by Lenny Pierce, Research Analyst
The state of Massachusetts has long been considered a premiere global destination for science and technology groups with its ever-present string of top technology companies along the Route 128 corridor and a constantly condensing life science cluster in Kendall Square. The ability of the state to consistently attract and produce some of the most competitive entities in science and technology is a constant reminder of why the state is often considered among the most powerful ecosystems for these industries in the nation. A recent indicator of Massachusetts’ strength in this realm is Milken Institute’s 2014 State Technology and Science Index, in which the state has finished first for the sixth consecutive year. The biennial report ranks U.S. states by their strength in five categories the organization feels most directly contribute to wide scale economic success in the science and technology fields in the U.S. These categories are Human Capital, R&D Inputs, Risk Capital, Workforce and Tech Concentration. The State of Massachusetts placed first in four of these five categories, affording it the first place overall in the study. Below are descriptions of each of the study’s categories that The Commonwealth performed so well in:
Milken’s “Human Capital Investment Composite Index” category assesses the intellectual integrity of a given state’s populace, both in terms of peoples’ average academic achievement and how much public funding is directed toward education. Academic achievement metrics used in this category include the Recent Bachelor’s Degrees in Science and Engineering per 1,000 Civilian Workers, Recent Master’s Degrees in Science and Engineering per 1,000 Civilian Workers and Recent PhD Degrees in Science and Engineering per 1,000 Civilian Workers. This category’s metrics addressing educational funding included Percent Change in Appropriations for Higher Education – in which Massachusetts jumped from 47th in 2010 to 4th in 2012 – and State spending on student aid per capita. 2014 marks the second year that Massachusetts has been #1 in the Human Capital category. The state was bested only by Maryland in 2010 and 2008.
The “Research and Development Inputs Composite Index” examines the degree to which each state’s R&D facilities have the power to draw funding and generate innovation that can then be commercialized and spur economic growth. Metrics that comprised this section included R&D Expenditures on Biomedical Sciences, R&D Expenditures on Engineering and R&D Expenditures on Math & Computer Sciences. They also included National Science Foundation Proposal Funding Rate which a fellow New England region, Rhode Island, has also consistently fared well in. Though Massachusetts has placed first in this category since 2008, Maryland has been right behind it every year. Colorado and California have also been the in the top 5 in this category since 2008.
The “Risk Capital and Entrepreneurial Infrastructure Composite Index” evaluates each state’s capability for turning research efforts into economically viable goods and services. Some of the metrics for this evaluation track increases in VC funding over time such as Increase in Number of Companies Receiving VC Investment and Total Venture Capital Investment Growth. The section also includes Number of Business Incubators per 10,000 Business Establishments – something Massachusetts has plenty of with organizations like MIT Global Startup Lab, Greentown Labs and MassChallenge.
The “Technology and Science Workforce Composite Index” measures the relative size of the high-tech talent base in a state. Metrics included in this index were Intensity of Biomedical Engineers per 100,000 Civilian Workers and Intensity of Computer Programmers per 100,000 Civilian Workers. The state’s consistently strong position in this index is likely due in part to its status as a hotbed for the life science industry. The Technology and Science Workforce Composite Index was another area where Maryland has been competitive with Massachusetts, finishing second behind The Commonwealth in 2014, 2012 and 2010.
The only category where Massachusetts did not place 1st was the Tech Concentration and Dynamism Composite Index, where the state placed 4th, bested by Utah, Washington, and Maryland. Some metrics which comprised this section included Percent of Establishments in High-Tech NAICS Codes, meaning our slightly lower place in category may have more to do with our overall industrial diversity than anything else. Despite not placing 1st, Massachusetts has climbed within the category, finishing in 7th place in 2008 and 2010 and 6th in 2012. Overall, however, Milken’s rankings have once again exhibited the strength of Massachusetts in science and technology industries, bolstering the notion of the state as the premier destination for businesses in these fields.
To subscribe to the CBRE/New England blog, please visit the main page or email a request to email@example.com.