High Technology Development Corporation

The following final report for the High Technology Development Corporation’s (HTDC) 2001 High Tech Business Survey contains estimates by industrial grouping for high technology organizations and firms in the state of Hawaii for the year 2000. This report also features projections for the number and total revenue for high technology organizations and firms for the year 2002.

As part of its mandate, HTDC is required to make and publish a periodic report on the state of Hawaii’s high technology industry. HTDC has previously conducted surveys of the state’s technology companies and organizations in 1987, 1990, 1993, 1996, and 1998.

Mattson Sunderland Research and Planning Associates, Inc. was selected to provide consultant services for the 2001 High Tech Business Survey through planning and consulting with HTDC on implementing a survey to meet its data needs, assisting HTDC in developing survey questions and format, following up with survey non-respondents through contacting and interviewing them by telephone, keypunching survey data results, and developing a summary report and a final report on the survey’s findings.

Name, address, description of product or service, number of employees, gross revenues for the previous calendar or fiscal year; and other information sought from Hawaii firms in the 1998 survey were collected in the 2001 survey. A question series requested by the Department of Business, Economic Development, and Tourism (DBEDT) was also included. A copy of the mail questionnaire is included in this report.

HTDC managed the printing, postage, and mailing of survey instructions and information to organizations being surveyed. Mattson Sunderland Research conducted telephone follow-up with organizations not responding to the mailing.

NAICS (North American Industrial Classification System)[1] classifications were reviewed to determine the categories that will define the range of high technology businesses and organizations in Hawaii. The determination of which NAICS codes would be used to classify organizations and the definition of high technology were made by HTDC.

For the survey sample, HTDC provided the names of 682[2] firms and organizations. Additional high tech firms were provided from a concurrent survey for the Department of Business, Economic Development, and Tourism.[3] A total of 72 firms in the sample for DBEDT that responded to its survey was classified as high technology according to their responses to the industrial classification question (section B, question 2) on their returned questionnaires. Another 171 organizations in the sample provided by DBEDT that had not yet responded to the survey were classified as potential high tech by HTDC. The total number of firms classified as high tech in the survey effort was therefore 925.

During the telephone follow-up, we determined that 151 of these 925 organizations were ineligible for the survey sample. This included 135 firms with disconnected phone numbers, 15 with a phone number duplicated elsewhere in the sample, and one which declared itself ineligible for the survey. The adjusted number of firms classified as high tech in the survey was 774. This number of 774 represented our best estimate of the potential universe of high technology organizations in Hawaii.

The total number of firms from the high technology sample responding to the survey was 266; 161 returned a completed questionnaire by mail or fax and another 105 completed an interview after being contacted in a telephone follow-up.

In the tables and figures in this report, survey results for the sample of 266 responding high tech organizations is projected to the estimated total population of 774 potential high tech organizations in Hawaii. To do this, each of the 266 cases was multiplied by the weighting factor of 774/266, or 2.9098.

Responses to the categories and codes listed on page 4 were used to classify organizations in the survey into high technology categories. These codes, derived primarily from NAICS categories and supplemented with categories developed by HTDC when required, are featured in section B, question 2 of the questionnaire.

Firms were classified on the basis of what they recorded as their primary specialty. Firms checking a two-digit category other than 26 or 30 were classified as high technology.

The high technology classification of firms responding to the 2001 High Tech Business Survey is presented in Table 1. Of the 266 firms responding, 247 were designated as high tech according to their primary specialty.

The results of the 2001 High Tech Business Survey were projected to provide the estimate of the numbers and types of high tech firms in Hawaii featured in Table 2. This estimate is derived from projecting the primary specialty of surveyed organizations to the total estimated universe of high technology organizations in Hawaii, using the weighting factor described previously.

The projected number of firms meeting the survey’s high technology definition is 719. This represents an increase of 14 percent over the projected estimate of 629 high tech firms in the 1998 High Tech Business Survey.

Employment and gross revenue estimates for high technology industries in Hawaii are shown in Table 2. Totals for the state are presented by industry category. Statewide estimates were derived by multiplying the average value for the firms in each category by the estimated number of high technology firms in each category.

Figures 1, 2, and 3 in this report present the projected number of Hawaii high tech firms in terms of industrial classifications. Figure 1 shows high tech organizations in terms of the major groupings of our classification scheme.[4] Figure 2 presents high tech organizations grouped with more detail provided for information technology and telecommunications.[5] Figure 3 classifies high tech firms into groupings used in the 1998 High Tech Business Survey.[6] Figures 4 and 5 present statewide employment and revenue estimates by industry category from Table 3.

Figure 6 and 7 show estimates of the total number of Hawaii high technology organizations and the total gross revenue of the Hawaii high technology industry projected to the year 2002. To derive these estimates, revenue figures for the years 1990, 1993, and 1998[7] were first converted to 2000 dollars using the Consumer Price Index for Honolulu.[8] Values for 1990, 1993, 1998, and 2000 were used to develop linear regression equations featuring the year as the independent variable and total number of firms or total revenue as the dependent variable. These equations were used to develop estimates for the number of high technology organizations and their total revenue for the year 2002.

The Department of Business, Economic Development, and Tourism added a question series to the 2001 High Tech Business Survey to determine what assistance organizations would like to receive to stay competitive or export to out-of-state markets. Organizations were asked to rate each of the following items as greatly needed, needed, unsure, not needed, or not needed at all.

The answers for the sample of 247 high tech organizations responding to the 2001 High Tech Business Survey are presented in Table 8.

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[1] NAICS is a successor to the Standard Industrial Classification (SIC) coding system used in previous years. NAICS provides a more detailed classification scheme for emerging and growing industry sectors such as computer systems and software and telecommunications.

[2] One of these firms was added later. The original sample consisted of 681 organizations.

[3] As part of the contract with HTDC, a survey of firms was being conducted for the Energy Division of DBEDT using the same questionnaire and methodology. A total of 758 firms were involved. Some of these were classifiable as high technology and thus eligible to be included in the analysis of high tech firms for HTDC.

[4] Reclassification according to the questionnaire’s two digit code: 1-16 = 1; 17, 18 = 2; 19 = 3; 20-23 = 4; 24, 25, 27 = 5; 28 = 6; 29 = 7.

[5] Reclassification according to the questionnaire’s two digit code: 1, 2, 3 = 1; 4-8 = 2; 9, 12, 13 = 3; 10, 11 = 4; 14, 15, 16 = 5; 17, 18 = 6; 19 = 7; 20-23 = 8; 24, 25, 27 = 9; 28 = 10; 29 = 11.

[6] Reclassification according to the questionnaire’s two digit code: 9, 23 = 1; 4-8, 22 = 2; 1, 2, 3, 10-16, 20, 21, 29 = 3; 17, 18, 19, 24, 25, 27, 28 = 4. In addition, the names and descriptions of 53 potential engineering and manufacturing firms were inspected individually to determine which 1998 industry classification to give them.

[7]From Final Report, High Technology Development Corporation, 1998 High Tech Business Survey, August 1999.

[8] There was a one percent increase for Honolulu between 1998 and 1999 according to Table 14.02, 1999 Hawaii State Data Book. A similar one percent increase was assumed between 1999 and 2000.

PURPOSE AND METHOD

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