Who produces the State Technology and Science Index (STSI)?

The index is produced by the staff of the Milken Institute Center for Regional Economics (CRE). The full list of authors is available here.

What is the motivation for producing this index?

CRE promotes prosperity and sustainable growth by supporting improvements in regional competitiveness. Because the link between innovation and economic growth is a vital component of competitive advantage, the index focuses on the pathways from new ideas to their commercialization. It does so by assessing states' knowledge economies, key science and technology inputs, and the level of output in high-tech industries.

Is this sponsored research?

No. The index is not sponsored by any external organization or third party.

How does the index work?

The index is a composite of five sub-indexes. States are ranked on each sub-index according to data on a set of indicators, and the rankings on each sub-index are averaged to produce the overall index ranking. A detailed explanation of the methodology is available here.

What are the data sources?

The index uses publicly available data from sources such as the National Science Foundation, Bureau of Labor Statistics, and National Center for Education Statistics, as well as several private-sector databases. The full list of indicators is available here.

How can states and other stakeholders use the data?

The index serves as a benchmark of states' science and technology capabilities as well as the broader policy and business ecosystem that contributes to job creation and wage increases benefiting residents of that state.

Why are the rankings broken into tiers?

By dividing the rankings into five tiers, states have a benchmark for comparing themselves with other states that have similar characteristics. States are placed into a specific tier based on whether they fall above or below scores representing 20 percent, 40 percent, 60 percent, or 80 percent of the gap between the top and bottom scores.

What accounts for changes in the rankings?

A change in rank indicates a state is performing better or worse relative to the other 49 states. A state's performance may hold steady but rise or fall in the rankings because of changes in other states. The index presents a snapshot of how state-level science and technology economies compare to one another at a specific time, rather than a long-term study of how individual states are changing over time. And because the index scores are based on rankings, differences in state scores reflect broad differences among states, rather than capabilities or performance in a very specific area. A change in rank indicates a state is performing better or worse relative to the other 49 states, so its performance may hold steady but rise or fall in the rankings because of changes in other states. Moreover, the index uses more than 100 indicators, and many values are calculated using three-year averages. This limits the impact that shifts in any one year can have on the rankings."

Moreover, the index uses more than 100 indicators. Many of these values are calculated using three-year averages, so as to limit the impact that specific changes can have on the rankings. (For example, this tends to occur more frequently when measuring venture capital investment.)

Were there significant changes in the rankings this year?

STSI tends to be relatively static from one year to the next because developing a knowledge-based economy takes time and requires investment in people, institutions, infrastructure, and firms. States that rank highly on the index usually do so consistently because of long-term investments in research, education, or support for business formation. Similarly, disinvestment is unlikely to lead to significant short-term changes in a state's ranking.

The most significant changes this year were:

• Wyoming: rose 8 places, from 39th to 31st; and
• South Carolina: fell 8 places, from 35th to 43rd.

Rankings from previous years can be found here.