Connecticut Maintains High Technology, Innovation Ranking
Connecticut continues to rank among the top 10 states in the country in terms of how technology and innovation drive its economy.
The Information Technology and Innovation Fund’s 2017 State New Economy Index ranked Connecticut 10th, with an overall score of 76.4.
The report’s authors noted that due to changes in their methodology, they could not say for certain whether the change in Connecticut’s ranking is due to economic conditions.
The ranking is a key measure in determining economic competitiveness among the 50 states.
Connecticut’s ranking will help the state’s efforts to market itself to technology employers and attract workers, according to Connecticut Bioscience Growth Council chair Paul Pescatello.
Workforce, R&D Drive Ranking
The state’s strong showing is based on its highly educated workforce (fourth place), research and development (fifth place), manufacturing value added (sixth), and scientists and engineers as a percentage of the workforce (10th).
“Connecticut rounds out the top 10 by excelling in traded services, employing a highly educated workforce, and receiving high levels of foreign direct investment and R&D,” the report said.
With Massachusetts ranked first and Connecticut 10th, the other states rounding out the top 10 in order are: California, Washington, Virginia, Delaware, Maryland, Colorado, New Jersey, and Utah.
“In general, these top 10 New Economy states have more in common than just high-tech firms,” the report said.
“They also tend to have a high concentration of managers, professionals, and technical jobs, tend to attract college-educated residents working in ‘knowledge jobs,’ (jobs that require at least a two-year degree), have thriving traded service industries that pay well, and are home to firms that experience immense growth.”
As good as some numbers are, many of report’s most important rankings provide a wake-up call for Connecticut policymakers, Pescatello said.
He pointed to the business churning category, which measures new business dynamism and job creation.
“Connecticut ranks last, whereas California, the state ranked number two overall, ranks first in business churning,” Pescatello said.
“Massachusetts, the state ranked number one overall, ranks 15th in business churning.”
These rankings portray a state with much potential, but one that needs to do more work to attract entrepreneurs, start-up companies, and innovation.
As to where the country's fastest growing firms call home, Massachusetts ranks fourth while Connecticut is 26th.
"A significant indicator of innovation is health information technology and therefore it is surprising that Connecticut, with its deeply rooted cluster of health insurers, ranks 45th while Massachusetts ranks fourth," Pescatello said.
"These rankings portray a state with much potential, with many of the key ingredients for a robust 21st century economy, but one that needs to do more work to nurture the attributes that attract entrepreneurs, start-up companies, and innovation."
Massachusetts Ranks First
Once again, Massachusetts is at the top of the list with an overall score of 96.6.
"There are several reasons Massachusetts continues to be the state whose economic structure best matches the realities of the New Economy," the report said.
"Boasting a concentration of software, hardware, and biotech firms that are supported by world-class universities such as MIT and Harvard, Massachusetts survived the economic downturn of the early 2000s and later was less affected than the nation as a whole during the Great Recession in terms of its job growth and per-capita income growth.
"Its high standard of living may also contribute to its ability to attract scientists, engineers, and other skilled migrants in high-wage high-tech jobs."
With few exceptions, companies in the top 10 states tend to be more geared toward global markets, both in terms of export orientation and the amount of foreign direct investment, the report said.
Embracing the Digital Economy
Almost all are at the forefront of the information technology revolution, with a large share of their institutions and residents embracing the digital economy.
Most have a solid innovation infrastructure that encourages and supports technological innovation.
And many attract high levels of domestic and foreign immigration of highly mobile, highly skilled knowledge workers seeking good employment opportunities and a better quality of life.
The worst 10 states, from the bottom up, are: Mississippi, Arkansas, West Virginia, Wyoming, Louisiana, Oklahoma, Alabama, Montana, Alaska, and South Dakota.
"Historically, the economies of many of these states have depended on natural resources, tourism, or mass production manufacturing; low costs of doing business rather than innovative capacity was the source of competitive advantage," the report noted.
"In the New Economy, however, innovative capacity (derived through universities, R&D investments, scientists and engineers, highly skilled workers, and entrepreneurial capabilities) is increasingly the driver of competitive success, while states only offering low costs are being undercut by cheaper producers abroad."
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