Economic growth doesn’t necessarily equal high levels of innovation and entrepreneurship. That’s one of The Atlantic’s takeaways from a new U.S. Chamber of Commerce report about enterprising states done by Praxis Strategy Group, an EMSI partner.
Derek Thompson of The Atlantic reviewed the Chamber’s report and pulled out the top 10 fastest-growing states (led by Alaska, the Dakotas, and Wyoming) and the top 10 best states for entrepreneurship and innovation (mostly Western states). EMSI Data was used for some of the data metrics, including STEM job growth and concentration and the share of high-tech establishments.
Top Growth Performers (following text from U.S. Chamber report):
1. Alaska—Alaska places in the top 10 in six of seven economic performance rankings, trailing only in
adjusted family income. Its rapid gross state product increase propelled it to the top spot in this year’s
rankings. The state has seen job growth in the past decade in every industry super-sector, and is home
to high-value energy and natural resources industries whose growth has fueled large gains in gross state
product and productivity. Since 2002, Alaska has added more than 6,600 jobs in oil and gas extraction,
metal ore mining, and related support activities, as well as another 3,800 in the seafood products industry
and 1,700 in new management, science, and technical consulting.
2. North Dakota—North Dakota is a top five state in short- and long-term job growth, GSP growth,
productivity growth, and per capita personal income growth. Alaska’s rapid ascension nudged North
Dakota from the No. 1 spot. The energy boom has created 15,000 jobs in the state in the last decade and
the state has added another 9,400 in business and financial services. North Dakota avoided the housing
market collapse, and its construction employment is up 29 percent since 2002. Its manufacturing sector has not seen the decline occurring in other states.
3. Wyoming—Wyoming moves up two spots this year to third. The state places first in four of our seven
performance measures: long term job growth, GSP growth, productivity growth, and per capita personal
income growth. But the state’s job losses in the last two years (more than just two other states) kept it from
the top two spots. Employment in the state’s energy cluster has grown by 47 percent since 2001, adding
nearly 19,000 jobs. The business and financial services cluster saw similar growth, adding 9,800 jobs for 46
4. South Dakota—South Dakota falls one spot to fourth in 2011, placing in the top 10 in job growth measures, GSP and productivity growth, and per capita personal income growth. South Dakota’s manufacturing industry (especially machinery manufacturing) has remained more stable than most states, while the construction industry added nearly 2,700 jobs since 2001. The state added nearly 5,300 professional and technical services jobs over the same period, led by computer systems design, programming, engineering services, and various other scientific and technical consulting services.
5. Maryland—Maryland is a center for high-end professional and technical services and 60,000
new jobs in that sector make it a strong all-around performer. It places fifth this year, down one spot from
2010. The state places in the top 15 in every measure, and fifth in median family income adjusted for cost
of living. Highly competitive clusters in Maryland include information technology, defense and security,
business and finance, and advanced materials.
6. Virginia—Virginia is strong in most performance measures, highlighted by tenth place in both
productivity and productivity growth. The influence of the nation’s capital is reflected in strong growth
since 2002 in business and finance (158,000 new jobs), defense and security (60,000), biomedical and
biotechnical (58,000), and information technology and telecommunications (25,000) clusters.
7. Oklahoma—Oklahoma moves into the top ten this year after placing 14th in 2010, most notably due to an
increase in gross state product. The state placed fourth in GSP growth and fourth in productivity growth.
It also enjoyed a sixth place ranking in per capita personal income. Like many states in this year’s top
ten, Oklahoma’s energy cluster saw huge growth in its energy cluster, which added 86,000 jobs for 60 percent growth since 2002. The state also benefits from a competitive advantage in other productive economy clusters, such as machinery manufacturing, forest and wood products, advanced materials, and chemical products.
8. Texas—Texas is the best performing large state in terms of job growth, ranking fourth in both long
term and short term employment growth, and also shows solid overall economic expansion (13th in GSP
growth and 14th in GSP per job). Since 2002 the state’s business and finance, energy, and biomedical/
biotechnical clusters have each expanded more than 30 percent, adding more than 960,000 jobs to the
Texas economy. Of the major industry sectors, only manufacturing and information have lost jobs since
2002 — yet manufacturing still outperformed the national manufacturing economy by a significant margin.
9. Nebraska—Nebraska keeps its position at number nine in economic performance this year. Nebraska
places in the top 25 in six of seven performance metrics, and is seventh in short term job growth. The
state has a healthy construction sector along with strong growth in transportation and warehousing
(4,400 jobs since 2002); professional, scientific and technical services (11,500); and management
of companies and enterprises (4,200). The state’s most nationally competitive industry clusters include
transportation and logistics, advanced materials, energy, printing and publishing, and chemical products.
