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Small Business Report Card for Hawai‘i

Thomas Angermann / Flickr
Thomas Angermann / Flickr

The number of small businesses in Hawai‘i has declined in recent years, but the number of people employed by small businesses has increased. Here’s Pacific Business News Editor in Chief A. Kam Napier to explain.

PBN’s parent company, American City Business Journals, conducted research into the health of small businesses in 106 markets across the country.  This week, we examined how Honolulu is doing, compared to the national data.  From 2010 to 2013, the number of small businesses in Hawai‘i declined to 2%, but the number of people employed by small business increased by nearly 37%.

Carl Bonham with the University of Hawai‘i economic research organization thinks there may be a simple reason for this.  In his view, the rapid expansion of local solar companies during those years piled on the jobs.

Other experts PBN spoke to attribute the growth in jobs to a strengthening economy as Hawai‘i moved beyond the great recession.  Small business strong enough to survive were feeling confident enough to add to their payrolls.

In 2013, the most recent year for which data was available, there were nearly 21,000 small businesses in Hawai‘i.  Small business, for this report, is defined as 99 employees or fewer.  Nearly 337,000 people in the state are employed by small business.

It’s a huge part of the economy, but the ACBJ analysis found, it could probably be even bigger.  Honolulu ranked 87th out of 106 markets analyzed for a combination of factors conductive to forming a small business.  Our unique challenges include the cost of doing business, export costs, access to capital and the difficulty of reaching markets beyond the islands. 

A. Kam Napier is the editor-in-chief of Pacific Business News.
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