Hawaii is embarked on a long-term quest to transform and diversify its economic base to be less dependent on just two or three major industries. As we have learned over the years and are reminded of with the current economic slowdown, it is vital that we have a range of economic activity on which to rely and to help us create high-paying, high-skilled jobs for the future.

Hawaii's strategy for transformation and diversification includes developing our capacity to support innovative economic activity, helping to develop innovative businesses in the technology and creative sectors, and encouraging the dispersion of high skills and technology throughout the economy. This is an ambitious agenda that encompasses a multitude of efforts in education, workforce development, infrastructure revitalization, and facilitation of innovation sector growth.

To ensure that this effort is effective we must be able to measure our progress in each of the phases of transformation. The set of innovation indicators presented in this report is meant to serve as that measurement tool. It provides pivotal metrics that will tell us how well our innovation capacity is developing, how this capacity is translating into an innovation sector, and how this capacity and the development of the innovation economy is raising our overall productivity, competitiveness and standard of living.

The indicators, compiled and analyzed by DBEDT's Research and Economic Analysis Division, draw from among the best models for such measurements nationwide, as well as past efforts in Hawaii. They will allow us to continually monitor our progress in economic transformation and provide insight into what efforts are most effective.

DBEDT wishes to thank the many individuals and agencies that helped review the indicators presented here and their very helpful comments and suggestions for improvement. Hopefully, these will provide government and the private sector with the essential measurement tools to guide our efforts and shared goal of a prosperous and globally competitive Hawaii economy.

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