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April 17, 2007

Report finds New York well placed in new economy

A report analyzing states' progress in moving to a technology and innovation-driven economy gave New York high marks for knowledge, technology and innovation.

The report, The 2007 State New Economy Index, which was released by the Information Technology and Innovation Foundation in cooperation with the Kauffman Foundation, measured 26 different factors across five categories to give each state its final index score.

New York was ranked 10th highest in the nation with an overall score of 77.4. The state ranked ahead of Texas (14th), Pennsylvania (21st), and Florida (23rd). Massachusetts ranked first overall.

Contributing to New York's high overall score was the high number of total patents awarded to companies and individuals per 1,000 workers. The percentage of New York workers with advanced degrees also helped push the state into the top 10.

But the study found New York lagging far behind other states in some measures of technological advancement, and reported Upstate New York, in particular, was suffering.

The tables included in The 2007 State New Economy Index have been added to the Public Policy Institute's Just the Facts database. That database includes 57 tables comparing the cost of major business expenses, along with other indicators, in New York and the other states.

While many areas of the Northeast, including Boston, were able to adapt to the new economy, Upstate New York and other regions never fully made the shift, the report said. “As economic transformation once again leads to a dramatic expansion in the effective size of the economy – this time on a global scale – the key question is which path the United States will follow: that of Boston or upstate New York?”

New York's technology in schools ranking was 36—although the study noted the state had improved its ranking since the index was last published in 2002.

The number of Internet users in New York was low compared to the national average —making it 35th in the nation for on-line population. Alaska, New Hampshire, Utah and Wyoming were the top five.

Other factors on which New York's ranking was only middling included foreign direct investment (14th), and percentage of scientists and engineers in the workforce (15th).

The report included a number of ideas for states to boost their overall index rating, including carefully targeting incentives to create high-skilled, high-paying jobs and enhancing the role of universities in regional economic growth.

States should also increase the supply and quality of scientists and engineers, the report said.

“If America and states are to succeed in the innovation-powered global economy, boosting science, technology, engineering and mathematics degrees is particularly important,” the report said. “The number of Americans majoring in math and science has failed to keep pace with demand. The only factor keeping severe shortages from occurring has been the foreign immigration of scientists and engineers.”

The report warned that in the future the nation may not be able to depend on immigration of technology workers as countries such as China and India continue to grow.

States take three steps to expand the supply of scientists and engineers, the report suggested. Those steps include encouraging universities to institute professional masters of science and engineering programs, rewarding institutions that increase the number of math and science degrees awarded, and expanding specialty math and science magnet high schools.

The report is available at www.itif.org/index.php?id=30.

Just the Facts is available at www.ppinys.org/reports/JustTheFacts.html.