OHIO GAINING SLOWLY IN 'NEW ECONOMY' RANKINGS
With NEWECONOMY-DATA. Moving in national and financial categories.
By BOB KEEFE
Ohio continues to make headway in its transformation from a manufacturing "smokestack" economy to a "new economy" state based on high-tech companies and well-educated white-collar workers.
But the state still lags much of the rest of the country, according to a study released Tuesday.
Ohio ranked No. 29 on this year's New Economy Index, created by the nonprofit Kauffman Foundation and the Information Technology and Innovation Foundation.
That was up one spot from a similar study five years ago, and up from No. 33 in a study that the groups did in 1999.
Massachusetts, where biotech and computer companies have replaced shoe factories and textile mills, led the list, as it did in the previous two studies.
New Jersey, Maryland, Washington state and California followed it this year. At the bottom of the list were Alabama, Arkansas, South Dakota, Mississippi and West Virginia.
In ranking the states, researchers considered factors such as the number of managerial, professional and information technology jobs; foreign investments, state exports and the immigration of "knowledge-based" workers.
It also considered overall entrepreneurial activity and corporate initial public offerings, as well as Internet-specific factors for each state, such as the number of Internet domain names, online consumers and "e-government" initiatives.
The study tries to analyze how states are transitioning from an economic development model based on "smokestack chasing," in which success is measured by the number of big company relocations and expansion, to one based on innovation, global trade and highly educated, highly paid workers.
"In order to succeed in the new global economy, states can no longer rely on a strategy of relentlessly driving down costs and providing large incentives to attract locationally mobile branch plants or offices," Robert Atkinson, president of the Information Technology and Innovation Foundation and primary author of the index, said in a statement.
"Rather ... states must create an environment that fosters innovation and high skills in order to help fast-growing entrepreneurial firms and innovative existing firms expand," he said.
According to the study, the number of industrial manufacturing relocations and major expansions has fallen from about 5,100 annually during the late 1990s to about 3,100 two years ago.
Ohio ranked relatively high in some areas of the "new economy" study, such as "e-government" initiatives (No. 5), the immigration of knowledge workers (No. 7) and fastest-growing firms (No. 17).
But it ranked poorly in other areas, such as workforce education (No. 39) venture capital availability (No. 35) online population (No. 30).
About 21 percent of Ohio workers are in managerial, professional or technical jobs, according to the study, and almost 3 percent are high-tech workers.
On the Web:
Kauffman Foundation: www.kauffman.org/neweconomy/
Bob Keefe's e-mail address is bkeefe@coxnews.com