Technology s Role in the Economy Technology will be an important cornerstone in defining Hawaii s economy in the 21st century. Certainly other industries like tourism, the military, agriculture and others will continue to be vitally important activities. However, technology development will be the key to boosting the State's productivity and competitiveness in the economy of the future. Let me explain why technology is so important. Research over the past several decades has shown that the impact technology has on productivity is a major factor in how fast economies grow and how well they can compete in national and international markets.
Technology has immense impact on the economy.
It is estimated that as much as half of all economic growth in the U.S. in recent decades has been due to the application of technology in the economy. Using some tools of economic analysis, we estimated the individual contributions of capital, labor and technology to Hawaii s economic growth since the early 1970s. The results were surprising. They helped explain why we have had difficulty adjusting to the end of the post-statehood boom as well as highlight why technology development is so vital. The chart in Figure 1 shows the economic growth for Hawaii and the U.S. from 1970 to 1990, broken down by the contributions of capital, labor and technological change.