Mass. Tops List Of Most Competitive States | High scores in technology, business incubation and human resources put state over the top
Despite ranking 34th in government and fiscal policy, 41st in infrastructure and 43rd in environmental policy, Massachusetts topped the Beacon Hill Institute for Public Policy Research’s eighth annual competitiveness report after coming in second last year.
New Hampshire, which ranked ninth in last year’s report, slipped to 17th this year, leaving Massachusetts the only New England state to make the top 10. Behind the Bay State in the top 10 were Utah, North Dakota, Colorado, Idaho, Washington, Minnesota, Oregon, Wyoming and Montana.
Along with Massachusetts and New Hampshire, two other states — Vermont at 13th and Connecticut at 21st — made it to the top half of the list. Maine came in at 26 and Rhode Island ranked 31st.
The ranking is an index based on 43 indicators organized into eight sub-indexes by the institute, which is based at Suffolk University in Boston. States are ranked on a scale of one to 10 for each indicator, and while Massachusetts fared poorly in the government and fiscal policy, infrastructure and environmental policy indexes, it was at or very near the top in the security, human resources, technology, business incubation and openness indexes.
Several states that scored highly in government and fiscal policy wound up at the bottom of the ranking. Florida, Tennessee, Indiana, Georgia and Mississippi were all in the top 10 for government and fiscal policy. Mississippi was dead last in the overall ranking, however. Florida, which ranked No. 1 in government and fiscal policy, ranked 32nd overall, suggesting that being fiscally conservative has its limits.
“Low tax states do not always show up well,” said Frank Conte, the institute’s director of communications and information systems and one of the report’s authors. “Taxes and spending do not signify much. What the study looks at is a state’s ability to attract growth and high incomes for its residents.”
And judging by the top 10, the number of residents in a state doesn’t count for much either.
“More is not necessarily better,” Conte said. “We’re looking at the abilities and capabilities of the people who are there. How healthy are they? How many are scientists and engineers? How many scientists and engineers do we train?”
Momentum On Roads
The institute measures a state’s competitiveness in technology by the number of grants awarded by the National Institutes of Health, new patents and its high tech workforce. Massachusetts ranked No. 1 in venture capital invested per capita, which makes it “the most attractive state in the union for startups,” the institute said.
According to the institute, Massachusetts’ ranking was helped by the number of residents that now have health care coverage as a result of the state’s health care reform law. It was also helped by an overall decrease in crime, which translated into an improved security ranking.
Paul Matthews, executive director of the Westborough-based 495/MetroWest Corridor Partnership, an economic development and environmental policy organization, said the state’s poor infrastructure ranking points to problems that are both readily apparent and frequently forgotten.
“I think it’s recognized by all quarters at this point that our infrastructure requires funding beyond what has been allocated,” Matthews said. “We’re reaching the point where real momentum is being reached to do that.”
Future Projections
The institute warns, though, that remaining competitive requires foresight for infrastructure development and growth in the ranking’s other key areas.
Jonathan Haughton, a senior economist at the institute and another of the report’s authors, said economic troubles like those the state and nation are facing now “force state policymakers to respond with short term solutions. The key, however, is to pay attention to the factors that contribute to a state’s economic growth over the long term.”
Haughton noted that as a state’s ranking on the competitiveness list improves, so does its standard of living. “If a state gains a point on the index, it will also gain $1,546 in real per capita income per year,” he said.
The institute is scheduled to release its ranking of the nation’s top 50 metropolitan areas in February.
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