Do You Live in One of America's Most Innovative States?

Some states contribute more to the American pursuit of knowledge and progress than others, and there's more than one way to rank them.

Feb 23, 2014 at 4:15PM

We're the nation that put cars in driveways and computers in offices; the nation of Edison and the Wright brothers; of Google and Facebook. In America, innovation doesn't just change our lives. It is how we make our living.
-- President Barack Obama's 2011 State of the Union Address

Americans are proud of their innovative heritage, and rightly so. But innovation isn't equally distributed across the country -- it thrives in pockets of high-tech development and withers where state and local governments fail to provide adequate support. Everyone knows about California's Silicon Valley, but that area isn't the only part of America, or even of California, where innovation is a fact of life for residents and workers.

Late last year, Bloomberg undertook an exhaustive effort to rank all 50 states (and the District of Columbia) on "innovation," which was quantified in several ways. At the end of this article, you'll find the full list of rankings, but let's focus today on how these rankings work, highlighting the best-performing states on each metric to better understand what really drives the engine of American innovation.

Dcoverhead

Source: Air Force Tech. Sgt. Andy Dunaway via Wikimedia Commons.

Most science, tech, engineering, and math professionals: Washington, D.C.
It might surprise a number of you to learn that the nation's capital can claim that a whopping 9.23% of its population is a STEM (science, technology, engineering, and math) professional, which is nearly three times the concentration of STEM professionals found in second-place Massachusetts (with 3.44%). This lead also holds up in the District's ratio of science and tech degree-holders to the rest of the population, which at 20.30% is roughly twice as high as Massachusetts' 11.84%.

This becomes a lot less surprising when you remember just how much federal agencies and their supporting contracting companies rely on the contribution of savvy analysts, researchers, and technologists. But Washington, D.C., itself places only 20th on Bloomberg's overall innovation rankings, while Massachusetts places third, owing to a much lower share of the nation's utility patents and to a lower ratio of public tech companies to overall public companies. Massachusetts ranks highly on both of these measures, which just goes to show that innovation isn't about your training -- it's what you do with it that matters.

Most surprising: Colorado (3.21%) has more STEM professionals per capita than California (2.26%).

Hppavilion

Source: User JaGa via Wikimedia Commons.

Largest share of American utility patents: California
The STEM rankings might have surprised you, but you're probably familiar with California's utter dominance of America's patent process. Patent-happy Silicon Valley led the state to a 26.54% share of all utility patents -- those awarded for inventions -- granted in the country, more than the next five states on the list put together. Last year, seven of the top 50 U.S. patent assignees were California-based corporations, but since only 17 of the companies on the top 50 are actually headquartered in the U.S. to begin with, it's easy to see why the state collects so many patents.

Third-place New York earns high spot on the patent rankings thanks largely to the efforts of only three companies: IBM (NYSE:IBM) is a perennial top finisher on yearly patent tallies and was awarded a whopping 6,809 patents in 2013, but Schenectady-based General Electric picked up an impressive 1,739 patents, and Rochester-based Xerox added another 1,013 patents to New York's haul.

Most surprising: Washington D.C., despite boasting a very tech-heavy workforce, earned only 0.11% of all U.S. utility patents, and sunny Florida (3.05%) picked up more patents than STEM-heavy Colorado (2.02%).

Nycskynight

Source: Frederic de Villamil via Wikimedia Commons.

Biggest state supporter of U.S. research: New York
New York, which accounted for 7.7% of national GDP in 2012, pulled almost twice its weight in terms of national R&D, as its state government spent 13.02% of all state-sourced R&D spending. New York is using this money to support renewable energy initiatives, to devise health and medical breakthroughs, to improve transportation, to increase the capabilities of agriculture, and to simply discover the unknown. Most of the state's research goes toward health or energy projects, which is a similar spending profile as that of fellow high-spending states California (10.67%) and Ohio (11.35%).

Most surprising: Florida (10.74% of the national total) spent more on R&D than Pennsylvania (5.06%), Texas (3.37%), and Washington (1.75%) combined.

Most public tech companies: New Mexico
How can this be? When most people associate science and technology with New Mexico, they think of Walter White making crystal meth in the back of an RV. Yet a nearly third (32.14%) of all public companies based in New Mexico are tech companies. The reason is deceptively simple: there are so few public companies headquartered in New Mexico  that its publicly traded mix is easily skewed. None of New Mexico's public "tech" companies are particularly notable, either, which makes this ranking a bit less valuable than the others. Bloomberg seems to agree, as New Mexico is only the 30th most-innovative state in America.

Most surprising: There are more publicly traded tech companies as a percentage of all public companies in Kansas (21.82%), Mississippi (17.86%), or Hawaii (16.67%) than there are in New York (16.32%).

Spaceneedle

Source: User Anupap_ts via Flickr.

