The Milken Institute's assessment of California's position in technology and science is based on the state's performance in five composite indexes, the first of which is Research and Development Inputs (RDI). The RDI Composite Index score is derived by averaging each state's performance in 18 indicators. The three basic types of R&D funding (academic, industry, and federal) are assigned weights of 1.15, 6.04, and 2.81, respectively. This adjustment is necessary to appropriately capture the differences in funding levels among the three sources. The component data is collected from various agencies and compiled by the Milken Institute.
The indicator for federal research and development dollars per capita is calculated by dividing each state's federal R&D total by its population. Federal R&D is the sum of all spending for basic and applied research in projects pertaining to national defense, health, space, technology, energy, and general science. The National Science Foundation collects the data. Population figures come from the U.S. Census Bureau.
This indicator measures each state's level of commercial industry financial support for R&D adjusted for total population. The indicator is calculated by totaling the amount each state's nonfarm industry sector spends on R&D and dividing the sum by population. Industry R&D is the sum of all amounts spent by corporations on basic and applied research, including money spent by corporations on federally funded R&D centers. The National Science Foundation provides spending data. Population data comes from the U.S. Census Bureau.
Academic research and development dollars per capita is calculated by totaling the amount of money spent on R&D by each state's colleges and universities and dividing that sum by the state's population. All research, basic and applied, performed by colleges and universities may be funded by a combination of federal, industry, and academic sources; that data is collected by the National Science Foundation. The U.S. Census Bureau collects population statistics. R&D figures reported by academic institutions from federal sources will differ from those reported by the federal government for academic institutions because the funds are not necessarily spent in the same year they are awarded.
This indicator shows the dollar amount of funding awarded by the National Science Foundation (NSF) per $100,000 of each state's gross state product (GSP). The NSF is an independent agency of the U.S. government that funds research and education in science and engineering through grants, contracts, and cooperative agreements. The largest beneficiaries of NSF awards are universities and nonprofit nonacademic institutions, such as museums and research laboratories. Data on NSF funding comes from the NSF itself. The Bureau of Economic Analysis in the U.S. Department of Commerce provides GSP figures.
This indicator is calculated by deriving the dollar amount of funds awarded by the NSF specifically for research for every $100,000 of GSP. As discussed, the NSF is an independent agency of the U.S. government that funds research and education in science and engineering through grants, contracts, and cooperative agreements. The largest beneficiaries are universities and nonprofit nonacademic institutions, such as museums and research laboratories. The data is provided by the NSF. GSP data is collected by the Bureau of Economic Analysis in the U.S. Department of Commerce. The difference between NSF funding, described on the previous page, and NSF research funding is that the former is more inclusive, representing funds awarded for research and education, while this component isolates funding for research only.
R&D expenditures on engineering are shown in dollars per capita. It is calculated by totaling the funds spent at doctorate-granting institutions on basic and applied engineering programs and dividing the sum by each state's population. All recognized engineering programs that spend funds on research are accounted for here. The data is collected by the Division of Science Resources Studies of the National Science Foundation. Population statistics are recorded by the U.S. Census Bureau.
The indicator for R&D expenditures on physical sciences is measured in dollars per capita. It is calculated by dividing the statewide funds spent at doctorate-granting universities on basic and applied physical sciences programs by each state's respective population. All physical science research programs, from mathematics and physics to astronomy and materials research, are accounted for here. The Division of Science Resources Studies of the National Science Foundation collects this data. The U.S. Census Bureau collects the population statistics.
R&D expenditures on environmental sciences are measured in dollars per capita. Figures are calculated by dividing the statewide funding at doctorate-granting universities on basic and applied environmental science programs by each state's respective population. All funded research programs, from studies on environmental complexity to analysis of climate change, are captured in the data, collected by the Division of Science Resources Studies of the National Science Foundation. The U.S. Census Bureau provides the population statistics.
