Massachusetts: Best 'New Economy' state

A study ranking state economies correlates entrepreneurship with adaptability - even during the toughest times.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)

Which should be the Obama administration's priority?
  • Stimulating the economy
  • Reducing the budget deficit

(CNNMoney.com) -- Massachusetts is the state best positioned for growth when the current economic turmoil recedes, according to the 2008 State New Economy Index released Tuesday.

Washington, Maryland, Delaware, New Jersey, Connecticut, Virginia, California, New York and Colorado rounded out the top ten.

The study, issued by the nonpartisan think tank Information Technology & Innovation Foundation (ITIF),measures how effectively states operate in order to compete nationally and globally. It notes that states should be focused on whether their economies are well positioned for robust growth in the next decade, pointing out that innovation is central to state economic success.

"We had to go back a full year to get data, but I do think these results will, to some extent, be able to predict how each state will do in the current economic turmoil," said Dr. Rob Atkinson, president of the foundation.

"In recessions, there are higher levels of entrepreneurship because people who are laid off will use that opportunity to start a business," he said. "We won't be in this predicament forever. States that foster risk-taking and treat this time as an opportunity will be in a better position when they emerge - they'll be growing, instead of replacing the investments they slashed."

Funded by entrepreneurship boosters the Ewing Marion Kauffman Foundation, ITIF considers 29 factors in determining which states are the most - and least - "New Economy." These indicators included, among other things, start-up activity, education, venture capital investment, IPOs, patents and alternative-energy.

Those data points were then grouped into five meta categories that the ITIF says embodies the New Economy: knowledge jobs, globalization, transformation into a digital economy, technological innovation capacity and economic dynamism.

"The index is a composite of variables," said Atkinson. "But economic dynamism, which measures factors such as the number of fast-growing gazelle companies and value of IPOs, is more important than, say, globalization or a digital economy at influencing the new economy leadership."

Based on past observation, states that foster startups, particularly fast-track tech ventures, are also those that adapt best in economic downturns and emerge from them with higher standards of living, according to the the survey, which was also released in 1999, 2002 and 2007.

Utah, Massachusetts, Colorado, Georgia and New York placed at the top of the ITIF's list in the economic dynamism category, while Alabama, West Virginia, Hawaii, South Carolina and Kentucky ranked lowest.

Mississippi, West Virginia, Arkansas, Alabama, Wyoming, Kentucky, South Dakota, Oklahoma, Iowa and Louisiana were seen by the foundation as the least prepared to rejuvinate themselves. To top of page

To write a note to the editor about this article, click here.




QMy dream is to launch my own business someday. Now that it's time to choose a major, I'm debating if I should major in entrepreneurial studies or major in engineering to acquire a set of skills first. Is majoring in entrepreneurship a good choice? More
Get Answer
- Spate, Orange, Calif.

More Galleries
These 10 food trends could dominate 2015 So long, kale. Here's what's expected to shake up the food industry next year. More
Beyond Russia: Geopolitical hot spots in 2015 Investors beware: These 5 global crises are likely to rattle the stock market and world economy. More
These 20 antique guns could fetch big bucks Morphy Auctions in Pennsylvania is putting nearly 1,000 old guns on the block. Here are just a few. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.