes the economic engine run," he added.

Seiji Naya, state business and economic development director, agreed, the survey wasn't surprising, but noted that since it was completed with 1999 and 2000 data some rating have changed.

But, he noted, overall the survey is accurate.

"It is very clear that we are ranked very low, I have no excuse, we will improve because some of the data is very old, but our taxes are high compared to others," Naya said.

"I look at this as a reminder that we can improve," Naya said.



Hawaii's high points

The survey rated Hawaii high on (with state rank):

>> Workers compensation: 1st
>> Crime index improvement: 17th
>> Number of households with Internet access: 18th
>> Air passengers per capita: 1st
>> Percentage of population without health insurance: 13th
>> Percentage of population graduated from high school: 17th
>> Percentage of population born abroad: 5th
>> Infant mortality rate: 15th
>> Nonfederal physicians per capita: 9th

Hawaii's low points

The state scored poorly in these categories (with state rank):

>> Taxes as a percentage of gross state product (GSP): 37th
>> Bond rating: 48th
>> Budget deficit as percentage of GSP: 45th
>> Average benefit for unemployed: 41st
>> Crime index: 38th
>> Travel time to work: 44th
>> Average rental cost: 46th
>> Percentage of labor force represented by unions: 49th
>> Unemployment rate: 36th
>> Percentage of adults in labor force: 36th
>> Research and Development National Science Foundation funds per capita: 39th
>> New patents per capita: 49th
>> Science and engineering graduates per capita: 31st
>> Scientist and engineering degrees awarded per capita: 33th
>> High-tech companies as percentage of companies: 50th
>> Bank deposits per capita: 36th
>> Venture per capita: 38th
>> Exports per capita: 50th
>> Employer firm termination per capita: 40th
>> Electricity prices: 50th

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