A new study indicates varying degrees of adaptation by states to an innovation-based, global economy.  Funded by the Kauffman Foundation and authored by the Information Technology and Innovation Foundation (ITIF), the 2010 State New Economy Index recognizes Massachusetts as the state leading the U.S. in adopting a more technologically dynamic, knowledge-driven economic structure, while the Plains States and southern states tend to be slower to follow suit.  

What follows has been excerpted from the original announcement by the Kauffman Foundation:

“In this century, the global economy has shifted,” said Robert Litan, vice president of Research & Policy at the Kauffman Foundation. “A mix of highly productive and innovative New Economy firms is necessary for an economy to prosper. The United States is lagging, and that lack of innovation-based vitality has contributed to our continuing recession. States need to concentrate on achieving New Economy success factors and providing the entrepreneurial resources and access that are critical to boosting competitiveness within the global marketplace.”

The State New Economy Index uses 26 indicators to assess states’ fundamental capacity to successfully navigate the shoals of economic change. It measures the extent to which state economies are knowledge-based, globalized, entrepreneurial, IT-driven and innovation-based – in other words, to what degree state economies’ structures and operations match the ideal structure of the New Economy. The 2010 Index builds on four earlier Indexes, published in 1999, 2002, 2007 and 2008.

“In today’s highly competitive environment, states must work together and with the federal government to overhaul their economic development policies,” said Dr. Robert D. Atkinson, president of the Information Technology and Innovation Foundation and co-author of the Index. “Too often, states still view their economic competitors as next door, rather than halfway around the world. If, instead, they used incentives to expand broadband, support entrepreneurial assistance programs, or invest in research and technology transfer, they – and the nation as a whole – would be far more globally competitive.”

The report recommends that, to pursue this new approach to economic development, states should 1) establish policies that reduce within-state zero-sum competition; 2) implement state policies to spur “win-win” economic results; and 3) pursue new state-federal innovation-based economic development partnerships.

“During National Entrepreneurship Week, we renew our commitment to supporting the entrepreneurs who power the engine of our Nation’s economy. These intrepid individuals translate their vision into products and services that keep America strong and competitive on a global scale, and build opportunity and prosperity across our country.”

President Barack Obama

Read President Obama’s Proclamation

By John Fernandez
U.S. Assistant Secretary of Commerce
for Economic Development

Throughout our history, the unparalleled freedoms that we enjoy as Americans have fueled an entrepreneurial culture that has made us the global leader in introducing new technologies and new ideas into the marketplace.

With President Obama’s proclamation setting November 14 through November 20, 2010, as National Entrepreneurship Week, today we celebrate National Entrepreneurs’ Day to honor our nation’s entrepreneurs and their role as catalysts for creating new industries, businesses and jobs.

We’ve come a long way since President Obama took office and committed to supporting entrepreneurial growth by pursuing a balanced approach to investing in the building blocks of innovation and providing a jump start for innovation in sectors of national importance.

Under the President’s National Innovation Strategy we are building that new foundation for sustainable growth to not only to usher in a new expansion, but making sure it is more enduring, rewarding, and broad-based than previous ones.

The American Recovery and Reinvestment Act served as the cornerstone for this new foundation by pumping $100 billion into the economy to help us tackle some of the grand challenges of the 21^st century in diverse fields from healthcare IT and health research, to clean energy, to smart grids, and high speed trains.  Recovery Act investments are creating a virtuous cycle of investment, innovation, and job creation that have so far led to the creation of 3 million new jobs.

And with additional major steps, including the President’s National Export Initiative (NEI) and the recent passage of the Small Business Jobs Act we are making sure that American entrepreneurs are strengthened and have the resources they need to compete globally.

At EDA, our Office of Innovation and Entrepreneurship (OIE) is working to ensure that we are helping communities and regions accelerate the creation new products, new industries and new jobs.

The $12 million i6 Challenge, which was run through OIE, highlighted President Obama’s commitment to support public sector and social innovation through the use of high-risk, high-reward policy tools and is supporting the nation’s best ideas for technology commercialization and entrepreneurship in six different regions of the country.

While much progress has been made to support entrepreneurial development, we know there is a lot more work we can do to assure our competitiveness and I can assure you of the ongoing commitment by the President and his administration in support of American businesses and entrepreneurs.

To hear more about what the administration has planned to promote innovation-based, high-growth entrepreneurship, I am pleased to let you know that the White House will host a special live chat with Commerce Secretary Gary Locke today, Friday, November 19th at 1:00 PM EST.

Submit your question now at fastcompany.com, and Fast Company editors will select as many as they can to pose to the Secretary on Friday.  During the event, you can also submit questions at whitehouse.gov/live or on facebook.