Most & Least Innovative States in 2024 (2024)

Innovation is a principal driver of U.S. economic growth, and the U.S. spends more than $600 billion per year on research and development. This has helped the nation rank third out of 132 countries on the Global Innovation Index, behind only Switzerland and Sweden.

Certain states deserve more credit than others for the dominance of the U.S. during the tech era, though. These states continue to grow innovation through investments in education, research and business creation, especially in highly specialized industries.

In order to recognize the nation’s biggest contributors, WalletHub compared the 50 states and the District of Columbia across 25 key indicators of innovation-friendliness. Our data set ranges from the share of STEM professionals to R&D spending per capita to tech-company density.

Main Findings

Most Innovative States

*1=Most Innovative
Note: With the exception of “WalletHub State Innovation Index,” all of the columns in the table above depict the relative rank of that state, where a rank of 1 represents the best conditions for that metric category.

In-Depth Look at the Most Innovative Places

District of Columbia

The District of Columbia actually beats all of the 50 states when it comes to innovation, in large part due to the fields its population works in. D.C. has the highest share of people employed in STEM (science, technology, engineering and math), as well as the highest share of people with STEM degrees. In fact, over 53% of District residents ages 25 and over who have college degrees majored in some form of STEM.

Our nation’s capital also spends a lot of money on innovation, with the highest research and development spending per capita and the highest venture capital funding per capita, leading to the success of many startups.

D.C. is preparing its youth well for innovation, as the District has the highest AP exam participation rate among high school students, at nearly 60%. Students who take AP classes in high school are more prepared for the rigors of college, and may learn more complex math and science skills than they would in normal high school classes.

Massachusetts

Massachusetts, known for innovative schools like MIT, ranks second in the country for innovation. One major contributor is the fact that the state’s tech sector makes up nearly 13% of its total gross state product, one of the highest percentages in the country. Nearly half of the people in the state with college degrees have a STEM degree as well.

In the Bay State, kids are given the math and science skills necessary for innovation from a young age. Massachusetts has the highest eighth-grade math scores in the country, and some of the best science scores, too. High school students participate in AP exams at a high rate, too.

To top things off, Massachusetts ranks as the second-highest in the country when it comes to R&D spending per capita and venture capital funding per capita.

Washington

Washington comes in third place for innovation, and it’s projected to have the highest STEM job demand in the country by 2030. Cities like Seattle and Bellevue are already known as tech hubs, so we will likely see their influence expand in the future. Over 50% of Washingtonians who hold college degrees have STEM degrees, and the state has a large concentration of STEM jobs.

The Evergreen State’s reliance on the tech sector can be seen in tech’s contributions to Washington’s gross state product – nearly 22% of the total. Individuals and companies are also constantly coming up with new products, as Washington has the third-highest number of invention patents per capita.

In addition, Washington leads the country in making sure its residents have access to the internet, with over 92% of people having a broadband internet connection. Expanding access to the internet allows people to seek out the information and resources they need for their future innovation.

Ask the Experts

To help struggling local economies become more like successful tech-centric cities, we turned to a panel of experts for advice on stimulating innovation. Click on the experts’ profiles to read their bios and thoughts on the following key questions:

1. How can state policymakers encourage and facilitate innovation?
2. What can policymakers do to assist those who may lose their jobs or otherwise be displaced by innovation across industries?
3. What skills best equip individuals to be competitive in a changing economic landscape?
4. In evaluating the best states for innovation, what are the top five indicators?
5. What are your thoughts on President Biden’s proposed 2024 budget to boost science and innovation?

Methodology

In order to determine the most and least innovative states, WalletHub compared the 50 states and the District of Columbia across two key dimensions, “Human Capital” and “Innovation Environment.”

We evaluated those dimensions using 25 relevant metrics, which are listed below with their corresponding weights. Each metric was graded on a 100-point scale, with a score of 100 representing the most favorable conditions for innovation.

We then determined each state’s weighted average across all metrics to calculate its “State Innovation Index” and used the resulting scores to rank-order our sample.

