The Market Systems Development Initiative (MSDI) seeks to increase Hawaiʻi County’s collective capacity to build competitiveness and sustainability in its local economy. The initiative is based upon an approach and set of guiding principles now used in over 60 countries worldwide to reduce poverty by leveraging the full potential of markets. The term market systems refers to the lens through which we seek to understand the ecosystem surrounding economic clusters in Hawaiʻi County. A market systems development approach is the set of guiding principles we use for facilitating improvements in market performance that benefit underserved and socially disadvantaged populations within those clusters.

The purpose of the MSDI is to strengthen Hawaiʻi County’s capacity for joint public-private economic analysis and action. It seeks to leverage the full potential of market driven growth to increase employment, income and resiliency in the county. The initiative is focused on building market system capabilities over a five-year period through six separate but interrelated projects:

See Project Details

See Project Details

Public-Private Partnership
and Action

The MSDI's efforts towards public-private partnership and action are primarily dedicated to the development and growth of the Hawai'i Island Agriculture Partnership (HIAP). HIAP represents a public-private initiative aimed at revitalizing and transforming Hawai'i Island's agricultural economy. With a focus on fostering collaborative efforts, HIAP is dedicated to creating a sustainable, inclusive, and self-sufficient agriculture system that supports the island's many small farms and ensures food security for its residents. HIAP represents more than 120 agribusinesses, organizations, farmers, government agencies, UH organizations and nonprofits on Hawai'i Island seeking to work together on those areas where we all share common goals to improve our agriculture and food systems. This kind of multi-stakeholder collaboration is vital for several reasons:

• Innovation and Resource Sharing: Combining public resources and policies with private sector innovation and efficiency will drive the development of new technologies, practices, and business models that are essential for transforming our agriculture system.
• Scalability and Impact: Collaborative efforts can scale up the island’s most successful agricultural initiatives, making them more impactful and sustainable over the long term.
• Policy and Regulatory Support: Government, business, and nonprofit stakeholders working to shape policies and regulations through shared analysis, dialogue, and collaboration.

HIAP's mission is to enhance Hawai'i Island's agricultural sector through system change. It seeks to do this by facilitating value chain development, market expansion, and workforce development. By leveraging collective action and connecting interests and efforts, HIAP aims to create a resilient agricultural ecosystem that can support economic growth, community well-being, and environmental sustainability.

HIAP’s members envision an agricultural sector that is an engine of economic growth, characterized by a diverse array of productive, sustainable farms that generates job growth and improved food security through fostering innovation and collaboration across all stakeholders. More information about HIAP's membership, initiatives and data can be found on its website by clicking on the image below.

GO TO HIAP WEBSITE

The Hawai'i Island Clusters of Opportunity (HICO) Project, underpinned by real-time, reliable data, aims to engage vested community leaders in building a more equitable, sustainable economy for all of Hawai’i Island. Following a nationally tested process developed by Collaborative Economics and Next Generation Sector Partnerships, it leverages economic cluster data to foster industry-led growth strategies, emphasizing collaboration across talent development, infrastructure, and innovation to ensure required investment and boost competitiveness. The project’s initial focal point was a two-plus year investment in outreach to more fully understand current circumstances, secure funding partners to develop critically needed data, and organize a leadership summit to drive actionable opportunities for growth that would ensure a more equitable, sustainable economy.

Data from the Your Economy Time Series (YTS) database with D&B grounding, preliminarily vetted for accuracy and relevance, forms the foundation of HICO's analytical efforts. This innovative – complex - data has identified four key Clusters of Opportunity within Hawaii Island’s economy.

The identified clusters - Knowledge & Technology, Diversified Healthcare, Hospitality & Experience, and Agriculture & Food - encapsulate 42% of the island's employment, with notable job growth trends. The positive growth sectors of the four Clusters of Opportunity represent 76% of the island’s job growth over the past decade. The bubble chart analysis within the report offers a visual review of these trends, capturing job growth, industry concentration and total employment in ways that enable an easier comparison of key growth segments within the Clusters of Opportunity.

Using this cluster analysis and Collaborative Economics expertise, action teams are being convened to further examine the opportunities and requirements they jointly identified within and across sectors by 20+ Hawai’i County business leaders in a summit held in Waimea at the Keck Observatory Conference room on December 4, 2023. These business leaders have committed to working together to further finalize specific strategic, implement commitments, and identify measurable outcomes for each of the four economic clusters.

HICO's approach combines detailed analytics with community-driven action, positioning Hawai'i Island to harness its strengths for sustainable economic growth. The project's vision extends beyond immediate gains, advocating for a synergy between business leaders, public policy and non-profits to cultivate an enabling environment for greater equity and future prosperity.

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READ THE REPORT

Market Systems Facilitation

This training program uses an applied learning approach to introduce market systems development to a cohort of experienced professionals working in support roles in Hawaiʻi’s agriculture and food cluster. The training teaches the concepts and guiding principles of a market systems approach to the cohort, helps them to map the data of the island's agricultural market ecosystem and guides them in putting these concepts into practice. The participants work in teams to analyze high potential agricultural value chains, identifying systemic constraints to growth within those value chains and recommending potential pilot projects for overcoming those constraints to improve growth opportunities for those who need them most.

The training objectives and intended outcomes of the training are outlined in the table below.

Training participants use the system map below to organize and categorize data, problems and initiatives within the agricultural market system. The map is also used as a lens for analyzing individual market segments in a consistent and systematic manner.