10. Iowa—Iowa’s sixth-place ranking in productivity growth helped place it 10th this year, down two spots
from last year. The state shows balance across the board, with five more top 25 performance rankings
and no ranking lower than 33rd. Iowa remains a strong, productive economy. Its agribusiness, food
processing and technology cluster remain the largest cluster in the state, encompassing 190,000 jobs. While employment in this cluster remains essentially flat since 2002, it is significantly better than in the rest
of the nation, making agribusiness one of the state’s most competitive industries. Other important clusters
in the state include machinery manufacturing, which has gained 2,000 jobs since 2002, advanced materials,
computer and electronics manufacturing, defense and security, and transportation and logistics.
Top Entrepreneurship and Innovation States
1. New Mexico—New Mexico places no lower than 21st in any of our innovation and entrepreneurship
rankings. Home to Sandia and Los Alamos National Labs, the state is already a center for STEM jobs, and
its strength is increasing. The state ranks ninth in STEM job concentration, eighth in STEM job growth,
and tenth in entrepreneurial activity. The state is also home to the New Mexico Technology Ventures
Corporation, one of the longest running and most successful research commercialization enterprises.
2. Colorado—Colorado moves up seven places to second in innovation and entrepreneurship this year. The
Rocky Mountain state is first in small business loan activity, second in research and development (R&D)
activity, second in high-tech business concentration, third in entrepreneurship activity and fifth in STEM
3. Utah—Utah’s top ranking in net business birth rate helps it move up five places to third in innovation and
entrepreneurship this year. The state ranks no worse than 18th in any metric and is sixth in small business
lending activity, ninth in STEM job concentration and ninth in high-tech business concentration. Utah is
making investments in research commercialization infrastructure with its Utah Science, Technology and
Research Initiative and offers an outreach and business assistance program for technology companies.
4. Montana—Montana ranks seventh or better in five innovation and entrepreneurship measures including
STEM job growth (fourth), business birth rate (sixth), R&D intensity (seventh), entrepreneurship
activity (second), and small business lending activity (fifth). Since 2002, the state has added 3,200 STEM
jobs to its economy, led by growth in engineering services, computer systems design, custom computer
programming, and energy industries.
5. Texas—While Texas is known for its energy industry, it is a strong performer in innovation and
entrepreneurship, ranking 16th or better in every category but research intensity. The Lone Star State
moved up twelve places over last year’s ranking, due in part to its increase in entrepreneurial activity and
above average rankings in small business lending and business birth rate.
6. Arizona—Arizona is a top 25 performer in each innovation and entrepreneurship metric, landing in
the top ten in R&D intensity, business birth rate, entrepreneurial activity and small business lending.
7. Maryland—Maryland remains a center for STEM jobs and high technology companies, ranking tenth
in STEM job growth, second in STEM job intensity, and third in high-tech business concentration. The
state is also a national leader in biotech product manufacturing, biotechnology and general scientific
R&D, guidance instruments, and computer systems design.
8. Virginia—Virginia has the highest concentration of high-tech businesses in the nation and holds the third
highest concentration of STEM jobs. Since 2002, the state has added more than 43,000 high-tech jobs, led
by 46,000 jobs in computer systems design services; 9,100 in physical, engineering, and life sciences
research; 8,100 in engineering services; and 7,900 in other scientific and technical consulting services.
9. Idaho—Home to the Idaho National Laboratory, Idaho moves up three spots to make the top 10 in innovation and entrepreneurship this year, led by second place rankings in establishment birth rate and small business lending and a 10th place ranking in entrepreneurial activity.
10 (tied). California—California remains the nation’s center for research, ranking number one in federal and academic research intensity. To help harness this innovative spirit, the Golden State launched the Innovation Hub (iHub) initiative to stimulate partnerships, economic development, and job creation around specific regional research clusters. These six new iHubs link and leverage assets such as research parks, technology incubators, universities, and federal laboratories to provide an innovation platform for startup companies, economic development organizations, business groups, and venture capitalists.
10 (tied). Washington—Innovation and technology-based economic development efforts are a central part of Washington’s job creation agenda. The state’s high technology business and occupation tax credit is
available to businesses in the advanced computing, advanced materials, biotech, electronic device, and
environmental tech industries that conduct research and development (R&D) activities in the state. Companies in the same industry set also have access to a sales and use tax deferral program for qualified R&D and initial manufacturing activity expenses. Biotech and medical devices companies also receive sales and use tax breaks on qualified equipment purchases used in expansion and job creation.
See here for the Chamber’s rankings for the fastest-growing states for middle-skill jobs and STEM jobs.