The indicator for R&D expenditures on math and computer science is expressed in dollars per capita. It is calculated by dividing statewide funding at doctorate-granting universities on basic and applied math and computer science programs by each state's respective population. All math and computer science programs are included here, as determined by the Division of Science Resources Studies of the National Science Foundation. The U.S. Census Bureau collects population statistics.
The indicator for R&D expenditures on life sciences is measured in dollars per capita. It is calculated by dividing the statewide funding spent at doctorate-granting universities on basic and applied life sciences programs by each state's respective population. All funded life science research programs, be they in biology, physical anthropology, oceanography, or horticulture, are accounted for here. The Division of Science Resources Studies of the National Science Foundation collects the data. The U.S. Census Bureau provides state population statistics.
The indicator for R&D expenditures on agricultural sciences is measured in dollars per capita. It is calculated by dividing the statewide funding spent at doctorate-granting universities on basic and applied agricultural science programs by each state's respective population. According to NSF classifications, 12 scientific disciplines make up agricultural sciences, including animal sciences, plant sciences, soil sciences, and forestry. The data is collected by the National Center for Science and Engineering Statistics (formerly the Division of Science Resources Studies) of the National Science Foundation. The U.S. Census Bureau collects state population statistics.
The indicator for R&D expenditures on biomedical sciences is measured in dollars per capita. It is calculated by dividing the statewide funding spent at doctorate-granting universities on basic and applied biology and medical science programs by each state's population. Research fields in this category include biochemistry, molecular biology, genetics, immunology, clinical medicine, and pharmacy. The data is collected by the National Center for Science and Engineering Statistics (formerly the Division of Science Resources Studies) of the National Science Foundation. The U.S. Census Bureau provides the population statistics.
Here and on the following five pages, R&D inputs are not evaluated on a per capita basis, but according to larger base figures. The indicator for Small Business Technology Transfer (STTR) awards per 10,000 businesses is calculated by taking the average of the number of STTR awards in each state for the years 2014-2016 and dividing the result by the average number of business establishments in each state for those three years, times 10,000. STTR awards are the total of Phase I and Phase II federally funded research grants to small businesses and nonprofit research institutions with fewer than 500 employees. The Small Business Administration (SBA) collects STTR award data, and the U.S. Census Bureau collects data on the number of establishments.
The indicator for Small Business Technology Transfer (STTR) award dollars per $1 million of GSP is calculated by taking the average amount of STTR awards won during the years 2015-2017 the latest data available when our calculations were completed), and dividing the result by each state's respective average GSP for those three years. STTR awards are the total of Phase I and Phase II federally funded research awards granted to small businesses and nonprofit research institutions with fewer than 500 employees. The Small Business Administration (SBA) collects STTR award data. The U.S. Department of Commerce collects GSP data.
The indicator for Small Business Innovation Research (SBIR) awards per 100,000 residents is derived by taking the average number of annual awards received by each state from 2014-2016 and dividing that by the average state population for those three years, times 100,000. Like STTR awards, SBIR awards are split into Phase I and Phase II, and this component pools both phases. SBIR awards fund a small enterprise's often costly startup and development stages as well as encouraging the commercialization of research findings. The Small Business Administration (SBA) collects SBIR awards data. The U.S. Census Bureau collects population figures.
The indicator for Phase I SBIR awards per 10,000 businesses is calculated by adding the number of Phase I awards per state and dividing them by units of 10,000 business establishments active in the state. This calculation allows us to derive a standard measurement. Phase I SBIR awards data are collected by the NSF's Experimental Program to Stimulate Competitive Research (EPSCoR). The U.S. Census Bureau collects data on the number of business establishments.
This indicator is calculated by totaling the number of Phase II awards per state and dividing them by units of 10,000 business establishments active in the state. This calculation allows us to derive a standard measurement. Phase II SBIR awards data is collected by the NSF's Experimental Program to Stimulate Competitive Research (EPSCoR). Data on the number of business establishments are collected by the U.S. Census Bureau.
