2020 U.S. Innovation Scorecard

Innovation starts with a seed of an idea. It takes an entrepreneur with vision and courage to make that seed blossom into a business that enriches our lives or even provides our livelihood.

Overview

Every year, American entrepreneurs create new technologies that bring us closer together, make us more productive and improve our lives. Their startups and small businesses grow into tech companies that train Americans for jobs that didn't exist years earlier.

To continue creating American jobs, growing our economy and leading the world in innovation, our nation needs state governments to welcome and nurture emerging technologies.

In the 2020 U.S. Innovation Scorecard — the fifth year we've measured states' innovation policies — CTA evaluated all 50 states to determine which are doing the most to foster innovation. We graded states on 12 quantitative and qualitative categories including internet speed and cost, STEM education, diversity and inclusion in the workplace, and support for disruptive technologies including self-driving vehicles, drones and e-scooters.

We then ranked the states in one of four ascending tiers: Modest Innovators, Innovation Adopters, Innovation Leaders and our highest level, Innovation Champions.

Introduction from the Consumer Technology Association (CTA)® President and CEO 

Technology is changing our lives for the better — improving our quality of life and enabling better ways to learn, work and play. And the United States’ technology industry is an economic engine, supporting more than 18 million American jobs — including almost two million jobs created between 2000 and 2018 — and accounting for 12% of U.S. GDP.

I challenge you, as a state policymaker, to find a single business that can run without the innovative products and services that American technology has founded.

We believe that collaborating with business on rulemaking to govern emerging technologies makes America the best country in the world for innovation. The CTA U.S. Innovation Scorecard emphasizes forward-thinking, light-handed policies that are proven to work and help today’s innovators create a better tomorrow.

In this fifth edition of CTA’s U.S. Innovation Scorecard, 15 states earned our highest rank — Innovation Champion — including five first-time Champions. Another 10 states climbed in overall rank, while only seven declined.

Since our last Scorecard in 2018, internet access has improved in all 50 states and self-driving vehicle testing and development have taken off. We also added criteria for how well states welcome 5G connectivity, e-scooters as a transportation option and apprenticeship programs that help build our workforce of the future.

Click through to see how well your state supports innovation. And we of course welcome your feedback, which you may provide at scorecard@cta.tech.

Gary Shapiro
President and CEO, CTA

2020 Innovation Champions

Arizona
Colorado
Indiana
Iowa
Kansas
Maryland
Massachusetts
Michigan
Minnesota
Missouri
Nebraska
New Hampshire
Utah
Virginia
Washington

These 15 states educate their populations in critical scientific and engineering fields, maintain friendly tax policies and give innovators freedom from burdensome rules. 

Methodology

CTA’s Innovation Scorecard is formulated using 12 complementary factors that, in combination, indicate how strongly a state supports innovation. Some of these factors relate to individuals in a state, while others address corporations doing business or employing people there, and others concern the legislative and regulatory environments. All third-party sources and state policy inputs reflect the newest information available as of December 31, 2019.

Categories

Attracts Investment
Attracts Investment

This category measures the amount of venture capital investment and combined government and private-sector research and development. The venture capital investment data comes from the PwC/CB Insights MoneyTree™ Report for the periods Q3 2018 through Q2 2019. R&D investment data comes from the National Science Foundation’s Business Research and Development and Innovation: 2016 (Table 13). The combined normalized scores are graded on a curve and assigned letter grades from A+ to F.

Best & Brightest

This category uses data from the National Right to Work Legal Defense Foundation and Movement Advancement Project to grade whether a state is “right to work” and has LGBTQ non-discrimination laws. The category is bimodal and assigns an A+ to states that allow workers to decide whether to join an established labor union, and an F to states that force workers to participate in and pay dues to unions. Also, states were assigned A+ through F grades based on the presence of state legislation protecting workers from discrimination on the basis of sexual orientation and/or gender identity. The combined normalized scores are assigned a letter grade from A+ to F.

Drones
Drones

CTA policy and research experts assign A+ to F grades based on laws and regulations affecting consumer and commercial drone operations.

Entrepreneurial Activity
Entrepreneurial Activity

Using Quarterly Workforce Indicators data from the U.S. Census Bureau, this category tracks the number of new jobs per capita created from Q3 2011 through Q2 2016 by firms with fewer than 50 employees. States are graded on a curve and assigned letter grades from A+ to F.

Fast Internet
Fast Internet

Grades are assigned based on three components: the percentage of households with internet speeds of at least 10 megabits per second (mbps), the percentage of households with internet speeds of 25 mbps and whether states are creating a regulatory environment to support the rollout of 5G. The internet speed data comes from the Federal Communication Commission’s Internet Access Service Report as of December 2017. CTA utilizes weighted scoring system for this category with 40% of the overall grade is weighted toward 10 mbps households, 40% toward 25 mbps households and 20% toward 5G-friendly policies. The combined normalized scores are graded on a curve from A+ to F.

Grants Advanced Degrees
Grants Advanced Degrees

Using data from the United States Census Bureau’s American Community Survey (2017), this category measures the percentage of a state’s population age 25-years-and-older holding graduate or professional degrees.

Innovation-Friendly Sustainable Policies
Innovation-Friendly Sustainable Policies

CTA policy and research experts assign A+ to F grades based on how laws and regulations meant to protect the environment and encourage positive behaviors — such as recycling of electronics — impact the consumer technology industry. Regulations may inhibit, support or be neutral in how they impact innovation.

Ridesharing and E-Scooters
Ridesharing and E-Scooters

CTA policy and research experts assign grades based on whether state laws allow ridesharing and e-scooters to operate freely, place local restrictions on services, or prevent them from operating altogether. Scores are combined and assigned letter grades ranging from A+ to F.

Self-Driving Vehicles
Self-Driving Vehicles

CTA policy and research experts assign A+ to F grades based on state laws and regulations affecting the development and operation of self-driving vehicles.

Short-Term Rentals
Short-Term Rentals

CTA policy and research experts assign A+ to F grades based on whether state laws allow short-term rentals to operate freely, place some local restrictions on them or prohibit them entirely.

Tax Friendly
Tax Friendly

Using data from the Tax Foundation’s 2019 State Business Tax Climate Index, this grade is derived from numerical scoring data including corporate and individual income taxes, sales tax, unemployment insurance tax and property tax rates. States are graded on a curve and assigned a letter grade from A+ to F.

Tech Workforce
Tech Workforce

This grade is based on the per capita number of technology-related jobs and per capita apprenticeship graduates. The jobs data comes from the Bureau of Labor Statistics’ May 2016 Occupational Employment Statistics Survey; the Apprenticeship data comes from the Department of Labor’s Employment and Training Administration for fiscal year 2018. States are graded on a curve and assigned a letter grade from A+ to F.

Overall Grade

The overall Innovation Scorecard grade captures a state’s overall support for innovation based on the criteria above. Each criterion receives equal weight in the final scoring formula. Final composite scores are then graded on a curve to determine which of the four tiers a state will be ranked in — Modest Innovator, Innovation Adopter, Innovation Leader or Innovation Champion.

Explore the 2020 Results