There is a new state competitiveness index out, this one from the Beacon Hill Institute of Suffolk University. More sophisticated than some, it still contains a few questionable (ideological?) items and its own flaws. For example, union membership and size of state government are taken as competitive negatives. I would question that. In some cases, this results in a strange outcome. For example, my old home state of Michigan ranks 39th in “employer firm births per 100,000 population” – a key indicator in their business incubation subindex. (Interestingly, I don’t know if that is a net (births minus deaths) or a gross (only births) number – arguments can be made for including either). However, Michigan ranks 43rd in unionized workforce. That somehow drags the state down to 48th place in the business incubation subindex (even though all the others components are at 38th or 39th place). The impact of the unionization component is also heavy for Maryland – which ranks high on many of the incubator indicators (and is generally recognized as doing a good job in promoting firm creation – 11th in firm births).
Maryland is also penalized because it has a low level of foreign direct investment – which is taken of a surrogate for a more closed economy. That is another assumption that is highly questionable.
In addition, almost every one else, technology is given center stage rather than innovation. And technology is measured by the same flawed indictors of R&D funding, STEM workforce and patents. (To be fair, everyone else uses these as well – in part because we have nothing better). Curiously, even with this, the so-called high-tech states don’t necessarily come out on top.
All in all, a good attempt. But I am still waiting for the definitive study (which may be a chimera after all).
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