LOS ANGELES — In Colorado, Gov. Bill Owens recently redirected $50 million in state funds to a new Colorado Venture Capital Authority to provide capital to businesses throughout the state.
In Maryland, Gov. Robert Erlich′s Commission on Development of Advanced Technology Businesses has created what is considered one of the most forward-looking roadmaps for technology-based economic development in the country.
In Michigan, Gov. Jennifer Granholm′s administration is offering zero percent loans to students in public universities who pursue engineering and technology degrees.
Throughout the United States, these and other state leaders have to come realize one fact that a new Milken Institute study makes clear: investments in a state′s science and technology assets — from higher education to access to venture capital — is a crucial factor in determining a region′s future economic success.
"Places that can attract, grow and retain firms and industries proficient at deploying information technology, in addition to producing it, will be at a competitive advantage," according to the report. "The degree to which a state′s knowledge assets are harnessed and converted into successful innovations, products and services determine its economic future."
According to the report, the states in the best position to succeed in the technology-led information age are:
7) New Jersey
The study, one of the most comprehensive examinations of state technology and science assets ever undertaken, finds that despite the downturn in the technology sector a couple of years ago, it remains one of the keys to economic development.
"The new engine of regional economic prosperity is based upon how successful that location is in attracting and expanding science and technology assets and leveraging them for economic development," the study says. "Science, technology and knowledge-driven innovation are critical to job and wealth creation."
Ross DeVol, Director of Regional Economics and the study′s principal author, says that while many people have given up on the technology industry because of the dot-com meltdown and high-tech slowdown a couple of years ago, his research shows that a region′s tech and science infrastructure is more important than ever — something that is not lost on the many of the country′s governors and legislators.
"From Alabama to South Dakota, state leaders understand the importance of this sector and are creating many new initiatives to improve their tech and science infrastructure," DeVol said. "There′s a real battle going on between the states, because they know how important it is."
This year′s findings are included in two separate reports:
- State Technology and Science Index: Enduring Lessons for the Intangible Economy, which examines the tech and science assets of all 50 states.
- California's Position in Technology and Science: A Comparative Benchmarking Assessment, which offers a much more detailed look at California′s position.
(Please note:The California version requires up to 10 mb of memory and may take some time to download.)
In the California report, the authors offer much good news about California′s technology position — its strong technology clusters, its venture-capital foundation and its excellent higher education system. But the study also contains a strong warning to policy leaders that others states are chipping away at its technology assets — and that steps must be taken to prevent further slippage.
"We must resolve the state budget crisis in a manner than does not restrict long-term investments in technology and science," says DeVol. "If we consume our seed capital to fill short-term holes in our budget, we will have committed an egregious error."
The authors found several developments that should concern the state′s policy makers, including:
- California′s ability to lure academic research and development dollars has declined.
- Business starts per capita are down, dropping the state from 6th in 2002 to 13th in the 2004 index.
- The percent of residents with a bachelor′s degree or higher is dropping.
Part of the reason for these declines is that other states are working hard to build their own technology and science infrastructure, and luring the scientists and engineers needed to propel them. Educating, keeping and attracting these workers is one of the keys to future economic success, the authors say.
But rather than "implementing innovative programs to improve enrollment in public universities," the state has cut freshman enrollment in U.C. and Cal State systems by more than 7,000 this fall — a development the authors called "short-sighted."
"California must continue to increase funding of science and technology in its university systems or risk losing one of its most important historical comparative advantages," the study says. "Other states have made this a top budgetary priority."
In this year′s index, the top 10 remained the same as they were in the Institute′s first study in 2002, except that California moved up to second and Colorado dropped to third, and Minnesota (8th) and Connecticut (10th) changed places this year.
The biggest jump in the ranking was Rhode Island, which moved up 10 places — from 21st in 2002 to 11th this year. Other big jumps came from Vermont (from 31st to 22nd), New Mexico (20th to 14th) and Tennessee (40th to 34th). Texas suffered the biggest drop — nine places, from 14th to 23rd.
Because researchers found a high correlation between each state′s position on the index and how well they do in technology-based economic development, the index offers states a benchmark to measure their progress. In addition, they found a strong relationship — more than 75 percent of the variations — between a state′s score on the index and per-capita income, a broad measure of economic well-being.
The states are ranked on 75 separate measurements in five categories: research and development, risk capital and entrepreneurial infrastructure; human capital investment, technology and science workforce, and technology concentration and dynamism.
NOTE: In addition to the two reports, the Institute has put together rankings for all 50 states for all 75 measurements that are available to the public as a separate purchase for $195. Those who would like to purchase these rankings may contact us at 310 570-4600, or by e-mail at email@example.com. News media interested in viewing these should contact Skip Rimer at (310) 570-4654, or firstname.lastname@example.org.