A new report from the RAND Corporation shows that nearly 20 percent of Hawaii’s economy relies on the Pentagon. In the fiscal years 2007-2009, Defense Department spending in Hawaii averaged $6.5 billion per year — $4.1 billion for personnel and $2.4 billion for the purchase of goods and services in Hawaii.
“It’s common knowledge that defense activity in Hawaii plays a significant role in Hawaii’s economy, but the size of that role has not been previously studied and quantified,” said senior RAND economist and lead author of the study James Hosek, in a released statement.
“For example, 20 percent of defense procurement goes to the professional, scientific and technical services industry, and generates further economic activity.”
The study was done in cooperation with the Hawaii Institute of Public Affairs and the Military Affairs Council of the Chamber of Commerce of Hawaii, both of which asked RAND to make an assessment of the relationship between defense department spending and Hawaii’s levels of output, employment and earnings.
According to RAND, research for the study was sponsored by the Office of the Secretary of Defense and conducted within the Forces and Resources Policy Center of the RAND National Defense Research Institute, a federally funded research and development center sponsored by the Secretary of Defense, the Joint Staff, the Unified Combatant Commands, the Navy, the Marine Corps, the defense agencies and the defense intelligence community.