2012 ‘New Economy’ Ranking Highlights Innovation Leaders
WASHINGTON (December 11, 2012) – The 2012 State New Economy Index showcases the regions that are at the forefront of the nation’s movement toward a global, innovation-based New Economy. The index, produced by the Information Technology and Innovation Foundation (ITIF), ranks states on a series of indicators that analyze the environment for innovation and high-tech job growth.
The top five states in this year’s index are Massachusetts, Delaware, Washington, California and Maryland. Mississippi and West Virginia have lagged the most in making the transition to the New Economy. The other lowest-scoring states, in reverse order, are Arkansas, Oklahoma and Alabama.
The State New Economy Index uses 26 indicators in five categories to assess states’ fundamental capacity to transform their economies and incubate innovation. The categories are: knowledge jobs, globalization, economic dynamism, the digital economy and innovation capacity. The 2012 index builds on five earlier indexes, published in 1999, 2002, 2007, 2008 and 2010.
“More than three years on from the end of the Great Recession, only six states have regained employment levels enjoyed prior to the recession and 17 states are still more than 5 percent below their pre-recession employment levels,” says Luke Stewart an economic analyst at ITIF and co-author of the Index. “In addition, U.S. manufacturing employment has declined 33 percent between 2000 and 2011, exceeding the losses of the Great Depression. Much of this decline can be attributed to declining U.S. competitiveness resulting from our failure to adapt to the demands of the globalized New Economy.”
To address these impacts and enhance economic transformation, the authors argue that state strategies should focus on establishing policies that reduce within-state zero-sum competition, spur “win-win” economic results that benefit the local and national economy, and enhance state-federal innovation-based economic development partnerships.
“In today’s highly competitive environment states must work together and with the federal government to overhaul their economic development policies,” says Robert Atkinson, president of ITIF and co-author of the Index. “Too often, states still view their economic competitors as next door, rather than halfway around the world. If, instead, they used incentives to expand broadband, support entrepreneurial assistance programs, or invest in research and technology transfer, they – and the nation as a whole – would be far more globally competitive.”
To view the full report visit http://www.itif.org/publications/2012-state-new-economy-index