New index uses 105 metrics to determine state knowledge economies
Los Angeles – Nov. 12, 2020 – Massachusetts ranks No. 1 in the 2020 Milken Institute State Technology and Science Index. The biennial assessment uses 105 metrics to determine each state’s science and technology capabilities relative to opportunities for job growth and wealth creation.
Colorado follows at No. 2, and California comes in at No. 3, moving up one spot compared to the Institute’s last ranking. The 2020 edition groups states into five tiers, with Maryland, Washington, and Utah rounding out the first tier, respectively.
For nearly two decades, the Milken Institute State Technology and Science Index has offered state governments and business leaders a vital template for evaluating their economic growth efforts over the long-term. This year, the index provides additional insight into challenges states are facing and which states are best equipped for an economic recovery post-pandemic.
“The pandemic has demonstrated both the strengths and fragility of the jobs and economies of American states,” said Kevin Klowden, report author and Executive Director of the Milken Institute Center for Regional Economics and the California Center. “The states positioned to grow in the post-COVID reality are those that have strong STEM workforces, that maintain and support universities that produce graduates to fill the jobs of the future, and that have the entrepreneurial environment to create those jobs.”
Key findings from the 2020 State Technology and Science Index include:
Massachusetts ranks No. 1 in the 2020 overall rankings, maintaining its top spot since 2002. The state has high levels of research and development funding, a booming biotech sector, a high concentration of computer and information science experts, and a well-funded higher education system.
Colorado is ranked No. 2, and California moved up one spot to No. 3. Colorado benefits from a large STEM workforce and entrepreneurial infrastructure. California’s strong venture capital sector, large number of patents, and increase in state appropriations for higher education contributed to the state’s ranking this year.
New Jersey and New Mexico had the largest gains. New Jersey moved up six spots from No. 20 to No. 14, largely as a result of its industry funding for research and development and its life sciences industry. As of last year, 13 of the top 20 pharmaceutical companies had a presence in New Jersey. New Mexico rose six spots from No. 24 to No. 18, largely due to its technology and science workforce and its concentration of high-tech industries.
The six states in Tier 1 remained the same, but other tiers changed in size. States in the middle of the rankings saw a variety of shifts in their scores, such as New Jersey, which moved up to the second tier; Montana and Missouri, which dropped into the fourth tier; and Maine, which dropped into the bottom tier.
“Movement in the rankings, particularly for states in the lower tiers, highlights the impact policy choices can have on economic growth, such as whether policy makers and business executives focus on an integrated approach to funding innovative research and helping new technologies reach the market,” added Klowden.
How We Rank States:
In calculating the overall index, the Milken Institute evaluated 105 metrics including government research and development funding, entrepreneurial activity such as patents and venture capital investment, and the proportion of each state’s workforce in high-tech industries. These metrics were spread across five sub-indexes that were then averaged into an overall ranking of the 50 states. The five sub-index rankings are: research & development; risk capital & entrepreneurial infrastructure; human capital investment; technology & science workforce; and technology concentration & dynamism, which measures high-tech industry growth. In order to limit volatility, the metrics use a three-year rolling average.
The 2020 Milken Institute State Tech and Science Index is co-authored by Kevin Klowden, Aaron Melaas, Charlotte Kesteven, and Sam Hanigan. The full report can be downloaded here.
OVERALL RANKINGS – TIER I
Research & Development
Risk Capital & Entrepreneurial Infrastructure
Human Capital Investment
Technology & Science Workforce
1. Maryland (tie)
1. Washington (tie)
Technology Concentration & Dynamism
Enxhi Myslymi, email@example.com, + 1 (203) 721-4840.
About the Milken Institute Center for Regional Economics and California Center
The Milken Institute Center for Regional Economics produces research, programs, and events designed to inform and activate innovative economic and policy solutions to drive job creation and industry expansion.
About the Milken Institute
The Milken Institute is a nonprofit, nonpartisan think tank that helps people build meaningful lives in which they can experience health and well-being, pursue effective education and gainful employment, and access the resources required to create ever-expanding opportunities for themselves and their broader communities. For more information, visit https://milkeninstitute.org/.