This indicator is calculated by taking the total number of competitive NSF awards granted in 2017 and dividing it by the total number of competitive NSF proposals submitted. Most NSF funding opportunities are in the areas of biology, computer sciences, education, engineering, geosciences, physical sciences, and social and behavioral sciences. Data on competitive NSF proposals and awards are collected by the Experimental Program to Stimulate Competitive Research (EPSCoR), a division of the NSF.
The indicator for total venture capital investment growth is calculated by taking total VC investment for each state in 2016-2017, dividing it by total VC investment for the previous year, and multiplying the result by 100. (VC refers to specially accumulated funds invested in or available for investment in a new or unproven business endeavor. Venture capital is also referred to as "risk capital" in recognition of its high risk coefficient.) VC data used in this report is from the PricewaterhouseCoopers/National Venture Capital Association MoneyTree Report, based on data from Thomson Reuters.
The Risk Capital and Entrepreneurial Infrastructure (RCEI) Composite Index is the second major component of the State Technology and Science Index. The RCEI measures each state's entrepreneurial capacity by examining such indicators as venture capital investment, IPO activity, business starts, and patent issuance. VC investment in the cutting-edge fields of clean technology and nanotechnology was first included in the 2008 index. This year, sum of equity invested in green technologies was added to reflect the current shift in the high-tech industry toward clean tech. A state's score on the RCEI Composite Index is calculated by totaling its score on each individual RCEI indicator and dividing it by the number of indicators. (Scores are based on state rankings.) In the pages that follow, we will describe the individual components that make up the RCEI and discuss California's performance in each category.
The indicator for total venture capital investment growth is calculated by taking total VC investment for each state in 2012, dividing it by total VC investment for the previous year, and multiplying the result by 100. (VC refers to specially accumulated funds invested in or available for investment in a new or unproven business endeavor. Venture capital is also referred to as "risk capital" in recognition of its high risk coefficient.) VC data used in this report is from the PricewaterhouseCoopers/National Venture Capital Association MoneyTree Report, based on data from Thomson Reuters.
The indicator represents the number of companies that received venture capital funding between 2016-2017 in each state, normalized by increments of 10,000 business establishments of all kinds. Data on the number of companies receiving VC funding were provided by PricewaterhouseCoopers/National Venture Capital Association MoneyTree Report, based on data from Thomson Reuters; data on the total number of business establishments came from the U.S. Census Bureau.
Growth in the number of companies receiving venture capital investment was calculated by comparing the number of companies that received VC funding in 2016-2017. This variable takes into consideration all firms, small and large, that received any VC funding. Data is provided by the PricewaterhouseCoopers/National Venture Capital Association MoneyTreeâ„¢ Report, based on data from Thomson Reuters.
Growth in the number of companies receiving venture capital investment was calculated by comparing the number of companies that received VC funding in 2011 to the number in 2012. This variable takes into consideration all firms, small and large, that received any VC funding. Data is provided by the PricewaterhouseCoopers/National Venture Capital Association MoneyTreeâ„¢ Report, based on data from Thomson Reuters.
The indicator for venture capital investment as a percentage of gross state product is calculated by dividing the dollar amount of each state's venture capital investments by its respective GSP. Monitoring VC investment as a percentage of GSP allows us to analyze VC's flow and strength in terms of the total state economy. VC data is from PricewaterhouseCoopers/National Venture Capital Association MoneyTree(tm) Report based on data from Thomson Reuters. GSP data is collected by the U.S. Department of Commerce.
The number of business incubators per 10,000 business establishments is calculated by determining the total number of incubators in each state and dividing by that state's population of business establishments, tallied in increments of 10,000. Data on the number of incubators are provided by the National Business Incubation Association (NBIA). Although the NBIA data set is the most accurate, the association estimates that it may only account for half of all U.S. incubators, so the reported figures are likely conservative and collected through a live list. Data on the number of business establishments by state is collected by the U.S. Census Bureau.
This indicator is calculated by determining the number of patents, assigned and unassigned, issued to individuals in a state and then dividing that sum by the respective state's population (in increments of 100,000 residents). Patent documents included in this indicator are utility, design, plant, and reissue patents; defensive publications; and statutory invention registrations. Most patents granted in the United States are utility patents, or patents for invention. The U.S. Patent and Trademark Office collect patent data, while state population figures are collected by the U.S. Census Bureau.
