The 2007 State New Economy Index

Benchmarking economic TransformaTion in The sTaTes

THE 2007 STATE NEW ECONOMY INDEX

State-by-state analysis ranks how state economies are structured to compete regionally and globally
The 2007 State New Economy Index analyzes how state economies are transforming from the old industrial economic model based on “smokestack chasing” to an increasingly global-, knowledge-, and innovation-based New Economy. This study, published in February 2007, was funded by the Ewing Marion Kauffman Foundation and conducted by the Information Technology and Innovation Foundation in Washington D.C. The Index, which expands on two earlier reports issued in 1999 and 2002, uses 26 indicators from a variety of sources to rank each state on the extent to which its economy is knowledge-based, globalized, entrepreneurial, information technology-driven, and innovation-based. The most important driver of the New Economy, according to the Index, is the information technology revolution. Various industrial sectors, such as health care, education, transportation, government, real estate, and others are at the early stages of digital transformation, and as they transform, productivity promises to continue to grow. Key finding: Massachusetts, New Jersey, Maryland, Washington, and California top the state rankings in transitioning to the New Economy.

B EN CH MA RK ING E CO NO MIC T RA NS FO RM ATI ON I N T HE S TAT ES

Download this study: www.kauffman.org/neweconomy

Search for these related studies at www.kauffman.org:
• Kauffman Index of Entrepreneurial Activity • Entrepreneurship and Urban Success: Toward a Policy Consensus • State Strategies to Promote Angel Investment for Economic Growth
THE RANKINGS

INDICATORS OVERALL SCORES

Contact: Barbara Pruitt 816-932-1288 bpruitt@kauffman.org Kauffman Foundation
2007 2007 Rank Score

100th – 76th percentile 75th – 51st percentile 50th – 26th percentile 25th –1st percentile

State

1999 Rank

1999 Score

2002 Rank

2002 Score

Rank Change from 1999* 2002**

2007 2007 Rank Score

State

1999 Rank

1999 Score

2002 Rank

2002 Score

Rank Change from 1999* 2002**

www.kauffman.org

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

96.1 86.4 85.0 84.6 82.9 81.8 79.6 79.5 78.3 77.4 75.3 73.2 71.1 68.6 68.6

Massachusetts New Jersey Maryland Washington California Connecticut Delaware Virginia Colorado New York Minnesota Utah New Hampshire Texas Rhode Island

1 8 11 4 2 5 9 12 3 16 14 6 7 17 29

82.3 60.9 59.2 69.0 74.3 64.9 59.9 58.8 72.3 54.5 56.5 64.0 62.5 52.3 45.3

1 6 5 4 2 7 9 8 3 11 14 16 12 10 23

94.5 81.8 83.0 86.1 90.1 78.8 76.4 77.5 86.2 75.1 72.7 72.1 73.9 75.3 65.8

0 6 8 0 -3 -1 2 4 -6 6 3 -6 -6 3 14

0 4 2 0 -3 1 2 0 -6 1 3 4 -1 -4 8

26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

60.2 59.2 59.0 57.8 55.9 55.8 55.6 53.7 53.6 53.5 53.3 51.9 51.8 51.5 51.4

North Carolina Nevada Nebraska Ohio Wisconsin Indiana Maine New Mexico Kansas Missouri Tennessee North Dakota Iowa South Carolina Oklahoma

30 21 36 33 32 37 28 19 27 35 31 45 42 38 40

45.2 49.0 41.8 44.8 44.9 41.0 45.6 51.4 45.8 44.2 45.1 29.0 33.5 39.7 38.6

24 31 36 27 37 32 29 25 30 28 34 47 40 35 33

63.9 59.2 56.7 61.7 56.5 58.0 61.2 63.2 59.4 61.3 56.9 47.8 54.1 56.9 57.0

4 -2 -6 4 8 (over)8 4 -2 2 7 6 1 -4 -3 -14 -8 -7 -4 0 -7 -5 -2 8 10 4 2 -1 -4 0 -7

The 2007 State New Economy Index

Other findings:
• The New Economy has taken hold most strongly in the Northeast, Mid-Atlantic, Mountain West, and Pacific regions. • Of the 20 top-ranking states, 14 are in these regions. • States that have lagged the most in making the transition are Alabama, Arkansas, South Dakota, Mississippi, and West Virginia. • Of the 20 lowest-ranking states, 15 are in the Midwest, Great Plains, and Southern regions. • Massachusetts has held the top spot on the State Index issued in 1999, 2002, and 2007. • New Jersey and Maryland have made steady climbs with each Index, taking second and third place respectively in the 2007 rankings. • Wisconsin, Vermont, North Dakota, and Rhode Island made the greatest strides on the Index from 2002 and 2007. • Missouri, Maine, Oregon, Arizona, New Mexico, Oklahoma, and Hawaii recorded the biggest declines in the rankings during the past five years. • North Carolina and New Mexico ranked 26th and 33rd, respectively, despite the region around Research Triangle Park (Raleigh-Durham), which boasts top universities, a highly educated work force, cutting-edge technology companies, and global connections; and Albuquerque, which is home to leading national laboratories and an appealing quality of life.

Characteristics of top-ranking states:
• A high concentration of managers, professionals, and college-educated residents working in “knowledge jobs.” • Companies geared toward global markets. • Above-average levels of entrepreneurship. • At the forefront of the information technology and Internet revolutions. • Institutions and residents embrace the digital economy. • Infrastructure that fosters and supports technological innovation. • High levels of domestic and foreign immigration of highly mobile, highly skilled knowledge workers, seeking good employment opportunities and a good quality of life.

Characteristics of bottom-ranking states:
• Depend on natural resources or on mass production manufacturing. • Rely on low costs rather than innovative capacity to gain advantage.

v.101508

e w i n g m a r i o n k au f f m a n f o u n daT i o n 4 8 0 1 r o c k h i l l r o a d , k a n s a s c i T y, m i s s o u r i 6 4 1 1 0 T e l : 8 1 6 - 9 3 2 - 1 0 0 0 w w w. k a u f f m a n . o r g

Sign up to vote on this title
UsefulNot useful