Hawaii officials plan to found a new organization to attract more local businesses to lucrative defense contracts – and find ways to use military money to bolster other industries in the state. One of the challenges the alliance would envision is a possible decline in military spending.
The plan is based on analysis by the Ministry of Economy, Economic Development and Tourism of the Defense Sector, funded by a grant from the Office for Cooperation of the Local Defense Community.
In an action plan drawn up by DBEDT, the establishment of a Hawaii-oriented, DoD-oriented industry-specific organization (Defense Sector Alliance) is required to identify current and future challenges in the industry and to develop solutions.
The new organization would bring together representatives from industry and business who work closely with the military and who invest most in defense spending.
It would be tasked with finding ways to expand contracting opportunities for local small businesses and train cybersecurity specialists.
While state officials would help the organization start with federal grants, they ultimately want to step down. “The part of the alliance will be handled by a contractor who has experience in working with sector partnerships and building these types of alliances,” said John Greene, Defense Industry Specialist at DBEDT.
Hawaii ranks second in states where defense spending is considered the highest percentage of their GDP, just behind Virginia. During fiscal 2018, the Department of Defense’s direct spending through contractions pumped $ 7.2 billion into Hawaii’s economy, which is roughly 7.7% of the state’s GDP.
“Overall, the DoD dependency is moderately high with an average of 46% in the companies surveyed,” says the state’s action plan. “This suggests some weakness with the potential of a threat in the event of a decline in defense market spending.”
Greene said the alliance would make local businesses more resilient by helping them navigate the bureaucratic world of government contracts and network with one another for non-military opportunities.
“We thought the best way to do this is to let the private sector take the lead and build an alliance,” Greene said.
Jason Chung, vice president of the Hawaii Military Affairs Council – part of the Hawaii Chamber of Commerce – said the pandemic had highlighted the state’s over-reliance on tourism, noting that military spending was among military spending since the pandemic was the travel industry gutted few constants in Hawaii.
“It’s a great opportunity, especially now when you look at the current economic climate. Because this allows us to set up the structure so that the necessary relationships are really built, ”said Chung.
The alliance is open not only to military entrepreneurs, but also to a wide variety of companies and institutions, including universities. Chung expects the Military Council to play a very active role in building and running the organization.
“We are a kind of connective tissue that brings these people together where the local officials, science, industry and the military are,” he said.
The military is already working closely with the University of Hawaii. The Air Force pays for UHs Maui high performance data center and the Navy helped create its Applied Research Laboratory at UH Manoa.
The military is also looking for opportunities to support additional computer science and cybersecurity programs at the university, which it sees as a potential recruiting pool.
“What’s really exciting is some kind of emerging industry made up of information technology, cyber, data science, data analytics and the growing field of intelligence,” Chung said.
The Chinese and Russian governments have invested heavily in training hackers to spy on and disrupt networks of rivals, including the United States.
The National Security Agency has quietly played a role in creating jobs for programmers and cybersecurity specialists in Hawaii. Chung said organizations like the NSA and other new military bases are helping attract talent and provide high-paying jobs for tech-savvy locals that didn’t exist before.
Chung sees this as an opportunity to further expand the technology sector in Hawaii by turning it into an innovation center that benefits from the large military presence on the islands.
Oahu is home to the Indo-Pacific Command of the Military, the nerve center of military operations in the Pentagon’s “Top Priority Theater” amid growing US-China confrontation across the region.
However, cybersecurity has also presented challenges to local contractors in Hawaii who either lack technological know-how or who cannot afford to pay those who have the expertise.
The Department of Defense increasingly wants companies to work with to protect its information from spies. Some fear that they will be placed at a disadvantage compared to larger contractors on the mainland.
“We definitely don’t want to lose contracts that are currently held by the local companies just because they don’t meet the cyber requirements that DOD put in place,” said Greene. He said the alliance and other initiatives would help them meet the specifications.
Greene said cybersecurity is increasingly something companies outside of the national security world need anyway, and that this provides an opportunity to better educate Hawaii’s business community about the problem.
“Cybersecurity isn’t just a DOD requirement. It is used to protect your personal information, protected information from companies, ”he said.
However, the military has limited space to build and expand. Conflicts become more common as the military tries to launch new projects near communities that continue to grow.
While Hawaii’s reliance on military funds has also sparked criticism of the environmental impact of operations and complaints about noise and unexploded ordnance, spending is unlikely to decrease anytime soon.
Greene said it is important to help local businesses take advantage of these benefits so that they can build skills that can be used in other sectors.
“I don’t want people to think we’re trying to rely on DOD,” Greene said. “We hope to take advantage of DOD and the needs they have to empower our local businesses so they can work in areas not related to DOD.”
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