Measuring State Success in Science and Technology

The health and potential of a state's innovation ecosystem does not always directly correlate to current economic performance and overall job creation, despite media and policymakers' focus on such metrics. Although they vary across organizations and in scope, indices serve to assess states' assets and processes within their innovation ecosystems. Two recently published indices from the Milken Institute and the Information Technology and Innovation Foundation recognize innovation as a driver of economic growth, and provide comprehensive assessments of innovation data from 2012.

The Milken Institute's State Technology and Science Index is the fifth version of index since its initial release in 2002. The authors used 79 indicators within the following five components of the index:

• Research and Development Inputs — includes federal and industry R&D figures, NSF funding, STTR/SBIR awards;
• Risk Capital and Entrepreneurial Infrastructure — includes VC investment, number of incubators, patents, business formation figures, and investment in cleantech, green tech, and nanotech;
• Human Capital Investment — includes state spending on student aid and higher eduacation, computer and internet access, and test scores;
• Technology and Science Workforce — includes intensity of computer and information science experts, life and physical scientists, and engineers; and
• Technology Concentration and Dynamism — includes high tech employment, high-tech business births, high performing tech companies, and growth in the tech sector.

The previous version of the index, based on 2010 data, reflected the contraction of the science and technology sectors, while 2012 version reflects their resurgence as indicators increased across the board, especially in risk capital and entrepreneurial infrastructure. Massachusetts led the index overall and in every category except technology concentration and dynamism.

In its sixth version of the State New Economy Index, ITIF aims to assess the economic structures of states and their economy's degree of global integration, taking a broader approach than using common tech sector inputs and outputs. The authors employ 26 indicators in the following five categories:

• Knowledge Jobs — includes employment indicators of high tech jobs, migration and immigration patterns, and worker productivity;
• Globalization — includes foreign direct investment and the export orientation of manufacturing services;
• Economic Dynamism — includes job churning, firm growth, number and value of initial public offerings, number of entrepreneurs, and inventor patents;
• The Digital Economy — includes internet and broadband access, government and healthcare use of IT; and,
• Innovation Capacity — includes number of high-tech jobs, number of scientists and engineers, industry and non-industry R&D figures, movement toward a green economy, and venture capital investment.

Massachusetts also tops the ITIF's overall index ranking, but the high-ranking states in each category varied more than Milken's index, reflecting ITIF's broader focus on the overall economy. DE, WA, CA, and MD rounded out the top five states.

A number of metrics crossed both indices, but the Milken index tends to focus on the more traditional categorization of innovation ecosystem assets such as R&D, risk capital, human capital, and workforce, which are found in ITIF's category of innovation capacity. ITIF engages a broader analysis, focusing more on the ability of ecosystems to leverage their assets in a global and digital economy. Despite their differences, both indices use critical indicators to assess the health and growth of innovation ecosystems.