LOS ANGELES — Investments in science and technology — from higher education to industry research and development — are the decisive factors in creating a sustainable economic future, a new study from the Milken Institute finds. Despite the dot-com meltdown and the slowdown in the technology sector over the past three years, the study shows that high-tech is as critical as ever to economic growth.
A region′s economic prosperity is based upon its ability to attract and expand science and technology assets, then leverage them for economic development, the report states. The keys to success, the authors say, are a strong investment in science and technology infrastructure and leveraging those assets for economic development.
The report compares and contrasts Nebraska with its regional peers and its positions relative to national leaders using the Milken Institute′s Technology and Science Index. The index uses 77 indicators in five categories to measure how well a state will perform in today′s knowledge-based economy. The five composite categories are:
- Research and development inputs;
- Risk capital and entrepreneurial infrastructure;
- Human capital investment;
- Technology and science workforce; and
- Technology concentration and dynamism. Individual indicators include a wide range of measurements such as the percentage of a state′s population with Ph.D.s, research and development expenditures per capita, and venture capital investment.
"The engines that propel state and regional economies forward today are dramatically different from the engines of the past," the report says. "The old engines were the accumulation of physical assets...The new engine of regional economic prosperity is based upon science and technology assets."
Nebraska′s best rankings were in the Research and Development Composite Index (R&D), where it had strong positions in industry R&D, academic R&D, life sciences R&D and agriculture R&D, and in the Technology and Science Workforce Composite Index, ranking 11th nationally and 1st among the West North Central states. But Nebraska′s middle-of-the-road rankings in the remaining three indexes place the state almost dead-center nationally.
"Focus must be placed on improving commercialization rates out of universities and adjusting the rewards to encourage entrepreneurial activities.... Nebraska′s technology and science workforce is an important asset that could be better leveraged in starting technology firms," the report concludes.
In conducting the research, Institute economists found a strong connection between science and technology investment and personal income gains, as well as overall state economic growth.
"More than three-fourths of personal income growth can be tied to increases in technology output. States succeeding in technology-based growth will push income per capita higher," says Ross DeVol, Director of Regional Economics for the Institute, and author of the report.
DeVol, who four years ago wrote America′s High-Tech Economy, a groundbreaking report on technology′s influence on metropolitan economies, says the new study points out the critical need for states to invest not only in science and technology, but also to make sure they leverage it.
Nebraska demonstrated exceptionally strong growth in venture capital funding, increasing at a rate of slightly more than 100 percent in the past year. "But you can′t just make investments," DeVol cautions. "You have to harness them into real companies with real innovations that can make money. That will foster stronger economic growth and higher-paying jobs."
View Nebraska's Position in Technology and Science.