U.S. States Ranked by Readiness for Global Economy

Five states—Massachusetts, Washington, Maryland, Delaware and New Jersey—are leading the United States’ transformation into a global, entrepreneurial and knowledge- and innovation-based New Economy, according to The 2008 State New Economy Index, released today by the Ewing Marion Kauffman Foundation and the Information Technology and Innovation Foundation (ITIF). The report is being released during Global Entrepreneurship Week, an initiative to inspire young people around the world to embrace imagination, innovation and creativity.

“Global Entrepreneurship Week celebrates the New Economy attributes that are measured in this report,” said Robert Litan, vice president of Research & Policy at the Kauffman Foundation. “The New Economy is creating profound, irreversible changes in the U.S. economic structure at a pace we would not have imagined even a decade ago. Innovators in the United States—and worldwide—are increasingly investing in resources to compete based on this new reality.”

Mississippi and West Virginia ranked lowest among the states in making the transition to the New Economy. The other lowest-scoring states include, in reverse order, Arkansas, Alabama and Wyoming.

Regionally, the New Economy has taken the strongest hold in the Northeast, mid-Atlantic, Mountain West and Pacific regions; 14 of the top 20 states are in these four regions. In contrast, 16 of the 20 lowest-ranking states are in the Midwest, Great Plains and Southern regions.

The State New Economy Index measures states’ economic structures. Rather than measuring state economic performance or state economic policies, the Index focuses more narrowly on a single question: To what degree does the structure of state economies match the ideal structure of the New Economy?

The Index builds on the 1999, 2002 and 2007 reports, using 29 indicators to rank each state on the extent to which its economy is structured and operates to effectively compete nationally and globally. It divides the indicators into five categories that best capture what is new about the New Economy: knowledge jobs, globalization, economic dynamism, transformation to a digital economy and technological innovation capacity.

The principal driver of the New Economy, according to the Index, is the information technology revolution that, since the mid-1990s, has driven increased productivity and transformed virtually all industries. This “IT engine” is unlikely to slow down anytime soon. For the foreseeable future, the most promising New Economy advances will relate to a state’s ability to use information more effectively.

“These and other opportunities and challenges mean that, to succeed in the New Economy, states face a new imperative to boost the competitiveness of their economies—not just relative to each other, but to other nations,” said Dr. Robert D. Atkinson, president of the Information Technology and Innovation Foundation and primary author of the Index. “If they are going to meet the economic challenges of the future, states will need to overhaul their familiar approaches to economic development.”

States at the top of the ranking tend to have a high concentration of managers, professionals and college-educated residents working in “knowledge jobs”—those that require at least a two-year degree. With only a few exceptions, manufacturers in these top-ranking states generally are more geared toward global markets, both in terms of export orientation and the amount of foreign direct investments.

All the states at the top of the ranking—even those that are not growing rapidly in employment—also show above-average levels of entrepreneurship. Most are at the forefront of the information technology and Internet revolutions, with a large share of their institutions and residents embracing the digital economy. Most have a solid innovation infrastructure that fosters and supports technological innovation, and many have high levels of domestic and foreign immigration of highly mobile, highly skilled knowledge workers coupled with a good quality of life.

While lower-ranking states face challenges, they also can take advantage of new opportunities. The information technology revolution makes it easier for businesses to relocate, or start up and grow in less densely populated states farther away from existing agglomerations of industry and commerce. Moreover, notwithstanding the recent decline in housing prices, metropolitan areas in many of the top states suffer from high costs and near-gridlock on their roads. Both factors may make locating in less-congested metros, many in lower-ranking states, more attractive.

In addition to 2008, Massachusetts topped the 1999, 2002 and 2007 State Index lists. Washington, which ranked fourth in 2007 and second in 2002, has moved back to second place, scoring high due to its strength in software and aviation. Maryland, with its high concentration of knowledge workers, maintains the third-place rank it held in 2007.

Between 2007 and 2008, most states and the United States as a whole made sustained progress toward the New Economy. Of the 23 indicators that were comparable between 2008 and 2007, overall the United States increased on 16 and decreased on seven, for a net increase of nine indicators.

