Sat, June 21, 2008
Massachusetts Trounces the Golden State in High Tech (again)
On three occasions since 2002 the Santa Monica-based Milken Institute has ranked the states on the basis of how well they’re competing in the knowledge economy. For the third time in a row, Massachusetts ranks #1, while California slid from second to fourth place. Encouragingly, four of the top ten states are in New England.
The Institute issued its latest report, entitled “State Technology and Science Index: Enduring Lessons for the Intangible Economy” just yesterday. The rankings are based on several criteria, including the states’ ability to attract funding, the presence of entrepreneurial ability, venture capital, human technological capital, and the commitment of policy makers to technology. The report notes that although Massachusetts’ “lead has diminished somewhat, [it] remains the gold standard for other states to consider when evaluating their own technology and science capabilities.” Although the state was generally highly ranked, it scored particularly well for criteria that measure the level of cutting-edge research and development taking place.
One rather worrying part of the analysis is the criterion that measures technology outcomes, including employment in high technology, business formation, and growth. Massachusetts dropped from 3rd (in 2004) to 11th in this area, though this was not enough to keep it from dominating the overall ranking score. Although Massachusetts continues to rank #1 overall, the results suggest that the state needs to turn around its performance in business formation. According to massinsight.com, about 11% of the state’s economic output is in professional, scientific, and technical services, with another 10% in manufacturing, of which some is surely high-tech. High-technology businesses tend to create jobs that span a wide range of incomes. If Massachusetts loses its ability to compete with other states in technology, the effect would be felt widely. Being #1 is great, but it also means the state has nowhere to go but down.
Three other New England states were also ranked among the top ten in the Institute’s report. Connecticut moved up three slots to #7, New Hampshire similarly improved, moving from #12 to #9, and tiny Rhode Island slid into the #10 slot after ranking 11th in the 2004 Institute report. If these states continue to bolster their technological competitiveness, it bodes well for the overall strength of the region’s economy.
It would probably be indelicate of me to note that billionaire Michael Milken, founder of the Milken Institute, may still be best known for his 1990 conviction (along with Ivan Boesky) for various crimes including insider trading, so I won’t mention that. Not even in passing.
