Building the Foundation for Hawaii’s Next Economy

Hawaii knows the challenges of doing business in an island economy. The more important question is what we are going to do about them.

CNBC’s 2026 America’s Top States for Business rankings again highlighted many of the structural challenges facing our state. Hawaii ranked 50th overall, including 50th in infrastructure and cost of doing business, 49th in technology and innovation, and 45th in business friendliness.

We cannot change our geography. We cannot eliminate the cost of shipping goods across the Pacific or make land inexpensive overnight. But there are areas where the State can intervene, and DBEDT intends to concentrate on one of the most important: building the infrastructure and facilities Hawaii businesses need to make things here.

That means making deliberate public investments in manufacturing infrastructure across three areas of DBEDT’s economic diversification strategy: food and value-added product manufacturing through the Food and Product Innovation Network; advanced manufacturing and technology through the Hawaii Technology Development Corporation; and facilities that support Hawaii’s growing creative industries.

The strategy begins with something very basic: land.

Before we can construct a manufacturing center, incubator, production facility, or shared-use workspace, the State must have control of a site. That often requires acquiring land first, followed by feasibility and proof-of-concept work, planning and design, permitting and environmental review, construction, and finally the purchase and installation of specialized equipment.

Those steps take time, and they require significant public investment. But they are not simply costs. They are investments in Hawaii’s economic capacity.

We already have examples of what that investment can produce.

At the University of Hawaii Maui College, the Maui Food Innovation Center provides entrepreneurs with education, technical assistance and access to a state-of-the-art manufacturing facility where businesses can develop, manufacture and package products for market. The State invested approximately $8.5 million in the center’s Pilina manufacturing facility.

On Kauai, the Agribusiness Development Corporation is working to improve an existing facility in Kekaha by retrofitting the space with processing equipment. Rather than building from the ground up, this investment will leverage an existing State asset to expand value-added processing capacity and provide local producers with the infrastructure needed to manufacture and scale their products.

And at Honolulu Community College, Hawaii’s first dedicated Advanced Manufacturing Program Facility is preparing students and workers in precision machining, fabrication and other industrial skills using millions of dollars in modern manufacturing equipment. It demonstrates another critical part of this strategy: infrastructure and workforce development must advance together.

DBEDT and HTDC are beginning to build on that foundation. HTDC’s Kapaa Quarry Ocean Advanced Manufacturing Facility, also described as the Ocean Technology Manufacturing Hub, is creating shared industrial space for Hawaii ocean-technology companies that otherwise face a shortage of suitable manufacturing space. Importantly, the project is also a pilot – generating the operational information needed to design a future permanent advanced-manufacturing facility.

The same approach is being applied to food and consumer-product manufacturing.

Through the Food and Product Innovation Network, the State is creating a statewide system that can take an entrepreneur from research and product development through manufacturing, commercialization and ultimately export. The planned Entrepreneur Product Manufacturing Facility in Wahiawa, for example, is envisioned as a 34,000-square-foot shared facility with commercial kitchens, manufacturing suites, cold and dry storage, packaging and labeling areas, shared equipment, training space and business support.

This is how infrastructure begins to address both the cost of doing business and business friendliness.

For an individual entrepreneur, purchasing land, constructing a compliant manufacturing facility and acquiring specialized equipment can require millions of dollars before the first commercial production run occurs. Many small Hawaii companies simply cannot absorb that cost. Some remain small. Others outsource production overseas. Still others leave Hawaii.

Shared public infrastructure changes that equation.

Instead of requiring 20 businesses to independently purchase 20 sets of expensive equipment and build 20 separate facilities, the State can make a strategic investment in infrastructure that serves many businesses over many years. Businesses still have to compete, innovate and succeed in the marketplace, but the barrier to entering that marketplace becomes more attainable.

That is the role government can appropriately play: not operating the businesses, but building the platform from which businesses can succeed.

Over the next four years, this will require discipline and patience. Some years the visible investment may be land acquisition. The next may be a proof of concept or design appropriation. Construction funding may follow in a subsequent legislative session, with equipment and operations coming after that.

Each appropriation should therefore not be viewed in isolation. It is one step in a larger pipeline:

The objective is not simply to build facilities. It is to build an interconnected manufacturing ecosystem where Hawaii residents can develop an idea, learn the skills to manufacture it, produce it commercially, scale a company, hire local workers and sell Hawaii-made products to markets beyond our shores.

Hawaii will always have inherent costs associated with being an island state. Improving our competitiveness will therefore require us to be intentional about the costs we can reduce.

That will require investment.

But if we are serious about improving Hawaii’s business environment, diversifying our economy and creating industries capable of sustaining the next generation of Hawaii’s workforce, then we also have to be serious about building the physical foundation those industries require.

That is the foundation DBEDT intends to build.

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