ITIF Releases 2014 State New Economy Index
11 Jun, 2014
The 2014 State New Economy Index measures how states and regions are performing in the new economy, which is marked by globalization, technological innovation and entrepreneurial development, replacing the capital-intensive, traditional manufacturing environment that dominated state economies in the second half of the 20th century.
The index also offers policy reforms which can spur innovation-based economic growth. The index, produced by the Information Technology and Innovation Foundation (ITIF), ranks states on a series of measures that analyze the economic environment for success in the 21st century.
The index uses 25 indicators in five categories to assess states’ fundamental capacity to transform their economies and incubate innovation. The categories are: knowledge jobs, globalization, economic dynamism, the digital economy and innovation capacity.
The top five states in this year’s index are Massachusetts, Delaware, California, Washington and Maryland. The lowest scoring states in the ranking are Mississippi, West Virginia, Oklahoma, Arkansas and Louisiana.
“States have traditionally sought to spur economic development by keeping costs low and providing incentive packages to individual firms to lure them to their borders,” says Rob Atkinson, president ITIF and co-author of the index. “However, in the global, innovation-based economy, states would be better off keeping quality high and working to support in-state entrepreneurship and existing firm expansion.”
To succeed in the new economy, policymakers should work to put in place the best environment for attracting and retaining high-skilled knowledge workers, helping firms access technology from universities and national laboratories, investing in high-quality education systems and infrastructure, supporting a dynamic start-up ecosystem, and ensuring that the tax code supports innovative activities like R&D.
Illustration by hyena reality at Free Digital Photos.net
Source: ITIF press materials