Massachusetts, Washington Top Kauffman Foundation’s List of “New Economy” States

In a report released Tuesday, the Information Technology and Innovation Foundation (ITIF) and the Ewing Marion Kauffman Foundation named Massachusetts the nation’s leading state when it comes to the structural economic factors that make the state’s businesses competitive in the “New Economy”—defined as global, entrepreneurial, knowledge-based, rooted in information technologies, and innovation-driven.

Massachusetts hung onto its #1 ranking from the foundations’ 2007 report, with a score of 97 on an index aggregating some 29 measures, from the educational attainment of the workforce to the quantity of exports, the amount of job churn, the penetration of broadband Internet access, venture capital activity, and the number of patents issued to local inventors.

Washington state, meanwhile, climbed from the number-four spot in 2007 to the second-place spot in this year’s report, with a score of 81.9. Maryland (80), Delaware (79.3), and New Jersey (77) were close behind.

The top-ranked states, according to an announcement from the Kauffman foundation, are rich in “knowledge jobs” requiring at least a two-year degree. They all show above-average levels of entrepreneurship, have large numbers of citizens who use the Internet, and benefit from large numbers of skilled immigrants, both from other states and from other countries.

Massachusetts’ New England neighbors Connecticut, Rhode Island, New Hampshire, and Vermont fared well in the rankings, placing 6th, 11th, 13th, and 19th, respectively. Washington’s neighbor Oregon came in 15th. The five lowest-ranking states were, in reverse order, Mississippi, West Virgina, Arkansas, Alabama, and Wyoming.

“To succeed in the New Economy, states face a new imperative to boost the competitiveness of their economies—not just relative to each other, but to other nations,” Robert Atkinson, president of ITIF and primary author of the report, said in the announcement. “If they are going to meet the economic challenges of the future, states will need to overhaul their familiar approaches to economic development.”

Of course, having picked Boston as our first home city and Seattle as our second, we here at Xconomy could have predicted the study’s results. But California, home to our third bureau in San Diego, may have some catching up to do. It dropped from 5th place in the 2007 report to 8th place this year, with a score of 75.

Here’s the complete rundown:


State2008 RankScore*2007 Rank
Massachusetts1971
Washington2824
Maryland3803
Delaware4797
New Jersey4772
Connecticut6766
Virginia7768
California8755
New York97410
Colorado10709
Rhode Island116815
Utah126812
New Hampshire136813
Minnesota146611
Oregon156417
Illinois166316
Michigan176219
Texas186214
Vermont196020
Arizona206022
Georgia216018
Pennsylvania225921
Florida235823
North Carolina245726
Nevada255727
Idaho265624
Nebraska275528
Maine285432
New Mexico295333
Ohio305329
Kansas315334
Alaska325125
Wisconsin335130
South Carolina344939
Hawaii354841
Indiana364731
Missouri374735
Tennesee384731
North Dakota394737
Montana404642
Louisiana414544
Iowa424538
Oklahoma434340
South Dakota444348
Kentucky454145
Wyoming464043
Alabama473746
Arkansas483547
West Virginia493250
Mississippi503049

* Rounded to nearest integer.

Wade Roush is the producer and host of the podcast Soonish and a contributing editor at Xconomy. Follow @soonishpodcast

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