Human Capital – Total Points: 50

• Share of STEM Professionals: Double Weight (~14.29 Points)
• Share of Science & Engineering Graduates: Full Weight (~7.14 Points)
  Note: This metric measures the percentage of science- and engineering-degree holders aged 25 and older per total degree holders in the same age group.
• Projected STEM-Job Demand by 2030: Full Weight (~7.14 Points)
  Note: This metric measures the projected number of STEM jobs needed by 2030 per total jobs.
• Scientific-Knowledge Output: Full Weight (~7.14 Points)
  Note: This metric measures the number of peer-reviewed articles published per $1 Million of Academic S&E research and development.
• Eighth-Grade Math & Science Performance: Full Weight (~7.14 Points)
• AP Exam Participation: Full Weight (~7.14 Points)
  Note: This metric measures the percentage of public high-school students in the graduating class who completed one or more Advanced-Placement exams at any point in high school.

Innovation Environment – Total Points: 50

• Share of Technology Companies: Double Weight (~4.55 Points)
  Note: This metric measures the number of technology establishments per total establishments.
• R&D Spending per Capita: Double Weight (~4.55 Points)
  Note: “R&D” refers to research and development.
• R&D Intensity: Full Weight (~2.27 Points)
  Note: This metric measures the ratio of total research and development (R&D) performed to state gross domestic product (GDP).
• Invention Patents per Capita: Full Weight (~2.27 Points)
  Note: Data include utility, design, plant, and reissue patents per million of state population.
• Tech GSP as a Percent of Total State Product: Full Weight (~2.27 Points)
• Net Migration: Full Weight (~2.27 Points)
  Note: This metric measures the net number of people moving to or from a state per 1,000 residents.
• Entrepreneurial Activity: Full Weight (~2.27 Points)
  Note: This metric is based on data from the Kauffman Index of Startup Activity.
• Number of Startups “Accelerated" per Total Number of Start-ups: Full Weight (~2.27 Points)
  Note: An important, if often controversial, factor of growth in the US technology ecosystem is its numerous incubators and accelerators, which support early-stage startups with investment often in exchange for 6 to 10 percent equity stakes.
• Tax-Friendliness: Double Weight (~4.55 Points)
  Note: This metric is based on data from the Tax Foundation’s State Business Tax Climate Index.
• Venture-Capital Funding per Capita: Full Weight (~2.27 Points)
• Average Annual Federal Small-Business Funding per GDP: Full Weight (~2.27 Points)
• Industry-Cluster Strength: Full Weight (~2.27 Points)
  Note: This metric is based on data from the U.S. Cluster Mapping Project. “Industry-Cluster Strength” refers to the level of high employment specialization of a cluster, which is defined by the U.S. Cluster Mapping Project as a “regional concentration of related industries in a particular location.”
• Open Roads & Skies Friendly Laws: Half Weight (~1.14 Points)
• Average Internet Speed: Full Weight (~2.27 Points)
• Share of Households with Internet Access: Full Weight (~2.27 Points)
• Adoption of K–12 Computer Science Standards: Half Weight (~1.14 Points)
  Note: This is a binary metric. A state is considered to have K–12 CS standards if the standards meet all of the following criteria:
  • form a coherent progression that aligns elementary, middle, and high school expectations, and
  • are publicly accessible on the state’s website.

We choose this metric because we consider that most innovation in the future is going to be tech enabled.


• IP Services Exports as a Share of All Services Exports: Full Weight (~2.27 Points)
  Note: This metric measures royalty and license services exports as a share of total state services exports.
• Growth in Total Firms: Full Weight (~2.27 Points)
  Note: This metric captures the rate of increase (or decrease) in the total number of firms in an economy.
• Jobs in New Companies: Double Weight (~4.55 Points)
  Note: This metric measures the share of workers at firms less than 5 years old.

Sources: Data used to create this ranking were collected as of February 28, 2024 from U.S. Census Bureau, Bureau of Labor Statistics, National Science Foundation, National Center for Education Statistics, United States Patent and Trademark Office, Ewing Marion Kauffman Foundation, Gust.com, Tax Foundation, Consumer Technology Association, The U.S. Cluster Mapping Project, Projections Central – State Occupational Projections, The Computing Technology Industry Association, College Board, Broadbandnow.com, Coalition of Services Industries, Economic Innovation Group, Code.org Advocacy Coalition and National Venture Capital Association.

Supporting Video Files:

• YouTube - National (for web embedding)
• YouTube - The District of Columbia (for web embedding)
• Raw video files (for editing into clips)

Important Disclosures