The indicator for the average annual Small Business Investment Company program funds disbursed per $1,000 of GSP is calculated by taking the annual average of all SBIC funds invested in 2015-2017, and dividing that amount by each state's GSP times 1,000. Program data is collected by the Small Business Administration (SBA). GSP figures are collected by the U.S. Department of Commerce. The SBIC program was created in 1958 by Congress as a facilitating agency between lenders and borrowers.
This indicator is calculated by finding the difference between employers recorded by the U.S. Census Bureau, Small Business Administration, and U.S. Department of Labor at the end of fiscal year 2015 and those recorded at the end of FY 2016. The totals for each state are then divided by 100,000 increments of the state's population. The figure encompasses businesses with at least one employee that began operation during the time period evaluated. The U.S. Census Bureau collects the states' population figures.
The indicator for initial public offering (IPO) proceeds as a percentage of gross state product is calculated by totaling the dollar amount raised in each state by companies that issued publicly traded shares in an initial offering in 2015-2017. These figures are then divided by the corresponding state's GSP. An IPO is a company's first sale of stock to the public. Selling shares to the public allows companies to raise capital to meet corporate goals and for risk capitalists to cash in on their investment. IPO data is provided by the Securities Data Corporation and Thomson Financial. GSP figures are collected by the U.S. Department of Commerce.
Clean tech seeks to minimize environmental damage from human activity and energy use and to improve the productivity and responsible use of natural resources. Clean technology refers to renewable energy sources like wind turbines, solar panels, and waste-to-energy enclosures, as well as improving conventional methods with techniques like coal gasification. Green technology seeks to improve methods, techniques, and use of materials that are environmentally friendly to conserve natural resources, increase efficiencies, and reduce waste and pollution from production and consumption. Green technology refers to investments in sustainable products and processes; alternative fuels and new means of generating energy and increasing energy efficiency are examples.
This indicator is calculated by totaling the dollar amount of venture capital investment in both clean and green technology over the period 2015-2017, and then dividing by the corresponding GSPs. VC data is provided by Pitchbook. The U.S. Department of Commerce collects GSP figures.
2013 is the first year that this indicator was included in the State Tech and Science Index. Biotechnology develops products that help improve lives and protect the planet through the life sciences. Modern biotechnology provides breakthrough products and technologies to combat diseases, and improve quality of life. This indicator is calculated by totaling the dollar amount of venture capital investment in biotechnology, then dividing by the corresponding GSPs. VC data is provided by Pitchbook, while the U.S. Department of Commerce collects GSP figures.
The third major index measuring each state's position in technology and science is the Human Capital Investment Composite Index. This composite is made up of 18 indicators that comprehensively assess a state's human capital attainments, especially in science and engineering fields. The composite index is calculated by totaling each state's scores (which are based on rankings) and dividing by the number of indicators. Data are collected from a variety of sources and compiled by the Milken Institute.
This indicator provides a broad measure of higher educational attainment by a state's population. It is calculated by adding up the number of residents 25 and older with qualifying degrees and dividing that figure by the state's entire population in that age group. This demographic cohort was selected because current trends show that people are either starting college at a later age or taking longer than the traditional four years to complete a bachelor's degree. The U.S. Department of Education provides bachelor's degree data. The U.S. Census Bureau provides population numbers.
This indicator measures the percentage of the population with a master's degree or higher, including professional degrees and doctorates. It is calculated by totaling the number of people 25 and older with an advanced degree, and then dividing by the total population 25 and older. That age cohort was selected because Americans are taking longer than four years to complete a bachelor's degree and taking more time between completing their bachelor's and starting their advanced degrees. Advanced-degree data come from the U.S. Department of Education. Population numbers are provided by the Census Bureau.