Among the states, only 11 regressed, and 36 increased. Of the decliners, Mississippi led the way, falling in twice as many indicators as it increased, while Wyoming and Indiana also fell (a net of -6 and -5, respectively). In contrast, many more states saw significant increases in movement to a New Economy. Nine saw at least twice as many indicators increasing as decreasing, with Arizona, California and North Carolina showing the most progress.

Given some states' reputations as technology-based, New Economy states, their scores seem surprising at first. For example, North Carolina and New Mexico rank 24th and 29th, respectively, in spite of the fact that the region around Research Triangle Park (in the Raleigh-Durham metro area) boasts top universities, a highly educated workforce, cutting-edge technology companies and global connections, while the Albuquerque region is home to leading national laboratories and an appealing quality of life. In both cases, however, many parts of the state outside these metropolitan regions are more rooted in the old economy. As these examples reveal, most state economies are, in fact, a composite of many regional economies that differ in the degree to which their economies are structured in accordance with New Economy factors.

With the economic indicators as a reference, the Index also outlines a detailed and innovative public policy framework of “best practices” that state officials can use as a guide to transform their economies and ensure rising standards of living for their residents.

Governor Schwarzenegger to Launch the Week

Entrepreneurship at the Head of the Class

College graduation is quickly approaching for millions of young Americans. During Global Entrepreneurship Week/USA, students across the country will learn how to embrace innovation, imagination and creativity, and how to apply it to their future careers.

More than 275 universities and colleges in the United States will join thousands of organizations across the globe in an effort to inspire millions to generate new ideas and seek better ways of doing things. They have taken two tracks in planning their activities. Duke, as a classic example, has created activities based on themes—law, undergraduates and technology. While others, like the LaunchPad at the University of Miami, are hosting a variety of events each day for people of all different interests. Their events encompass the topics of entrepreneurship and life sciences, entrepreneurship in the movies,
entrepreneurship in negotiation and social innovation and enterprise.

Colleges are not only focused on a variety of themes but they are also hosting a multitude of activities. The  
University of Hawaii is hosting a business pitch competition, many speednetworking activities, a variety of speakers and big opening and closing celebrations.

Drexel University, on the other hand, has taken a slightly more academic approach by inviting a variety of speakers and focusing heavily on the biomedical sector.

Others branching out from “typical” university programming:

    * Chapman University is holding a ‘ball drop’ event similar to the New Year’s Eve countdown in Times Square;
    * Southeast Missouri State University is holding music workshops;
    * University of Maryland is hosting noted cake baker Duff Goldman;  and the
    * University of Texas is holding a technology boot-camp.

These creative new takes on exploring entrepreneurship will reach out to students who may not otherwise be interested in the field.

Not only have universities created off-beat activities, but some have also stretched their imaginations in
another way by creating a truly global program. These include:

    * The University of Illinois, Urbana-Champaign will help to launch the World Universities Network during the Week
    * University of Wisconsin will coordinate with Wageningen University in the Netherlands to create a truly cross-cultural entrepreneurship bootcamp; and,
    * University of California, Berkeley will hold a Global Technology Leaders Conference with leaders from science, technology, business, law, and economics to exchange and debate ideas regarding society’s fundamental problems and how technology and science can solve them.

The breadth of involvement by universities is truly impressive especially amongst the most active partners.
Chapman University and the University of Miami each have 25 activities occurring during the Week, which places them together at the top of the list. Northeastern University comes in a close second
with 24.

Stay tuned for additional updates during the Week on what’s happening on a campus near you.

