2 of 5
2. Oregon
Patents per million people: 14.4

What makes Oregon so inventive? Its reputation as a cool place for the young, hip and smart certainly helps. Highly educated young people "are attracted by what they perceive to be the lifestyle and culture of the community," said David Chen, chairman of the Oregon Innovation Council, a state business development group. "They contribute to...a creative and innovation-based economy."

The state's natural resources and strong high-tech sector also play a role. The offices of giants like Intel and Hewlett-Packard bring thousands of tech-minded folks to the state. No wonder Oregon generates so many patents in areas like nanotechnology, material sciences, sustainable and natural products, medicine, biology, and advanced adhesives.

In the early part of the decade, Oregon started encouraging its companies and universities to work together more closely, sharing equipment and cooperating to develop intellectual property. The move "really paid off" said Chen, allowing the state to gain critical mass as an innovator beyond its size.

NEXT: California
Source: Kauffman Foundation based on U.S. Patent and Trademark Office 2008 and 2009 data
Kauffman looked at independent inventor patents per million people of workforce age, 18-64
LAST UPDATE: Dec 23 2010 | 10:29 AM ET
8 great cities to start a business From mega tax breaks to innovative business incubators, these places offer compelling incentives to would-be entrepreneurs. More
10 fastest-growing statesHere are the 10 states with fastest growing populations for the past decade. You might be surprised by who is on the list. More
I started a business in paradise! From an event planner in Puerto Vallarta to the owner of a surfing school in Costa Rica, these folks launched businesses in their dream destinations. More