Hawaii manufacturers showcase innovation during tour for policymakers – Hawaii News Now

Report on State Support for Hawaiian Manufacturing and Alignment with Sustainable Development Goals

Introduction: The “Innovation Crawl” Initiative

An “Innovation Crawl,” hosted by the Chamber of Commerce Hawaii and the Hawaii Technology Development Corporation (HTDC), was conducted to provide state lawmakers with an assessment of how local grants are facilitating the growth of Hawaii’s manufacturing sector. The initiative showcased how small businesses are navigating economic challenges while contributing to a more resilient and innovative local economy, directly aligning with several key United Nations Sustainable Development Goals (SDGs).

Fostering Economic Growth and Innovation (SDG 8 & SDG 9)

The event highlighted state-led efforts to foster sustainable economic development in line with SDG 8 (Decent Work and Economic Growth) and SDG 9 (Industry, Innovation, and Infrastructure). The primary objective is to transition Hawaii from a service-based economy to an innovation-driven one, thereby creating high-quality jobs and retaining local talent.

• State-Sponsored Grant Programs: The HTDC provides critical financial support through three main programs:
  1. Hawaii Small Business Innovation Research program (HSBIR)
  2. Accelerator and Small Business Training programs
  3. Manufacturing Assistance Program (MAP)
• Policy Recommendations: Stakeholders, including State Senator Glenn Wakai, advocate for policy changes such as tax benefits and reduced regulations to stimulate growth and innovation within these industries.

Case Study: Enhancing Sustainable Production (SDG 12)

Pacific Allied Products, a 60-year-old plastics manufacturer, serves as a prime example of advancing SDG 12 (Responsible Consumption and Production). With the assistance of a state grant, the company acquired new equipment to increase efficiency and reduce its environmental footprint.

• Reduced Dependence on Imports: The new machinery enables the company to meet growing local demand for bottled water, significantly decreasing the need for mainland imports.
• Logistical Efficiency: According to Plant Manager JB Helekahi, “One container of our raw materials that saves Hawaii from shipping in like 28 containers of bottled water.” This localization of the supply chain reduces transportation-related carbon emissions and strengthens local economic resilience.

Challenges to Sustainable Industrialization (SDG 7 & SDG 9)

Despite progress, local manufacturers face significant obstacles that impede the full realization of sustainable industrialization as envisioned in SDG 9. A primary concern is the high cost of energy, which presents a barrier to achieving SDG 7 (Affordable and Clean Energy).

• High Energy Costs: Hawaii’s energy costs are 2.5 times the national average. Defense manufacturer North Star Scientific Corporation reported monthly electricity bills reaching $20,000, illustrating the financial strain on energy-intensive technology companies.
• Operational and Logistical Hurdles: Other challenges cited include the high costs of shipping, raw materials, real estate, and labor.
• Economic Volatility: Broader economic issues such as tariff uncertainty and inflation further complicate the business environment.

Strategic Outlook and Recommendations

To overcome these challenges and advance the state’s sustainable development agenda, a multi-faceted approach is required. Manufacturers are implementing strategies such as automation to improve efficiency, as noted by North Star Scientific Corporation. Concurrently, policymakers are urged to create a more supportive ecosystem.

• Integrated Energy and Economic Policy: Senator Wakai emphasized that energy costs must be a central component of discussions on economic growth, workforce development, and infrastructure.
• Continued Financial Support: Ongoing support through grants, incentives, and tax breaks is deemed essential for local manufacturers to remain competitive.
• Regulatory Reform: Reducing regulatory burdens is proposed as a cost-effective measure to unlock growth opportunities for innovative industries.