This indicator is calculated by determining the number of residents age 25 and older who have attained a Ph.D., then dividing it by the total population 25 and older. This age cohort was selected because Americans are taking longer than four years to complete bachelor's degrees and taking more time between completing their bachelor's and starting an advanced degree. Ph.D. data come from the U.S. Department of Education. The Census Bureau provides population numbers.
This indicator quantifies the percentage of graduate students in science, engineering, and health. It measures the degree to which a state is training people with skills specific to those fields. The indicator is calculated by taking the number of individuals in that age cohort enrolled in each state's science, engineering, and health graduate studies programs and dividing that number by each state's population. Graduate students have a bachelor's degree and are pursuing a master's or Ph.D. Data on the number of students in graduate schools in those fields are collected by the NSF's Experimental Program to Stimulate Competitive Research. Population numbers are from the U.S. Census Bureau.
Per capita state spending on student aid is calculated by taking the total amount spent by each state on student aid and dividing by the state's total population. Student aid is defined as funds spent by a state on any form of financial assistance for a student to attend its colleges, universities, or research institutions. Data on student aid come from the National Science Foundation's EPSCoR division. The U.S. Census Bureau collects population figures.
This indicator measures each state's average verbal scores on the Scholastic Aptitude Test (SAT), the most widely used form of college admissions testing. The indicator is calculated by averaging the verbal scores reported by each high school in each state. The SAT is composed of three sections, covering verbal (critical reading), math, and writing skills. We focus on the first two sections because of their historical usage. Individually, verbal and math are worth 800 points each, for a maximum combined score of 1600. SAT data is collected by the Experimental Program to Stimulate Competitive Research at the NSF.
This indicator measures how well each state's high school students perform on the math portion of the SAT, the most widely used form of college admissions testing. The indicator is calculated by averaging the math scores reported by each high school in each state. The SAT math section is worth a possible 800 points. Data on SAT scores is collected by EPSCoR, a division of the National Science Foundation.
The indicator for the average American College Testing Assessment (ACT) scores measures state-based performance in this college admissions test. The indicator is calculated by averaging the composite ACT scores reported by each high school in each state. The ACT is composed of four sections: English, mathematics, reading, and science reasoning. The test is scored on a scale of 1 to 36, with 36 being the highest possible score. ACT score data is provided by EPSCoR.
This indicator is calculated by taking the amount each state spends on higher education and dividing it by state population. Appropriations for higher education include the money spent on faculty and staff wages, building maintenance, athletic programs, and other allocations for the day-to-day operations of colleges and universities. EPSCoR provides state appropriations data, and population numbers come from the U.S. Census Bureau.
This indicator measures increases or decreases in per capita state spending on higher education. The indicator is calculated by taking the amount each state set aside for higher education in 2016-2017 and determining upward or downward changes. Appropriations for higher education include the money spent on faculty and staff wages, building maintenance, athletic programs, and various other allocations that pay for the day-to-day operations of a state's colleges and universities. State appropriations data is provided by EPSCoR, and population numbers come from the U.S. Census Bureau.
This indicator measures a state's intensity of scientists who have attained the highest level of formal academic training. It is calculated by totaling the number of doctoral scientists in each state and then normalizing it per 100,000 of each state's respective population. Doctoral scientists are professionals with advanced degrees in such fields as biology, chemistry, physiology, astronomy, physics, and the life sciences. Data come from the Division of Science Resources Studies of the National Science Foundation. Population figures are provided by the U.S. Census Bureau.
This indicator is calculated by totaling the number of doctoral engineers in each state and normalizing it per 100,000 state residents. Doctoral engineers specialize in a variety of fields, including electrical, nuclear, molecular, and chemical engineering. Data come from the Division of Science Resources Studies of the NSF. Population figures are provided by the U.S. Census Bureau.
The indicator for the number of science, engineering, and health Ph.D.s awarded measures how many doctorate degree-holders a state produces in those disciplines. The indicator is calculated by taking the number of Ph.D.s awarded and normalizing it per 100,000 people in that demographic. Data on doctoral scientists and engineers include all graduate-degree candidates and recipients in science, engineering and health fields. It was compiled by the Division of Science Resources Studies of the National Science Foundation. The U.S. Census Bureau provided population figures.
