Posted by: Richie Bernardo

Innovation is a principal driver of U.S. economic growth. In 2016, the U.S. spent an estimated $514 billion on research and development — more than any other country in the world — helping the nation rank No. 4 on the Global Innovation Index. According to the results of the ranking, knowledge and technology outputs are America’s particular strengths.

But certain states are due more credit than others for America’s dominance in the tech era. These states continue to foster innovation through investments in education, research and business creation, especially in highly specialized industries.

In order therefore to recognize the nation’s biggest contributors, WalletHub’s analysts compared the 50 states and the District of Columbia across 18 key indicators of innovation-friendliness. Our data set ranges from share of STEM professionals to R&D spending per capita to tech-company density. Read on for our findings, commentary from a panel of experts and a full description of our methodology.

1. Main Findings
2. Ask the Experts
3. Methodology

Main Findings Embed on your website<iframe src="//d2e70e9yced57e.cloudfront.net/wallethub/embed/31890/geochart-innovation.html" width="556" height="347" frameBorder="0" scrolling="no"></iframe> <div style="width:556px;font-size:12px;color:#888;">Source: <a href="http://ift.tt/2nULYB5;

 

Overall Rank	State	WalletHub State Innovation Index	‘Human Capital’ Rank	‘Innovation Environment’ Rank
1	District of Columbia	70.87	1	7
2	Maryland	69.82	2	1
3	Massachusetts	69.65	3	2
4	California	62.46	6	3
5	Colorado	59.33	7	5
6	Washington	57.44	5	8
7	Virginia	56.96	4	11
8	Utah	52.43	14	4
9	Connecticut	49.25	8	12
10	New Hampshire	48.43	19	6
11	Oregon	48.18	13	9
12	New Jersey	47.28	12	10
13	Delaware	46.16	9	17
14	Michigan	45.01	11	18
15	Texas	44.01	10	20
16	New York	42.77	22	14
17	Arizona	42.38	21	16
18	New Mexico	42.03	27	13
19	Florida	41.54	18	19
20	Minnesota	40.26	17	24
21	Georgia	39.88	23	22
22	Illinois	38.65	15	26
23	North Carolina	38.61	16	25
24	Rhode Island	37.95	20	28
25	Alaska	37.11	26	27
26	Pennsylvania	37.09	24	29
27	Wyoming	36.46	31	23
28	Vermont	36.04	25	32
29	Nevada	34.67	45	15
30	Ohio	34.59	28	35
31	Montana	34.51	38	21
32	Indiana	34.06	29	37
33	Wisconsin	32.98	30	42
34	Idaho	32.37	33	31
35	Nebraska	31.44	39	30
36	Alabama	31.19	32	40
37	Hawaii	30.94	34	36
38	Kansas	30.21	40	34
39	Missouri	29.88	42	33
40	Arkansas	29.25	35	44
41	South Carolina	28.29	36	47
42	Maine	27.74	37	48
43	South Dakota	27.12	46	38
44	Iowa	26.88	43	46
45	Tennessee	26.37	44	45
46	North Dakota	26.11	48	39
47	Oklahoma	25.97	47	43
48	Kentucky	25.79	41	49
49	Louisiana	21.49	49	50
50	Mississippi	21.30	51	41
51	West Virginia	20.05	50	51

 

Ask the Experts

To help struggling local economies emulate successful tech-centric cities, we turned to a panel of experts for advice on stimulating innovation. Click on the experts’ profiles to read their bios and thoughts on the following key questions:

1. How can state policymakers encourage and facilitate innovation?
2. What can policymakers do to assist those who may lose their jobs or otherwise be displaced by innovation across industries?
3. What skills best equip individuals to be competitive in a changing economic landscape?
4. In evaluating the best states for innovation, what are the top five indicators?

Methodology

In order to determine the most and least innovative states, WalletHub’s analysts compared the 50 states and the District of Columbia across two key dimensions, namely “Human Capital” and “Innovation Environment.”

We evaluated those dimensions using 18 relevant metrics, which are listed below with their corresponding weights. Each metric was graded on a 100-point scale, with a score of 100 representing the most favorable conditions for innovation.

We then calculated a State Innovation Index for each state and the District based on its weighted average across all metrics and used the resulting scores to construct our final ranking.

Human Capital – Total Points: 50

• Share of STEM Professionals: Full Weight (~8.33 Points)
• Share of Science & Engineering Graduates: Full Weight (~8.33 Points)Note:This metric measures the percentage of science- and engineering-degree holders aged 25 and older per total degree holders in the same age group.
• Projected STEM-Job Demand by 2020: Full Weight (~8.33 Points)Note: This metric measures the projected number of STEM jobs needed by 2020 per total jobs.
• Scientific-Knowledge Output: Full Weight (~8.33 Points)Note: This metric measures the number of peer-reviewed articles published per 1,000 science-, engineering- and health-doctorate holders.
• Eighth-Grade Math & Science Performance: Full Weight (~8.33 Points)
• AP Exam Participation: Full Weight (~8.33 Points)Note: This metric measures the percentage of public high-school students in the graduating class who completed one or more Advanced-Placement exams at any point in high school.

Innovation Environment – Total Points: 50

• Share of Technology Companies: Full Weight (~4.17 Points)Note: This metric measures the number of technology establishments per total establishments.
• R&D Spending per Capita: Full Weight (~4.17 Points)Note: “R&D” refers to research and development.
• R&D Intensity: Full Weight (~4.17 Points)Note: This metric measures the ratio of total research and development (R&D) performed to state gross domestic product (GDP).
• Utility (Invention) Patents per Capita: Full Weight (~4.17 Points)
• Entrepreneurial Activity: Full Weight (~4.17 Points)Note: This metric is based on data from the Kauffman Index of Startup Activity.
• Tax-Friendliness: Full Weight (~4.17 Points)Note: This metric is based on data from the Tax Foundation’s State Business Tax Climate Index.
• Industry-Cluster Strength: Full Weight (~4.17 Points)Note: This metric is based on data from the U.S. Cluster Mapping Project. “Industry-Cluster Strength” refers to the level of high employment specialization of a cluster, which is defined by the U.S. Cluster Mapping Project as a “regional concentration of related industries in a particular location.”
• Drone-Friendly Laws: Full Weight (~4.17 Points)
• Average Internet Speed: Full Weight (~4.17 Points)
• Share of Households with Internet Access: Full Weight (~4.17 Points)
• Venture-Capital Funding per Capita: Full Weight (~4.17 Points)
• Average Annual Federal Small-Business Funding per GDP: Full Weight (~4.17 Points)

 

Sources: Data used to create this ranking were collected from U.S. Census Bureau, Bureau of Labor Statistics, National Science Foundation, National Center for Education Statistics, Georgetown University’s Center on Education and the Workforce, United States Patent and Trademark Office, Ewing Marion Kauffman Foundation, Tax Foundation, Consumer Technology Association, Akamai Technologies, U.S. Cluster Mapping Project and National Venture Capital Association.

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