For the second year in a row, Massachusetts has been named the most innovative state in America by the U.S. Chamber of Commerce Foundation's "Enterprising States" study.
The Bay State has long been considered a bastion of innovation and entrepreneurialism, and this ranking is further evidence of that. Massachusetts has consistently ranked near the top of various other measures of innovation, including the Boston Consulting Group's "Innovation Premium" index and Bloomberg's "Innovation Index."
What makes Massachusetts so innovative? There are a number of factors, but one key reason is the state's highly educated workforce. Nearly half of all adults in Massachusetts have a college degree, the highest percentage in the nation.
There are a few reasons for the ranking, including different weighted measures. Here are a few where Massachusetts ranked the highest, according to WalletHub:
· 1st (Tied) Highest R & D Spending per Capita
· 1st (Tied) Highest Venture-Capital Funding per Capita
· 3rd Best Eighth Grade Math & Science Performance
· 4th (Tied) Highest Share of STEM Professionals
· 5th Highest Share of Science & Engineering Graduates Aged 25+
Why Does State Innovation Matter?
The concept of introducing new ideas, technology, and ways to conduct business is a hallmark of a solid future for any state’s economy. Innovation is crucial at every level of an enterprise, including startups, small businesses, and major corporations; it helps move markets, concentrate market share within a region, and attract talent to continue the cycle of positive growth.
When it comes to the US as a whole, innovation is crucial for economic expansion. Disruptive startups and changing business models are what keep the country ahead of the curve, with the highest GDP, and the third overall ranking in the Global Innovation Index. The ranking of innovative states attempts to show which individual states and regions are contributing the most to the success of the United States in these international rankings.
The study was conducted by WalletHub and factored in multiple topics to produce the final ranking. Questions researchers included where based in broad topics around human capital and the innovation environment for each state.
A Breakdown of Massachusetts’ Standing
So what else contributes to the Commonwealth’s high innovative ranking year to year? In short, a consistently strong economy.
In the last quarter of 2020, Massachusetts increased its GDP by nearly 8%. Prior to that, the state GDP had increased by 33.1%. Additionally, despite the fact that the unemployment rate is slightly higher than the national average at 4.3%, it only grew 1.3% over a single year period, arguably due in large part to the pandemic. The overall labor force has also risen in the last four years by roughly 121,400 residents.
Another important innovation standard? Startups. Massachusetts is doing exceptionally well in this category with billions invested in innovative research ideas and future companies. This investment culture and the potential opportunity it will bring for future industries and jobs, has made the Boston area among the most likely to be the next Silicon Valley.
In addition to a strong economy, the state of Massachusetts is also home to top-tier colleges and universities. With such an educated workforce, it’s no wonder that the Commonwealth has been able to produce so many successful startups.
And Finally
While it’s good news that Massachusetts is once again the most innovative state in America, there’s always room for improvement. The state can continue to invest in its workforce by providing more opportunities for training and education. Additionally, policymakers could focus on creating an even more business-friendly environment to attract more startups and entrepreneurs to the Commonwealth.
By continuing to invest in its workforce and business environment, Massachusetts is poised to maintain its ranking as the most innovative state in America for years to come.