Massachusetts tops US tech index

By Ben Berkowitz

LOS ANGELES: Massachusetts remains the state best positioned to take advantage of a high-technology economy, while Mississippi lags the rest of the nation, according to a new study.

The Milken Institute, a Los Angeles-area think tank backed by former junk bond king, Michael Milken, used 75 separate measurements to come up with its State Technology and Science Index, the second one produced by the institute.

Like the 2002 study before it, the new survey found a link between how well a state scores in the index and its per-capita income. Moreover, the researchers contend that the more a state invests in technology and develops technology businesses, the better for its citizens.

"If they don't become part of the knowledge economy, they risk some very large dislocations among their population," Ross DeVol, director of regional economics for the Milken Institute, told Reuters.

The same states occupied the top five and bottom five spots as in the last index, though in slightly different order. California rose to No. 2, while Colorado slipped to No 3.

Massachusetts was the only state to score higher than 80 out of 100 and was well ahead of California, while less than 1 point separated California from No. 4 Maryland.

At the bottom of the table, Arkansas traded places with Mississippi, now last in the nation with a score just over half of the national average.

Rhode Island made the biggest leap, coming 11th in the new survey from 21st in the 2002 study, while Texas suffered the biggest decline, falling to 23rd from 14th.

"One that was really quite striking to me ... was the state of Texas," DeVol said. "A lot of that relates to the high concentration in communications equipment, telecom equipment ... the implosion in semiconductor orders, how it affected the Austin and Dallas areas, especially."

One trend DeVol said was an area of concern was outsourcing, a hot-button political issue in this election year as small towns across the country complain of their jobs being shipped overseas, where labor is cheaper.

"It is a real issue because some states that have tried to move themselves up the economic development ladder have relied on strategies like bringing in call centers that are increasingly going to India and other locations," he said.

"With the globalization that's occurring with high-speed communications capabilities and the Internet, the world is changing so fast it is very difficult for state officials and even private industry to stay up with these changes."

Among the states coming in near the bottom of the index, DeVol said many had begun initiatives to pull themselves up and increase their focus on high technology. He cited efforts in Hawaii to increase research and development, and in Louisiana to establish development clusters as good examples.

"What it comes down to is putting together a strategy and sticking to it over the long term," DeVol said.

© Reuters