Most innovative state: Washington
California has Silicon Valley, but the state of Washington is well known for its heavy concentration of notable tech companies, led by Microsoft (NASDAQ:MSFT) in Redmond and Amazon.com (NASDAQ:AMZN) in Seattle. Aerospace giant Boeing (NYSE:BA) is also a major contributor to the state's high concentration of engineers (2.82% of the state's population works in STEM fields), and it might be considered the original Washington state tech company, since it was founded nearly 60 years earlier than Microsoft. Bloomberg  notes that Washington "arguably owns the cloud" thanks to Microsoft and Amazon's leadership in the field, and these companies also help boost the state's rank in patent activity (it earned 4.45% of all utility patents).

California comes in a close second, and Massachusetts -- home to MIT and the nation's strongest robotics companies -- places third on the list. Where does your state rank? Scroll down to find out!

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Table guide: STEM is the number of STEM (science, tech, engineering, and math) professionals as a percentage of the state population. Patents and R&D spending are percentages of national total. Tech companies are percentages of all public companies based in the state.

Rank

State

Score

STEM

Patents

R&D

Tech Co.'s

1

Washington

83.25

2.82%

4.45%

1.75%

21.37%

2

California

81.07

2.26%

26.54%

10.67%

28.92%

3

Massachusetts

80.93

3.44%

4.74%

0.35%

29.19%

4

Connecticut

76.45

2.72%

1.74%

2.79%

17.65%

5

Oregon

75.73

2.28%

1.70%

1.42%

19.79%

6

New York

74.15

1.87%

6.31%

13.02%

16.32%

7

New Jersey

73.38

2.39%

3.49%

1.22%

27.80%

8

Colorado

72.4

3.21%

2.02%

1.29%

17.18%

9

Maryland

71.38

2.89%

1.33%

1.43%

17.15%

10

Minnesota

70.7

2.70%

3.23%

0.83%

19.23%

11

Virginia

68.8

3.10%

1.40%

1.23%

17.74%

12

Texas

64.58

1.96%

6.92%

3.37%

12.45%

13

Utah

63.3

2.06%

0.96%

2.45%

22.58%

14

Arizona

61.03

1.89%

1.83%

1.33%

26.36%

15

North Carolina

60.67

1.75%

2.46%

2.11%

18.93%

16

Illinois

60.52

2.09%

3.59%

1.23%

10.91%

17

Pennsylvania

59.62

1.91%

2.88%

5.06%

12.72%

18

Kansas

57.12

2.20%

0.83%

0.47%

21.82%

19

N.H.

55.95

2.19%

0.61%

0.14%

31.03%

20

D.C.

55.53

9.23%

0.11%

0.09%

19.23%

21

Michigan

53.8

2.69%

3.80%

0.70%

8.46%

22

Ohio

52.38

1.99%

2.80%

11.35%

7.02%

23

Florida

52.35

1.48%

3.05%

10.74%

17.10%

24

Wisconsin

52.15

2.02%

1.48%

1.51%

13.59%

25

Rhode Island

51.3

2.08%

0.27%

0.14%

31.82%

26

Alaska

49.6

2.16%

0.02%

0.81%

None

27

Iowa

49.58

1.62%

0.71%

2.64%

15.56%

28

Delaware

48.57

2.52%

0.37%

0.19%

14.81%

29

Georgia

45.53

1.75%

1.76%

0.83%

14.34%

30

New Mexico

43.5

1.98%

0.34%

0.13%

32.14%

31

Hawaii

42.5

1.42%

0.09%

0.93%

16.67%

32

Vermont

42.35

2.53%

0.40%

0.12%

6.67%

33

South Carolina

41.43

1.35%

0.70%

3.40%

15.71%

34

Maine

39.82

1.53%

0.17%

0.71%

23.08%

35

Indiana

38.37

1.53%

1.44%

0.50%

10.95%

36

Nebraska

37.63

2.20%

0.24%

0.29%

16.28%

37

North Dakota

36.27

1.65%

0.08%

0.58%

12.50%

38

Missouri

36.07

1.71%

0.84%

0.97%

11.46%

39

South Dakota

35.82

1.44%

0.09%

0.26%

23.08%

40

Idaho

32.58

2.16%

0.77%

0.67%

7.58%

41

Alabama

31.67

1.52%

0.34%

1.40%

13.64%

42

West Virginia

31.6

1.22%

0.11%

2.53%

None

43

Oklahoma

30.5

1.50%

0.39%

1.45%

10.87%

44

Montana

29.4

1.47%

0.10%

0.46%

None

45

Kentucky

28.27

1.34%

0.45%

1.46%

8.06%

46

Nevada

26.75

1.11%

0.62%

0.13%

17.48%

47

Louisiana

26.35

1.39%

0.30%

0.66%

13.70%

48

Tennessee

24.53

1.31%

0.77%

0.26%

6.90%

49

Wyoming

22.67

1.52%

0.10%

0.39%

5.88%

50

Mississippi

21.15

1.08%

0.12%

0.53%

17.86%

51

Arkansas

20.95

0.97%

0.15%

1.05%

8.33%

Source: Bloomberg Visual Data.

Alex Planes owns shares of Xerox. Add him on Google+ or follow him on Twitter, @TMFBiggles, for more insight into markets, history, and technology.

The Motley Fool recommends Amazon.com, Facebook, and Google and owns shares of Amazon.com, Facebook, General Electric, Google, IBM, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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