Whenever a new economic report surfaces about Wisconsin, the news usually isn’t very good, whether it be about taxes, our business climate, per-capita income, or Tax Freedom Day. I have blogged extensively about these reports and the latest also shows some critical shortcomings.
The “2008 State New Economy Index” has been released by the nonpartisan groups, the Ewing Marion Kauffman Foundation and the Information Technology and Innovation Foundation.
According to stateline.org, “The groups used 29 indicators to rank each state on how well its economy is structured to compete regionally, as well as globally. States at the top of the list tend to have a high concentration of workers in ‘knowledge jobs’ that require at least a two-year college degree, are at the forefront of the information technology and Internet revolutions and have institutions and residents that embrace the digital economy.”
When it comes to the New Economy, Wisconsin ranks number 33 among the states. The report defines the New Economy as, “a global, entrepreneurial, and knowledge-based economy in which the keys to success lie in the extent to which knowledge, technology, and innovation are embedded in products and services.”
More specifically, the New Ecomony is:
Knowledge-dependent. Knowledge workers have become the largest occupational category.
Global. More goods and services are being traded and exported.
Entrepreneurial. Most, if not all of the job growth in America is derived from companies that are less than five years old.
Rooted in information technologies. IT’s are every where, the most important technology engineering our economy, a key component in almost every sector.
Driven by innovation. Competition is heavily based on the ability to create and adopt new products and business models. As the report states, “Innovative capacity (derived through universities, Research & Development investments, scientists and engineers, and entrepreneurial drive) is increasingly what drives competitive success in the New Economy.”
The Midwest has failed to catch on to the New Economy with the exception of some our neighbors: Illinois (rank number 16), Michigan (rank number 17), and Minnesota (rank number 14).
Why is the “2008 State New Economy Index” important? The report says, “How closely do high scores correlate with economic growth? States that score higher appear to create jobs at a slightly faster rate than lower-ranking states. Higher New Economy scores were positively correlated with higher growth in state per-capita incomes between 2002 and 2006….states that embrace the New Economy can expect to sustain greater per-capita income growth for the foreseeable future.”
Solutions? We must keep our best and brightest here in Wisconsin and we must dramatically improve our business climate.
Here is the complete “2008 State New Economy Index.”
