Which state leverages technology best? A study by the Information Technology and Innovation Foundation claims to have the answer.
The ITIF, a Washington D.C.-based non-profit research group, published its 2014 State New Economy Index this month that ranks state economies based on rubrics that factor in tech use, innovation, entrepreneurship and global reach. Overall, the states of Massachusetts, Delaware and California were said to have the strongest economies.
However, its ranking category of Digital Economy — which measures state implementation of e-government, broadband communications, health IT and online agriculture — also had a few unique perspectives. Like the overall picture, in tech Massachusetts was pointed to as the highest performing. It was followed by Minnesota, New Hampshire, Rhode Island and Michigan to round out the top five.
The analysis was influenced heavily by technology’s driving power to grow businesses and cut costs through efficiency. Departments use of automated online services, farmers use of computers for business, average speeds of broadband, and the pervasiveness of health IT all fed into the equation.
The study broke down results for subcategories as well. In e-government, for example, there was a tie for first between Utah and Michigan. Another tie for second occurred between California, Minnesota, Ohio, Pennsylvania, Tennessee and West Virginia.
Linking broadband to finances, ITIF researchers attributed broadband speed as a key component to stimulate e-commerce and incentivize investment. Telecommuting, distance education, telemedicine and customer engagement were but a few of the associated benefits. Standing in podium positions, Massachusetts took first, New Hampshire second and Washington third. Many of the top-scoring contenders, the study noted, were states served by Verizon’s wide deployment of fiber-to-the-home service offerings. ITIF predicted states are likely to continue increasing broadband speeds. Based on the statistical trends, the report said that statistics show that average connection speeds increased by 131 percent in the last five years.
Evidence of health IT improvements are making similar strides and innovations expected to meet a rise of high costs. Adoption of health IT could purportedly reduce America’s health bills by $80 billion annually, a boon to the industry’s escalating costs. According to the report, costs have risen from $256 billion in 1980 to $2.6 trillion in 2010. However, data analytics initiatives, doctor conferencing, electronic health records and e-prescriptions are playing a role in diminishing financial burdens.
From highest ranked, states that took top health IT honors were Vermont, Minnesota and South Dakota.
While not as game changing compared to such billion dollar industries like health care, agriculture also contributed to states’ fiscal well being. Analysts said farmers and ranchers serve as a vital group of employers for certain states, and the industry is leaning more on technology to achieve its goals. Tasks like feed and seed buying, weather forecasting, crop selling and technical collaboration are conducted through the Internet in greater numbers. The New England states, followed by New Jersey and Oregon were listed as leading the way.
Outside of the Digital Economy rankings, the ITIF study also rated state on characteristics such as entrepreneurial activity, venture capital and high-tech jobs.
In entrepreneurial activity, Vermont ranked first, Montana and Arizona second, and California and Alaska third. Venture capital states started with Massachusetts and followed with California and Utah; while in the category of high tech jobs, Massachusetts, Virginia and Colorado placed first, second and third, respectively.
Below is a list of some of the top five overall states and tech categories. The full report in PDF form can be found here.
Top State Economies Overall
Top Digital Economies
3. New Hampshire
4. Rhode Island
Entrepreneurial Activity (based on percentage of people starting a business )
1. Vermont, 46 percent
2. Montana, 43 percent
3. Arizona, 43 percent
4. California, 42 percent
5. Alaska , 42 percent
1. New England States
2. New Jersey
1. Michigan and Utah
2. California, Minnesota, Ohio, Pennsylvania, Tennessee, West Virginia
2. New Hampshire
3. South Dakota
High Tech Jobs (based on the percentage of jobs in the high-tech industry)
1. Massachusetts, 9 percent
2. Virginia, 8.4 percent
3. Colorado, 7.8 percent
4. Maryland, 7.7 percent
5. California, 7.3 percent