The indicator measures the number of positions granted in a state for advanced academic or professional work immediately after a student's completion of doctoral degree studies. The indicator is calculated by taking the number of Ph.D. holders conducting postdoctoral work and normalizing it per 100,000 state residents in that demographic. Science, engineering and health (SEH) postdoctoral awards data is provided by the Division of Science Resources Studies of the National Science Foundation. Population figures come from the U.S. Census Bureau.
This indicator is calculated by taking the number of bachelor degrees granted in a state for science- or engineering-related fields and dividing it by the total number of bachelor degrees granted in all disciplines. The indicator includes degrees conferred by Title IV-eligible, degree-granting institutions. Data is provided by the National Center for Education Statistics, a division of the U.S. Department of Education.
The indicator for recent degrees in science and engineering measures the proportion of people in a state's workforce who recently graduated from a higher-education program in science or engineering. The indicator is derived by totaling the number of workers who earned bachelor's, master's, or Ph.D. degrees in science or engineering in 2016-2017 and dividing that figure by the total number of civilian workers in a state. Data on degrees earned came from the Science Resources Studies Division of the National Science Foundation. Civilian labor force figures were collected by the Bureau of Labor Statistics, a division of the U.S. Department of Labor.
This indicator measures each state's computer penetration rate. It is calculated by taking the number of households with computers and dividing by the number of households in each state. Historically, computer ownership is highest among the most educated and wealthiest segments of the population. However, with falling prices and bundling schemes, computer ownership among lower-income and less-educated consumers has risen steadily over the past 10 years. The data was provided by the U.S. Department of Commerce.
The Technology and Science Workforce Composite Index encompasses three primary occupational areas: computer and information science experts, life and physical scientists, and engineers. Each category is made up of relevant components that measure employment intensity in science and technology. The composite index is then calculated by averaging the intensity scores of the three occupational areas so that 48 individual components feed into the overall score. "Intensity" is the percent share of employment in a particular industry or occupation as it relates to total state employment. Technology and science occupational data is collected by the Bureau of Labor Statistics and compiled by the Milken Institute.
The intensity of computer and information science (IS) experts is calculated by averaging the intensity scores of 15 types of computer and information science-related occupations. "Intensity" is the percent share of employment in a particular industry or occupation as it relates to total state employment. To determine this measurement, we combine total employment in the above fields and divide by increments of 100,000 state workers. These figures are then ranked, and the state rankings are converted into scores. Computer and IS occupational data and state employment data is collected by the Bureau of Labor Statistics and compiled by the Milken Institute.
The intensity of life and physical scientists is calculated by averaging the intensity scores of 19 types of science related occupations. "Intensity" is the percent share of employment in a particular industry or occupation as it relates to total state employment. To determine this measurement, we combine employment in the above fields and divide it by increments of 100,000 state workers. These figures are then ranked, and state rankings are converted into scores. Life and physical science occupational data is collected by the Bureau of Labor Statistics (BLS) and compiled by the Milken Institute. However, many states do not report employment statistics to the BLS in these occupations.
This indicator is calculated by averaging the intensity scores of 14 categories of engineering-related occupations. "Intensity" is the percent share of employment in a particular industry or occupation as it relates to total state employment. To determine this measurement, we combine total employment in the above fields and divide it by increments of 100,000 state workers. These figures are then ranked, and state rankings are converted into scores. Occupational data is collected by the Bureau of Labor Statistics and compiled by the Milken Institute.
The fifth set of indicators determining each state's position in technology and science is the Technology Concentration and Dynamism Composite Index, which measures the degree to which each state's economy is fueled by the technology sector. As such, it is a measurement of technology outcomes. The indicators that make up this composite focus on entrepreneurial dynamism and growth in high-tech industries. The following indicators explore such factors as high-technology employment, business formation, industry growth, and industry concentration. The data used in these indicators were collected from various sources, and compiled, modeled, and interpreted by the Milken Institute.
