Index Outline

Sub-Index Rankings
The STSI is a composite of five sub-indexes that each measures a different dimension of states' science and technology economies. The overall index rankings are calculated by taking the average of state scores on all five of these sub-indexes:

• Research and Development Inputs (RDI): The index examines a state's R&D capacity to see if it has facilities that can attract funding and create innovations that can be commercialized. We evaluate state rankings for academic, industry, and federal government R&D funding; National Science Foundation activity; and Small Business Innovation Research awards.
  
  
• Risk Capital and Entrepreneurial Infrastructure (RCI): States' entrepreneurial capacity and risk capital infrastructure are ingredients that determine their success in converting research into commercially viable technology services and products. We include measures of venture capital as well as entrepreneurial activity such as patents, business formation, and initial public offerings.
  
  
• Human Capital Investment (HCI): Education and training are crucial assets for any state to develop its knowledge economy. We look at indicators that suggest how these activities influence the skill levels of each state's current and future workforce. Examples include numbers of bachelor's, master's, and PhD degrees and measures specific to science, engineering, and health education.
  
  
• Technology and Science Workforce (TSW): The intensity of the technology and science workforce indicates whether states have sufficient depth of high-caliber technical talent, represented by the share of workers in a particular field relative to total state employment. We look at 49 occupations spread across three categories: computer and information sciences, engineering, and life and physical sciences.
  
  
• Technology Concentration and Dynamism (TCD): By measuring high-tech industry growth, we can assess how effective policymakers and other stakeholders have been at transforming assets into prosperity. Our measures of concentration and dynamism include the proportion of establishments, employment, and payrolls in high-tech categories, as well as the employment location quotient, which quantifies each state's industry concentration relative to the entire country.

Specific Indicators
We calculate scores for each sub-index by averaging state rankings for each indicator in that sub-index. States are ranked in descending order on each indicator and then assigned scores based on those rankings; the state ranked first receives a score of 100, and the state ranked fiftieth gets a score of two. Several sub-indexes use specific processes when averaging state rankings on relevant indicators:

• The RDI sub-index uses a partially weighted ranking of three indicators to account for the proportion of total R&D funding that comes from different sources in private industry (around 67 percent), the federal government (around 20 percent), and academic institutions of higher education (around 13 percent).
  
  
• The TSW sub-index does not assign a score for each indicator used to denote the job intensity of a unique occupation code. Instead, it takes the sum of job intensity for all occupation codes in each of three categories (Computer and Information Scientists, Engineers, and Life and Physical Scientists) to rank the overall level of job intensity within each category." It then uses the average of those three rankings to determine each state's sub-index ranking. This method ensures that each job within a particular type is weighted equally and that less common (lower intensity) occupations are not weighted more.