Massachusetts, Maine Vary in Measures of Innovation Economy

Measuring the strength of a state or region’s economy, particularly the elements related to tech-based economic development, is a tricky but vital tool for developing and updating TBED policies. Several challenges present themselves when deciding what information to present on the elements of the innovation system and assessing the region’s health and performance relative to appropriate surrogates.

 

Fortunately for the field, two states that have been leaders in using an index as a policy development tool, released reports last week which display an array of methods to analyze their own state’s relative TBED performance. Each report provides a unique perspective and can provide models for emulation and customization by other states.

 

Massachusetts

One of the forefathers and continual innovators in design and delivery of innovation indices is the Massachusetts Technology Collaborative (MTC), which released on Feb. 1 the 11th edition of its Index of the Massachusetts Innovation Economy. The report continues to benchmark Massachusetts in 20 indicators against selected states – California, Connecticut, Illinois, New Jersey, Minnesota, New York, North Carolina, Pennsylvania and Virginia.

 

New to this year’s edition, the Index benchmarks Massachusetts and the other states relative to other countries from around the world. This global perspective allows the selected state economies to be compared to countries typically considered the most innovative or competitive:

• Western Europe (Finland, Germany, Ireland, Sweden, Switzerland and the U.K);
• The Asia-Pacific region (Japan, Korea, Singapore);
• Emerging non-OECD countries (Brazil, Russia, India and China); and,
• North America (Canada)

International benchmarks are present throughout the four main sections of the report, which outline trends in R&D investment, human capital and workforce development, growth in specific industry clusters, and export trade and immigration.



The 20 indicators used to compare the benchmarked states are organized into three broad categories - economic impact, innovation processes and innovation potential - that are designed so that Massachusetts’ relative standings can be used to comprehend the dynamism of the state’s economy and its economic opportunities and threats.

 

Helping to facilitate the dialogue on how the state best capitalizes on its assets through its public TBED investments and policies continues to be one of the main purposes for MTC’s preparation of the Index.

 

Maine

Maine also recently released the latest update to its perennial benchmarking study, the 2008 Maine Innovation Index. The report was prepared for the state’s Office of Innovation within Maine’s Department of Economic and Community Development. While the MTC study described above mainly covers information on exports, immigration and wages, Maine’s index highlights additional details about the state’s preparedness to participate more fully in the knowledge-based economy through examining R&D investments and Maine’s connectivity or deployment of IT to schools and households.

 

Understanding trends for the indicators selected for inclusion in an index is critical; basing policy on single-year snapshots can be ineffective. Recognizing this, the Maine index provides a 10-year historical comparison for many of its 25 selected indicators, benchmarking its performance with that of the New England states, the U.S. as a whole, and the other EPSCoR states. Maine’s index contains a scorecard listing all of the indicators, illustrating if each has increased or decreased over both a one-year period and a five-year period.

 

While Maine has seen its R&D capacity and its educational attainment and skills increase over a five-year period, its number of patents issued and investments in venture capital have decreased, the report indicates. The state’s amount of R&D from various sources and its SBIR/STTR awards have increased over time, but these same measures standardized by gross domestic product reveal Maine consistently lags the U.S. as a whole, which in turn is consistently lagging the New England states as a whole. These insights can help influence the design or new or expanded initiatives by the state to improve its standing in future volumes of the Index.

 

The Massachusetts Technology Collaborative’s 2007 Index of the Massachusetts Innovation Economy can be found at: http://www.masstech.org/institute/the_index.htm

 

The 2008 Maine Innovation Index is available at: http://www.policyoneresearch.com/ReportsandDocuments.htm#Indexdocs