California Takes a Slide in Tech Rankings

Winning the battle for bragging rights among states — and sometimes very real economic benefits — Massachusetts has retained the top position in the Milken Institute’s 2008 State Technology and Science Index. Maryland nabbed second, Colorado third, and California slipped to fourth, down two spots from its second place position four years ago.

Regional competition for technology industries has increased since the last release of the study and rankings in 2004, according to the report. Not only are states vying with each other for human capital and resources, but also countries like China and India are upping the competition on a global level.

Massachusetts, which just passed a US$1 billion life sciences bill to invest in high-tech infrastructure and research and development over the next 10 years, is in the best position of any state to achieve high-quality economic growth thanks to its vast array of technology and science assets, the Milken Institute reported.

California’s Surprising Slide

While Maryland moved from fourth to second and Colorado hung onto third, California’s step back to fourth is surprising given the state’s traditional reputation for fostering all kinds of technology businesses and education.

California shows signs of faltering in its efforts to capture federal funding and build its future workforce, according to the report. In particular, researchers noted the decline in “standardized test scores and a low proportion of its population with bachelor’s degrees” could significantly hamper the ability to provide a skilled workforce to take advantage of its financial and industrial strength.

California’s troubles with human capital investment was really the problem area that pulled the state down a couple of notches, Ross DeVol, director of regional economics at the Milken Institute and lead author of the study, told TechNewsWorld. In addition, he said, California hasn’t been able to attract as many foreign graduate students to university programs, partially due to rising tuition costs.

Tough Competition

“One of the things that was really striking was that more of the scores were bunched around the mean, which indicates that more states have initiated technology-based economic strategies,” DeVol said. “The competition is heating up.”

Rounding out the top 10, Washington ranked fifth, followed by Virginia, Connecticut, Utah, New Hampshire and Rhode Island.

Mississippi, for the second time, was ranked 50th.

Comparing the top 10 to the bottom 10, “there’s such a huge disparity, and it varies by individual state,” DeVol said. “For example, Mississippi does a very good job of attracting federal research and development dollars but they don’t have hardly any industry R and D (research and development), and they’re not very successful in starting new companies and growing them. Some of the states in the bottom 10 have only just started to focus on technology-based economic initiatives.

“One of my concerns is, if these states don’t focus on technology-based economic strategies, they’ll risk being left behind because we simply can’t compete on a low-skill, low-cost formula. We have to move up the value chain — that’s the only way we can create the kinds of jobs for our citizens that we want them to have,” he explained.

Investing in Massachusetts

“This report is great news for Massachusetts and reflects our continuing commitment to the best science and technology,” noted Massachusetts Gov. Deval Patrick.

“We know that to compete and win in a global economy we need a workforce skilled in these areas,” he added.

While they didn’t appear in the top 10, some states made dramatic improvements: North Dakota showed the greatest gains, moving up 14 positions to 31st, and Hawaii jumped up 11 spots to 28th.

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