This article first appeared in Boston Business Journal, a sister publication of BostInno.
For the fourth year in a row, Massachusetts has the top "innovation economy," according to the Massachusetts Technology Collaborative's Massachusetts Innovation Economy's Annual Index. As usual, Massachusetts squeaked out a win over California, with Pennsylvania and New York landing at No. 3 and No. 4, respectively.
It's no surprise that MassTech, a state economic development agency, continues to rank Massachusetts highly, but the agency's conclusions get some back up from third parties. The California-based Milken Institute has ranked Massachusetts as the most innovative state since 2002. And Bloomberg gave Massachusetts the same title in a December ranking.
This year's MassTech report, the agency's 20th, highlights the state's biotech and software industries as engines of economic activity. Over 65 percent of the $5.8 billion worth of venture capital invested in Massachusetts in 2015 went into those two sectors.
The state's innovation economy, which encompasses areas like financial services, healthcare, biopharma, software, and computer hardware, is also buoyed by a dedication to funding research and development. Massachusetts spent nearly $28 billion on R&D in 2014, placing in No. 2 in the country and ahead of much larger states like Texas and New York.
Roughly 38 percent of Massachusetts residents work in the innovation economy, the highest share of any of the 15 states MassTech included in its ranking.
MassTech also based its ranking off factors like number of patents, federal R&D funding, housing costs, IPO activity and educational attainment of workers.