The Questions All Would-Be Entrepreneurs Need to Ask Themselves

When I decided to move forward with Inkwell Designs, relying only on my efforts, my friends told me that I was brave. They didn’t understand how I could face such uncertainties with only my self-confidence and subject expertise. There were a thousand questions thrown at me, from all sides, family, friends, neighbors I’d never met: From where was the next paycheck coming? How was I going to pay my bills? What was I going to do if I didn’t get paid on a regular basis? How was I going to find customers? Was my dog ever going to be fed again? (This last one was a big concern because my dog is huge, and the neighbors feared for the lives of their children…and rightly so.)I understood their concern, as it is common for most of the population. People want and need security. Stepping outside the lines and attempting to create something out of nothing seems a bit nerve wracking. But what about basing your entire life on the whim of an executive you’ve never known, and who knows you only by a number or position on the org chart? Doesn’t that seem far more risky?The company I dedicated my life to over the past three years has and continues to cut the excess fat from the organization. (Let me just step back and define “dedicated” so you understand the gravity of the situation. This would be working, on average, 15- to 30-hour days, 120- to 130-hour weeks, with no overtime. Granted, the salary was nice, but after you broke down the hours, Burger King looked more promising [and had better career options!]). So as my former employer, and many other businesses in our floundering economy, release hardworking, DEDICATED employees, one has to wonder, where is the security in corporate America?To me, and I don’t expect everyone to share this opinion, but to me, it is far more certain to stand on one’s own feet, rely on one’s dedication and motivation, than to trust in the decisions of men and women who base their opinions on those of others (have you met those others??!). I know, and have seen, that no matter how much time and effort you give to a company, the relationship is not always reciprocal, whether it be pay, time away, personal satisfaction, or many of the other reasons we chose a certain place of employment. Most recently, I have seen many friends and colleagues, despite qualifications, years of service, or even relationships with the head shed managers, cast aside without a second glance.

Has to make you wonder.

In my company, I know my success begins and ends with me. I trust myself this much. The question for those who wish to control their future, or are uncertain about their path of entrepreneurship is, do you?

Or, more importantly, can you afford not to?

Russell Simmons Announces Race to BE.

Hip-hop pioneer and entrepreneur Russell Simmons  launched the Race to BE. competition on Oct. 2 at the New York Stock Exchange.

The Race to BE. is the signature event of Global Entrepreneurship Week/USA, and will encourage young people to leverage their artistic abilities in film, music and fashion into entrepreneurial endeavors.

Simmons brings a lifetime of creative entrepreneurial success to his role as host of the Race. including the creation of Def Jam Records, Phat Farm and the newly launched Argyle Culture. Simmons will be joined by Carl J. Schramm, president and CEO of the Ewing Marion Kauffman Foundation, which is a national sponsor of the Race to BE. along with the Acton Foundation for Entrepreneurial Excellence.

The Race to BE. competition will focus on the genres of film, music and fashion. Each competition will take place in its respective artistic center: Los Angeles (film), Austin (music) and New York (fashion). Applicants must be between the ages of 18 and 29 and submit their applications and sample of their existing creative work online at www.racetobeusa.com.

> APPLY NOW.

> Watch the archived webcast

 

BE. Entrepreneurial... Applications Open

If you are between the ages of 18-29, and will be in Los Angeles, Austin or New York in November, we want to hear from you. You can compete to be the next big entrepreneurial star in the worlds of film, music or fashion. Click here to Apply Now

More than 1,000 US Partners

More than 1,000 partner organizations in the United States are planning activities for Global Entrepreneurship Week/USA.

Are you one? If not, and your organization will pledge to hold at least one activity during the Week, sign up to be a Partner now.

If you just want to participate in activities or simply track what is happening during the Week, sign up to be a Member. 

Your State Needs You… to Blog

The Global Entrepreneurship Week/USA site will feature a collection of blogs for each of the 50 states (plus DC and U.S. territories) — highlighting plans for the Week and sharing inspiring stories from entrepreneurial individuals and organizations that recognize opportunities and work to make a difference each day. Do you have a knack for the written word? Are you willing to talk to partners and others in your state and share their plans? Do you want to interview the next up-and-coming entrepreneur in your community?

Then volunteer to be a Global Entrepreneurship Week/USA blogger.

At the center of Global Entrepreneurship Week/USA, young people will be testing their innovation and creativity in the Race to BE. Developed in the same vein as a reality TV show, teams of contestants in several U.S. cities will compete in unique challenges designed to reflect prominent fields in those cities. Currently, challenges are slated for Los Angeles in film (BE. The Story), Austin in music (BE. The Sound), and New York in fashion (BE. The Style).

 

2008: Bigger, Faster, Stronger.