Diversify or Decline? The Search for Hawai‘i’s Next Growth Engine

Hawai‘i stands at a crossroads. With a long-standing dependence on tourism and federal spending, the state’s economy remains vulnerable to global shocks, climate change, and policy shifts. This chapter examines the critical need to build a more resilient and inclusive economy by cultivating sectors that align with the islands’ environmental constraints and cultural values. Rather than displacing tourism or defense, diversification in Hawai‘i means strategically expanding high-wage, low-carbon industries rooted in place-based strengths. It explores emerging and underutilized sectors such as clean energy, regenerative agriculture, sustainable aquaculture, technology and remote work, cultural and creative industries, and wellness services that hold promise for economic transformation. Each is evaluated not only for its market potential but also for its capacity to contribute to climate resilience, community well-being, and cultural revitalization. This chapter also highlights the structural barriers such as high costs, fragmented governance, limited access to capital, and political inertia that impede progress, calling for systemic reform and coordinated public-private action. Drawing from local case studies, economic research, and policy reports, this chapter makes the case that economic diversification is not simply a financial imperative but a cultural and ecological one. It argues for a generational commitment to shift Hawai‘i from overdependence to economic pluralism, where prosperity, sustainability, and self-determination are intertwined. This chapter concludes by urging stakeholders to act boldly and collaboratively, or risk perpetuating economic fragility in one of the world’s most uniquely vulnerable and valuable regions.