Colorado Ranks Third in PPI's "State New Economy Index"
State has Most Educated Workforce in the Nation
The Progressive Policy Institute, a think tank affiliated with the Democratic Leadership Council, released a report today, The State New Economy Index: Benchmarking Economic Transformation in the States, which assesses the degree to which each of the 50 states is making the transition to compete in the Information Age.
Colorado ranked third in preparedness for the technology-driven New Economy. The report ranks each state based on 17 New Economy indicators from five categories: knowledge jobs, globalization, economic dynamism, the digital economy, and innovation capacity. Colorado was among the top five states in the categories of workforce education, high-tech jobs, managerial and professional jobs, online population, initial public (stock) offerings, job churning and venture capital investment.
“The highest ranking states in the Index tend to have much more in common than just a large number of high profile, high-tech firms,” said PPI President Will Marshall. “In addition to being at the forefront of the information technology revolution, they also tend to have highly educated workforces, globally-oriented manufacturers, solid infrastructures for innovation, and dynamic business environments creating large numbers of jobs in fast-growing companies.”
Regionally, the report found the New Economy has taken hold most strongly in the Northeast, mid-Atlantic, Mountain West, and Pacific states: 17 of the top 20 states in the Index are in these four regions. In contrast, 17 of the 20 states most firmly rooted in the old economy are in the Midwest, Great Plains, and the South.
The Top Five States: 1) Massachusetts; 2) California; 3) Colorado; 4) Washington; 5) Connecticut. The Bottom Five: 46) Montana; 47) Louisiana; 48) West Virginia; 49) Arkansas; 50) Mississippi.
The report concludes that at this point many states’ rankings reflect long-standing and built-in social and economic features, not the wisdom or folly of particular public policies or political leadership.
New Policies for the New Economy
The report argues that in the New Economy, traditional goals and approaches to economic development need to give way to new ones.
“In the New Economy, states need to shift their focus from job creation to income growth and expanded economic opportunity” write authors Robert D. Atkinson, Randolph H. Court, and Joseph M. Ward. To do this, states need to invest in the foundations of success in the New Economy: good public education, support for R&D, availability of job-specific skills training, good quality of life, and quality government, rather than simply provide corporate tax subsidies and giveaways.
Specifically, the report advises states to:
Co-invest with industry in the skills of the workforce. Policy proposals include supporting industry-led regional skills alliances, and rationalizing programs funded under the 1998 Workforce Investment Act.Co-invest in an infrastructure for innovation. Recommendations include boosting R&D tax credits, and efforts to link industry, universities, and government laboratories.Promote innovative, customer-oriented, “digital” government. The bottom line: state governments should be at the forefront of providing government services online, such as motor vehicle registration renewals.Foster the transformation to a digital economy. Recommendations for states include facilitating widespread use of digital signatures, and establishing a uniform legal framework for electronic commerce. Colorado has already taken one important step with the passage last session of HB 1337. Rep. Bob Hagedorn’s (D-Aurora) initiative promotes on-line business-to-government or citizen-to-government interactions aimed at providing taxpayers higher quality services, 24 hour/7 day accessibility and lower costs. Maybe even more important, a “digitized” state government gives citizens and businesses more compelling reasons to get on-line, further speeding Colorado's transition to the New Economy.Foster civic collaboration. Policy recommendations include forming economic policy councils, to bring together business, government, labor, and higher education to develop creative economic development strategies. For a hard copy of The State New Economy Index report, HB 1337, or other information on the Colorado Democratic Leadership Council, please e-mail Jim Gibson.