Reporter's Notebook

Nicholas Shannon Kulmac can be reached at nkulmac@vbjusa.com

Washington State: The New Economy?

Charles Darwin once wrote, “It is not the strongest of the species that survive, nor the most intelligent – but the ones most responsive to change” – that’s the idea behind a report released this week from the Ewing Marion Kauffman Foundation and The Information Technology and Innovation Foundation (ITIF) entitled “The 2010 State New Economy Index.”

Like many economic indexes, this is a report that pits the 50 states against one another by weighing a variety of economic indicators. However, due to the nature of the 26 indicators authors of the report used, this index stands out.

The report, which has the state of Washington ranked number two overall, was released to coincide with Global Entrepreneurship Week – a worldwide initiative aimed at inspiring young people to embrace imagination, innovation and creativity.

Authors of the study said it “measures the extent to which state economies are knowledge-based, globalized, entrepreneurial, IT-driven and innovation-based. In other words, to what degree state economies’ structures and operations match the ideal structure of the new economy.”

So how exactly did Washington end up second only to Massachusetts?

The authors of the report said, “Washington scores high due not only to its strength in software (in no small part due to Microsoft) and aviation (Boeing), but also because of the entrepreneurial hotbed of activity that has developed in the Puget Sound region, and very strong use of digital technologies by all sectors.”

The state of Washington appeared in the top five in a number of indicators including but not limited to:

- The value of exports per manufacturing and service worker (3)

- Internet users as a share of population (3)

- Percentage of farmers using the Internet for business (1)

- Scientists and engineers as a percentage of the workforce (2)

- Movement toward a green economy (3)

Robert Litan, vice president of research and policy at the Kauffman Foundation had this to say about the results of the study:

“The United States is lagging, and that lack of innovation-based vitality has contributed to our continuing recession,” said Litan. ”States need to concentrate on achieving new economy success factors and providing the entrepreneurial resources and access that are critical to boosting competitiveness within the global marketplace.”

Go to http://www.kauffman.org/uploadedfiles/snei_2010_report.pdf to read the report in full.