Subnational Innovation Rankings & Perspectives

The John A. Volpe National Transportation Systems Center that opened last week on the campus of MIT as part of a 14-acre redevelopment of a U.S. DOT site is emblematic of Massachusetts’ leadership in innovation.

Rendering courtesy of MIT

The Truman Center for National Policy’s “City and State Diplomacy Toolkit” will show you: There are plenty of strong examples of regions not waiting around for their parent states or nations to make connections for them that they could make themselves instead.

Now the states have some new data to carry with them to those international meetings

Earlier this month, the Information Technology & Innovation Foundation (ITIF), in concert with a consortium of other think tanks in the Global Trade and Innovation Policy Alliance (GTIPA), released two new reports on subnational innovation competitiveness: one ranking the States vs. European states and regions, and the other ranking the States vs. Latin American states.

The latter report benchmarks 182 regions of Brazil, Chile, Colombia, Mexico, Peru, and the United States using 13 indicators of “strength in the knowledge economy, in globalization, and in innovation capacity,” says ITIF, including workforce educational attainment, knowledge worker immigration, R&D expenditure, inward FDI, patent output and high-tech exports. It finds the top 47 spots occupied by 47 U.S. states, led by Massachusetts, California, Washington, Maryland and Oregon. Mexico City and São Paulo jump in at Nos. 48 and 49 before No. 50 West Virginia. Then comes Lima, Peru, before Mississippi, Alaska and then Bogotá, Colombia, at No. 54.

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“The strong innovator regions in Colombia are Bogotá and Antioquia [home to Medellin]”, says the ITIF report. “In Chile, the strong innovator regions are Santiago and Antofagasta,” with Magallanes standing out for its educational attainment. In the other countries examined, here are the identified strong innovators:

Mexico: Mexico City and Nuevo León
Peru: Arequipa and Lima (which stand
Brazil: Rio de Janeiro and São Paulo

The report goes on to analyze leading subnational regions in each country within each variable. The inward FDI indicator measures each region’s inward FDI relative to its GDP over a three-year period, finding such states as Maine and Missouri among the U.S. leaders. Compare and contrast these findings with the inward FDI figures reported in July by the Bureau of Economic Analysis.

The ITIF report also notes that subnational data for inward FDI were not available in Colombia, Peru or Chile. Some of that information, however, is available via the Conway Projects Database, which so far this year, for example, has tracked projects from such countries as Denmark, Malaysia, Switzerland, Mexico, the U.S. and Brazil in such Colombian regions as Barranquilla, Bogotá and Cundinamarca. ITIF highlights Amazonas, Paraná, Minas Gerais and São Paulo as the strongest FDI regions in Brazil, while Zacatecas and Baja California Sur stand out in Mexico.

European Comparison

In ITIF’s Transatlantic ranking, the 50 U.S. states were ranked alongside 71 European states in the chosen countries of Austria, Germany, Hungary, Italy, Poland and Sweden. (Those wishing to gain insight into the innovation environment in dynamic places such as Spain, Portugal, Ireland or France will need to turn elsewhere.)

U.S. states (led again by Massachusetts and California with Washington at No. 4) took four of the top 10 overall positions while the German states of Baden-Württemberg (No. 3), Bavaria and Hesse took three and the Swedish regions of Greater Stockholm, West Sweden and South Sweden took the other three. Among the top 50, U.S. states took 22 positions while Germany took 11.

“Regional economies need robust innovation strategies to thrive in the fiercely competitive global marketplace,” said Stephen Ezell, vice president of global innovation policy at ITIF. “As is also true for national economies, sustained development and economic growth at the state level depends on the region’s ability to develop and transfer knowledge and technology, enhance productivity, and foster an adaptive, resilient place in global supply chains.”

Among ITIF’s recommendations: boosting local R&D, entrepreneurship and patent applicaiotns; and advancing initiatives such as the U.S. CHIPS and Science Act with its regional innovation hubs program. “Policymakers should consider unique regional challenges and opportunities to craft region-specific approaches to bolster innovation competitiveness,” said Ezell. “By analyzing this index, policymakers can gain suggestions on the specific policies they should pursue, with special attention to underdeveloped or lagging regions.”