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Massachusetts Tops List of New Economy States

Mark Marich

Massachusetts is still the top state in the country when it comes to the new economy, according to the latest State New Economy Index from the Information Technology and Innovation Foundation. The report is the sixth in the series from ITIF with previous indexes published in 1999, 2002, 2007, 2008 and 2010. Massachusetts has claimed the top spot in each year.

Boasting a concentration of software, hardware, and biotech firms supported by world-class universities such as MIT and Harvard, Massachusetts survived the early 2000s downturn and was less hard hit than the nation as a whole during the Great Recession, at least in terms of job growth and per-capita income growth.

However, the Bay State’s sizable lead over other states has begun to narrow. Delaware jumped four spots since the 2010 Index, surpassing the state of Washington (which dropped one spot) for second place. Delaware’s ascent was “driven by big improvements in entrepreneurship levels, R&D investment, and movement toward a green economy.” California (4th) and Maryland (5th) round out the top five.

How did the “most entrepreneurial” states fare? Of the five states with the highest rates of entrepreneurial activity, only California (4th) and Colorado (7th) made the top ten for the overall Index. Arizona (16th), Georgia (18th) and Nevada (26th) were the others and each sustained high job losses during the latest recession.

The bottom five state are: Alabama (46th), Oklahoma (47th), Arkansas (48th), West Virginia (49th) and Mississippi (50th).

The biggest movers are Vermont—which jumped eight spots to 15th—and Rhode Island (23rd), Ohio (32nd) and Indiana (42nd)—which each fell seven spots from the 2010 Index.

The rankings are based on 26 indicators across five categories: knowledge jobs, globalization, economic dynamism, the digital economy and innovation capacity.

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