Ohio falls to 32nd in 'new economy' ranking
Special to the Legal News
Published: January 10, 2013
Ohio fell from 25th to 32nd in a report that ranks states on technology and globalization issues.
The 2012 State New Economy Index, which is published every two years, uses 26 indicators that are divided into five key areas that “best capture what is new about the new economy.” Those areas are knowledge jobs, globalization, economic dynamism, the digital economy and innovation capacity.
Ohio ranked 25th in the 2010 report, but dropped to 32nd in the report released last month by the Information Technology and Innovation Foundation, a Washington, D.C.-based nonprofit think tank.
Ohio’s 2010 ranking of 25th was its highest in the five reports released since the project began in 1999. Massachusetts has ranked first each time.
In the new report, Ohio was cited for its rise in the rankings in the category of health information technology.
Ohio climbed 22 spots: from 26th in the 2010 report to fourth in the new report.
“Ohio’s rise ... reflect(s) collaborate efforts between (its) state government and private health-care providers,” the report notes.
Second in the new rankings, behind Massachusetts, is Delaware, followed by Washington, California, Maryland, Virginia, Colorado, Utah, Connecticut and New Jersey.
At the bottom of the rankings is Mississippi, preceded by West Virginia, Arkansas, Oklahoma, Alabama, Kentucky and Louisiana.
The report notes that for the U.S. to be competitive in the global marketplace, “one key will be to compete more on the basis of innovation and entrepreneurship and less on cost.”
It says success means “among other things, having a workforce and jobs based on higher skills, strong global connections, dynamic firms, including strong, high-growth startups, industries and individuals embracing digital technologies and strong capabilities in technological innovation.”
The report also notes that many Midwestern states have depended on natural resources or on mass-production manufacturing and “relied on low costs rather than innovative capacity to gain competitive advantage. But, in the new economy, innovative capacity (derived through universities, research and development investments and entrepreneurial capabilities) is increasingly the driver of competitive success.”
The report states that the U.S. has not yet had a strong recovery from the recession because of its decline in the global marketplace.
“The failure of the United States to adapt to a global economy that is evermore dependent on knowledge and innovation for growth — the so-called ‘New Economy’ — is causing traded sector firms, and manufacturers in particular, to look to other, more competitive countries when it comes to choosing locations. And this loss of traded sector activity, including jobs and investment, holds back the entire U.S. economy and its component state economies as well,” the report notes.
The report suggests the U.S. needs to expand its innovation and entrepreneurship.
“With a globalized economy enabling easy access to low-cost production systems in nations like China, India and Mexico, U.S. competitive advantage will continue to be found in making things and providing traded services that other nations are unable to make or provide as easily or as efficiently,” the report notes.
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