2023’s Most And Least Innovative States

April 20, 2023

With the U.S. spending over $600 billion per year on R&D, the personal-finance website WalletHub today released its report on 2023’s Most & Least Innovative States, as well as expert commentary.

In order to give credit to the states that have contributed the most to America’s innovative success, WalletHub compared the 50 states and the District of Columbia across 22 key metrics. The data set ranges from share of STEM professionals to R&D spending per capita.

Most Innovative States

1. District of Columbia
2. Massachusetts
3. Washington
4. Maryland
5. California
6. Colorado
7. Virginia
8. Delaware
9. New Hampshire
10. New Jersey

Least Innovative States

42. Kentucky
43. Iowa
44. Nebraska
45. South Dakota
46. Oklahoma
47. Arkansas
48. West Virginia
49. North Dakota
50. Louisiana
51. Mississippi

Key Stats

The District of Columbia has the highest share of STEM professionals, 11.49 percent, which is 3.4 times higher than in Mississippi, the lowest at 3.34 percent.
The District of Columbia has the highest share of technology companies, 8.41 percent, which is 3.2 times higher than in South Dakota, the lowest at 2.62 percent.
New Mexico has the highest research and development (R&D) intensity, 7.47 percent, which is 12.2 times higher than in Louisiana, the lowest at 0.61 percent.

To view the full report and your state or the District’s rank, please click HERE.

Expert Commentary

How can state policymakers encourage and facilitate innovation?

“One simple thing is to end or limit non-compete clauses like California has. Simply allow innovative and creative people to apply their talents unimpeded by multi-year non-compete clauses.

“Investing in education, particularly K-12 but also at the University level, it is no accident that innovative ecosystems develop in states with strong education systems and research universities. These institutions build strong capable modern workforces that attract capital, and jobs and create innovations. The benefits do not happen overnight, in fact, they take years if not decades, but consider what The UC’s or the University of Texas at Austin have meant for the development of premier innovative ecosystems.

“Stay out of the way – do not try and manage the process. You do not know how to, nor are your cronies likely to actually have winning ideas. The government’s job is to provide the basics, such as an educated workforce, not pick winners.”

— David L. Deeds – Professor, The University of St. Thomas

“I think the first thing that policymakers need to do is invest in innovation. Most of this investment will need to be, at least initially, in infrastructure. When you look at, essentially any state, most of the landmass is rural areas. These are some of the most technologically deficient areas and ones that need strong investment. The second thing that policymakers need to invest in is the innovators. Finding ways to either educate or train skilled labor to 1) innovate or 2) operate the innovations will become crucial for the sustainability of any initiatives.”

— Sean Walker Ph.D., MBA – Interim Chair, MMIS; Chair, University Faculty Council (2021-2023 AY); Professor, University of Tennessee at Martin

What can policymakers do to assist those who may lose their jobs or otherwise be displaced by innovation across industries?

“For people who lose their jobs, policymakers are best advised to enable market-based job training mechanisms and programs. Public money to support startup job training programs, like short-term coding schools, should be evaluated on the merits of the outcomes they create. Programs that lead to career dead ends or that train for skills not required by the modern workplace should be terminated.”

— Thomas N. Duening – El Pomar Chair for Business & Entrepreneurship, Associate Professor; Research Director, EPIIC Venture Attractor, University of Colorado Colorado Springs

“Think differently. Forget about typical job placement programs that focus on posting openings for unemployed individuals and concentrate on the hiring needs of firms. What types of skills do these organizations actually need and how can policymakers help facilitate the employment process? This could include collaborating with existing organizations, such as schools and colleges, to develop innovative training programs, as well as creating entirely new ways to help those displaced by innovation acquire the knowledge, skills, and abilities required to build a new career in this dynamic and competitive economy.”

— Bruce Bachenheimer – Clinical Professor, Pace University

What skills best equip individuals to be competitive in a changing economic landscape?

“I know the immediate response is always computers and technology. But many opportunities for traditional ‘blue collar’ jobs require valuable skills and pay well to support the necessary infrastructure these new industries will require. Opportunities range from offering these services directly to being the broker for such services. And of course, some services will also be necessary – for instance, in health care, social welfare, and education – regardless of what the industry driver happens to be.”

— Paul Miesing, Ph.D. – Professor Emeritus; Founding Director of the Center for Advancement & Understanding of Social Enterprises, University at Albany

“Any skill(s) that is(are) not job specific. You want to identify skills that can transcend jobs, organizations, and even industries. Effective communication, leadership, teamwork, problem-solving, critical thinking, conflict resolution, being trainable, and proficiency in technology are some of the most important skills that you could take with you regardless of the job or organization.”

— Sean Walker Ph.D., MBA – Interim Chair, MMIS; Chair, University Faculty Council (2021-2023 AY); Professor, University of Tennessee at Martin