Identified Sustainable Development Goals (SDGs)

The following SDGs are addressed or connected to the issues highlighted in the article:

• SDG 7: Affordable and Clean Energy: The article explicitly discusses the high cost of energy in Hawaii as a major challenge for manufacturers. It mentions that electric bills can reach $20,000 a month for one company and that Hawaii pays “2.5 times the national average for energy usage.” This directly relates to the goal of ensuring access to affordable energy.
• SDG 8: Decent Work and Economic Growth: The core theme of the article is supporting local manufacturers to grow their businesses, navigate economic challenges, and create a resilient “innovation economy.” It discusses grants, incentives, and workforce development to keep talent and businesses in Hawaii, all of which are central to promoting sustained, inclusive, and sustainable economic growth.
• SDG 9: Industry, Innovation, and Infrastructure: The article focuses on Hawaii’s manufacturing sector, showcasing how grants help businesses buy new equipment, automate processes, and innovate. The “Innovation Crawl” and the work of the Hawaii Technology Development Corporation (HTDC) are direct examples of efforts to build resilient infrastructure, promote inclusive industrialization, and foster innovation.
• SDG 12: Responsible Consumption and Production: The article provides a specific example of a company, Pacific Allied Products, reducing its environmental and logistical footprint. By producing raw materials locally, it avoids shipping 28 containers of finished goods for every one container of raw material, which is a clear move towards more sustainable production patterns and efficient use of resources.

Specific SDG Targets

Based on the article’s content, the following specific targets can be identified:

• Target 7.3: By 2030, double the global rate of improvement in energy efficiency. The article highlights the extreme cost of energy, which forces companies to “be as efficient as possible.” The senator’s comment that “technology… sucks a lot of energy” and that energy costs must be part of the economic growth discussion points to the critical need for energy efficiency improvements.
• Target 8.2: Achieve higher levels of economic productivity through diversification, technological upgrading and innovation. The article discusses the state’s goal to “change away from a service economy to an innovation economy” and showcases companies using new equipment and automation to improve manufacturing, which directly aligns with this target.
• Target 8.3: Promote development-oriented policies that support productive activities… and encourage the formalization and growth of micro-, small- and medium-sized enterprises, including through access to financial services. The grant programs offered by the HTDC, such as the Manufacturing Assistance Program (MAP), are explicit examples of financial services designed to help small businesses thrive.
• Target 9.2: Promote inclusive and sustainable industrialization. The entire initiative described in the article, from the “Innovation Crawl” to the provision of state grants, is aimed at strengthening and growing Hawaii’s local manufacturing industry.
• Target 9.3: Increase the access of small-scale industrial and other enterprises… to financial services. The article names three specific grant programs offered by the HTDC to support small businesses, directly addressing this target.
• Target 9.b: Support domestic technology development, research and innovation. The showcase of North Star Scientific Corporation, an engineering firm that “designs and makes electronics and radar systems for the military,” is a prime example of supporting local technology development and innovation.
• Target 12.2: By 2030, achieve the sustainable management and efficient use of natural resources. The example of Pacific Allied Products reducing the need for shipping by a factor of 28 is a direct illustration of achieving more efficient use of resources (in this case, fuel for transport and associated logistics) through localized production.

Indicators for Measuring Progress

The article mentions or implies several indicators that can be used to measure progress towards the identified targets:

• Cost of Energy: The article provides specific data points that serve as indicators of the energy challenge. These include “electric bills can reach $20,000 a month” and paying “2.5 times the national average for energy usage.” Progress towards Target 7.3 could be measured by a reduction in these figures.
• Financial Support for Small Businesses: The existence of three grant programs (HSBIR, Accelerator, and MAP) is mentioned. An implied indicator for Targets 8.3 and 9.3 would be the number of businesses that receive these grants or the total amount of financial assistance disbursed to the manufacturing sector.
• Investment in Technology and Automation: The article mentions a manufacturer buying “new equipment” and another using automation to “reduce the amount of labor.” An indicator for Target 8.2 would be the level of capital investment in new technology and automation by local industries.
• Resource and Shipping Efficiency: A very specific, quantifiable indicator is provided for Target 12.2. The statement that “One container of our raw materials that saves Hawaii from shipping in like 28 containers of bottled water” is a direct measure of improved resource efficiency. This ratio could be tracked as an indicator of progress in localizing supply chains.

Summary of SDGs, Targets, and Indicators

Source: hawaiinewsnow.com