The Best And Worst States For Innovation And Growth

The Top And Bottom Five

Entrepreneurs starting a business often look for environments where innovation and growth flourish, whether it's a tech epicenter like Silicon Valley or a university-saturated place like Boston. CRN's analysis of the best and worst states in which to start a solution provider business included identifying the states with the best and worst business environments for innovation and growth. The study looked at the growth rate of a state's gross state product, entrepreneurial activity, inventor patents and other indicators, as well as the percentage of engineer- and scientist-held jobs in a state's workforce and the percentage of high-tech industry jobs. The rankings were developed using data from the Information Technology and Innovation Foundation's 2012 New State Economy Index, the U.S. Bureau of Economic Analysis' June 6, 2013, gross state product report and CNBC. The metrics were weighted to reflect their importance to solution providers based on the results of a February 2013 CRN study conducted among 250 technology solution providers. The first five states have the highest scores (No. 5-No. 1), followed by the five with the worst rankings (No. 46-No. 50).

Best States No. 5: Maryland

Maryland was No. 4 in high-tech jobs (6.4 percent of the total workforce) and No. 4 in scientists and engineers (5.3 percent of the total workforce). But while Maryland ranked No. 11 in issued patents, the state was surprisingly low in entrepreneurial activity (No. 30).

The Old Line State ranked No. 15 in gross state product growth (2.4 percent).

Best States No. 4: Texas

Texas was No. 23 in high-tech jobs (3.6 percent of the total workforce) and No. 13 in scientists and engineers (also 3.6 percent of the total workforce). But while Texas ranked only No. 29 in issued patents, the state was No. 7 in entrepreneurial activity.

Texas was No. 1 in another key criteria: The value of exports per manufacturing and service worker, adjusted for industrial composition.

The Lone Star State ranked No. 2 in gross state product growth (4.8 percent).

Best States No. 3: Washington

Washington ranked No. 1 in scientists and engineers (6 percent of the total workforce) and No. 8 in high-tech jobs (5.7 percent of the total workforce). And, it's No. 6 in inventor patents. But, the state is a dismal No. 40 for entrepreneurial activity -- all those high-tech people must be working at Microsoft instead of starting their own companies.

The Evergreen State ranked No. 4 in gross state product growth (3.6 percent).

Best States No. 2: Massachusetts

Massachusetts was No. 1 in high-tech jobs (7.8 percent of the total workforce) and No. 3 in scientists and engineers (5.4 percent of the total workforce). Massachusetts ranked No. 5 in issued patents and No. 23 in entrepreneurial activity.

The Bay State ranked No. 19 in gross state product growth (2.2 percent).

Best States No. 1: California

Is it any surprise California comes out on top for innovation and growth? With Silicon Valley serving as the hub for IT startups, the state is ranked No. 1 for entrepreneurial activity. It's No. 2 in awarded patents (behind only Utah), No. 5 in high-tech jobs (6 percent) and No. 6 in scientists and engineers (4.6 percent).

The Golden State ranked No. 6 in gross state product growth (3.5 percent).

Worst States No. 46: Mississippi

Mississippi is ranked No. 50 in scientists and engineers (1.4 percent of the workforce), No. 50 in inventor patents and No. 49 in high-tech jobs (1.5 percent). Despite those seeming handicaps, Mississippi, to its credit, is ranked a respectable No. 16 in entrepreneurial activity.

The Magnolia State ranked No. 17 in gross state product growth (2.4 percent).

Worst States No. 47: Arkansas

Arkansas is ranked No. 47 in both high-tech jobs (1.9 percent) and in the percentage of scientists and engineers that make up its workforce (1.8 percent). The state is No. 49 in awarded patents (behind only Mississippi). But like Mississippi, Arkansas manages to score well in entrepreneurial activity (No. 14).

The Natural State ranked No. 38 in gross state product growth (1.3 percent).

Worst States No. 48: Wyoming

Wyoming is ranked No. 50 in high-tech jobs (1.4 percent) and No. 41 in scientists and engineers (2.2 percent). And it's only No. 45 in entrepreneurial activity. And yet Wyoming manages to rank No. 10 in awarded inventor patents.

The Equality State ranked No. 48 in gross state product growth (0.2 percent).

Worst States No. 49: West Virginia

West Virginia is ranked No. 46 in high-tech jobs (2 percent), No. 49 for scientists and engineers (1.7 percent) and No. 47 for inventor patents. Given those stats, it's no surprise the state is No. 50 for entrepreneurial activity.

The Mountain State, nevertheless, ranked No. 10 for its gross state product growth (3.3 percent).

Worst States No. 50: South Dakota

If you're looking for a state that holds out the promise of innovation and growth, South Dakota is apparently not your state.

South Dakota is ranked No. 44 for both high-tech jobs (2 percent) and the percentage of scientists and engineers in its workforce (2.1 percent). It's No. 35 for entrepreneurial activity and No. 24 for inventor patents.

The Mount Rushmore State ranked No. 46 for its gross state product growth (0.2 percent).