The indicator for percentage of businesses in the high-technology North American Industry Classification System (NAICS) codes is determined by totaling the number of business establishments in 19 technology-intensive NAICS code industries. These particular NAICS codes represent industries that spend an above-average amount of revenue on R&D and employ an above-industry-average number of technology-using occupations. The Milken Institute's definition of high technology is coupled with business data from the Bureau of Labor Statistics. This figure is then divided by the total number of state business establishments as collected by the U.S. Census Bureau.
The indicator for percent share of employment in high-technology North American Industry Classification System (NAICS) codes is calculated by dividing the total number of employees within 19 high-tech industries (defined by the Milken Institute) by the total employment base in a state. This is a change in methodology from previous editions, incorporating sectors that we deem to be representative of industries that spend an above-average amount of revenue on R&D and that employ an above-industry-average number of technology-heavy occupations. It defines high-technology more narrowly than the Bureau of Labor Statistics' definition, which leans toward heavy manufacturing. The U.S. Census Bureau collected the employment data.
The indicator for percentage of total payroll for workers in high-technology North American Industry Classification System (NAICS) code industries is calculated by dividing the dollar amount paid to high-tech workers by the total amount of wages and salary disbursements paid to all workers in each state. High-tech industries are narrowly defined by the Milken Institute. High-technology employment data is collected by the U.S. Census Bureau under contract with Taratec Corporation.
This indicator measures the number of high-tech establishment births minus the number of high-tech business establishment deaths during a one-year period. This figure is then divided by increments of 10,000 business establishments in each state. A business establishment is considered in this indicator only if it has an Employer Identification Number (EIN) issued by the U.S. Census Bureau. High-technology and total establishments' birth data is compiled by the U.S. Census Bureau under contract with Taratec Corporation.
This indicator measures a state's relative performance in generating fast-growing high-tech enterprises. The list of Technology Fast 500 companies is compiled annually by Deloitte & Touche, which ranks the fastest-growing technology companies in the United States and Canada over the most recent five-year period. In our indicator, the relevant Technology Fast 500 figures are averaged out by increments of 10,000 business establishments in each state. Deloitte & Touche considers a company to be high-tech if it produces technology or technology-related products, uses extensive technology, or allocates a large percentage of revenue to R&D. The U.S. Census Bureau collects the business establishment data.
The indicator for average yearly growth of high-technology industries measures expansion in high-tech employment. It is calculated using the average yearly growth in high-tech sectors for a state during the most recent five-year period on record. The Milken Institute's definition of high technology is utilized for this indicator. Data for this indicator were provided by Moody's Analytics and compiled by the Milken Institute.
This indicator measures the number of high-technology industries whose employment is growing faster than the national average for the overall economy. Growth rates are based on the most recent five-year period. The Milken Institute definition of high-tech is applied for this indicator. These particular high-tech NAICS codes represent industries that spend an above-average amount of revenue on R&D and employ an above-industry-average number of technology-dependent occupations. The data were furnished by Moody's Analytics and compiled by the Milken Institute.
The indicator for the number of high-technology industries with location quotient (LQ) higher than 1.0 measures how many high-tech industries are densely concentrated in a state. It is calculated by counting the number of high-tech industries (out of 19) that have an above-average location quotient in employment. An industry's location quotient measures a location's (in this case, a state's) level of employment concentration relative to the industry average across the United States. A high-tech industry in a state with an employment LQ higher than 1.0 is more densely concentrated in that state than in the nation on average. Industry output numbers used in this indicator were provided by Moody's Analytics and compiled by the Milken Institute.
The indicator for the number of Inc. 500 companies per 10,000 business establishments measures how many companies on Inc. magazine's top 500 list are located in each state. Inc.'s list ranks firms that apply to be on the list and can demonstrate that total net revenue (or, for financial companies, total net income) has more than tripled in the most recent five years. Our indicator is calculated by totaling the number of Inc. 500 companies in a state and normalizing the figures by increments of 10,000 business establishments in that state. The U.S. Census Bureau provides the business establishment data.