Map of Hawai'i Island's Agricultural Market Eco-system

Value Chain Analysis

This project applies value chain analysis to Hawaiʻi Island’s agriculture cluster to help improve efficiency, quality, and profitability for those sectors with a high potential for inclusive growth. Value chain analysis provides a comprehensive approach to understanding problems within targeted segments of the agricultural cluster. It encourages looking at the entire value chain of a specific category of products to identify the root causes of problems holding back growth. By addressing root causes, rather than symptoms, this analysis helps to develop sustainable solutions for producers.

The process starts with identifying key actors and activities, such as farmers, processors, distributors, retailers, and consumers. It then looks at key functions within the value chain including production, processing, packaging, transportation, and marketing, assessing the value added at each stage.

By working together with stakeholders across the value chain, the teams develop a comprehensive understanding of the challenges and opportunities within these value chains and identify solutions that address the underlying system. The value chain analysis is carried out jointly with representatives from producer associations, subject matter experts and other industry stakeholders. The MSDI Project Team provides guidance to the cohort of market systems facilitators in gathering and analyzing data, participating in stakeholder meetings to develop a detailed understanding of problems, understand their root causes, and identify opportunities for improvement. The analysis will focus on three separate value chains:

• Staple food crops – the fruits, vegetables, meat and dairy products that comprise the majority of Hawaiʻi Island’s staple food diets.
• Export crops – key agricultural crops exported from Hawaiʻi island including coffee, macadamia nuts, papaya, flowers and nursery products, and aquaculture.
• Agribusiness services – the operational, technical, training and business services that small farms need to sustain and improve their economic viability.

Deliverables from this project involve the production of three detailed value chain reports covering each of the above value chains along with recommended proposals for pilot projects designed to test potential solutions to overcoming systemic constraints to growth in the value chains.

Through the value chain analysis, the project partners hope to facilitate connections and strategic alignment among stakeholders seeking to improve and expand Hawaii's agricultural economy. By identifying systemic constraints, MSDI aims to support small farm/agribusinesses, create more inclusive and sustainable agricultural market systems, and contribute to Hawaii's food resiliency.

READ THE VALUE CHAIN ANALYSIS PLANNING REPORT

Value Chain Pilot Projects

Upon the completion of the value chain analysis and identification of potential intervention strategies for the island's agricultural value chains, the MSDI Project Team will work with the facilitators and industry groups to test interventions through individual pilot projects.

Conducting shared pilot projects with industry partners offers significant value and potential for overcoming key constraints identified in Hawaii's agricultural value chains. These collaborative efforts provide a real-world testing ground for innovative solutions, allowing industry partners to evaluate the effectiveness and feasibility of proposed interventions before scaling them up. By engaging in pilot projects, partners can pool resources, share risks, and leverage diverse expertise, fostering a collaborative environment where ideas can be tested and refined.

The value chain pilot projects will facilitate the collection of empirical data and insights into proposed solutions to systemic problems, helping to validate theoretical models and assumptions from the value chain analysis. They enable stakeholders to identify practical challenges and opportunities that may not be evident in a purely analytical context. Additionally, these projects can showcase successful strategies and technologies, serving as proof-of-concept demonstrations that can attract further investment and support from both public and private sectors.

By conducting these pilot projects, the Market Systems Development Initiative aims to create scalable, market-driven solutions that address systemic constraints in Hawaii's agricultural value chains. These projects will provide valuable lessons and best practices that can be disseminated across the island, ultimately contributing to a more resilient, competitive, and sustainable agricultural sector.

Market Analysis and Development

The Market Analysis and Development project is a strategic initiative under the Hawaii Island Agriculture Partnership (HIAP) aimed at identifying and leveraging Hawaii Island’s comparative and competitive market advantages. This project is critical for fostering the inclusive growth of the island's agricultural economy and enhancing food resilience by strengthening agri-food value chains from production to consumption.

The primary goal of this project is to analyze the demand for new value-added agricultural and food products and develop a shared marketing strategy that can drive economic growth and sustainability. By conducting thorough market analysis, the project seeks to understand local and external consumer preferences, identify high-potential products, and create targeted marketing campaigns that promote these products effectively.

The project’s market analysis will focus on identifying products and value chains with strong growth potential. By better understanding market trends and consumer demands, efforts to increase productive capacity and value-added processing capabilities can be more effectively matched with growing market demand. This alignment will not only boost local sales but also enhance the competitiveness of Hawai'i Island's agricultural products in broader markets, including the rest of Hawai'i, the US mainland, and overseas.

Leveraging the Hawai'i brand is a key component of the project. The island's unique geographical and cultural identity offers a significant marketing advantage. By promoting locally made products that embody the essence of Hawai'i, the project aims to increase local consumer preferences and expand market reach. Collaborative marketing efforts will highlight the quality, sustainability, and cultural significance of the island’s agricultural products, creating a strong brand presence that resonates with consumers both locally and internationally.

The project will involve the collaboration of various stakeholders, including farmers, producers, marketers, and government entities, to develop and implement effective marketing strategies. This collaborative approach will ensure that marketing efforts are comprehensive, data-driven, well-coordinated, and impactful. By targeting specific products and value chains with high growth potential, the project aims to create a ripple effect that benefits the entire agriculture and food cluster in the state.

Expected Project Outcomes

Increased local consumer preference for Hawai'i Island's agricultural products.
Expanded market reach and brand recognition for local products in local, US, and international markets.
Improved alignment between production capacity and market demand, leading to sustainable growth and inclusive opportunities for farms of all sizes..
Enhanced economic resilience and food security through strengthened agri-food value chains.