It seems as if every state and metro area is striving to be an “innovation economy” these days — indeed, President Barack Obama talked about it in his State of the Union address and it was a theme throughout the Greater Miami Chamber’s economic summit this week. Yet, according to some recent analyses, Florida may be falling behind.
In a Bloomberg analysis released this month, Florida ranks 35th among the 50 states on its state innovation index. The index is based on six measures: research and development intensity; productivity; high tech density; concentration in STEM (science, technology, engineering and math) employment; science- and engineering-degree holders; and patent activity.
Florida scored relatively well in high-tech density (13th among states) and down the middle in patent activity (22nd), according to the analysis. But the Sunshine State ranked 32nd for the number of degree-holders in science and engineering, 36th in R&D intensity, 41st in STEM concentration and 44th in productivity.
The Bloomberg state innovation index ranked Massachusetts tops in the country, followed by California, Washington, New Jersey and Connecticut. In the Southeast, North Carolina was the clear front-runner, ranking 16th nationwide, and Georgia landed at No. 26. The five lowest-ranked states for innovation were Louisiana, Arkansas, South Dakota, West Virginia and Mississippi.
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“Innovation usually leads to job creation, and high-skilled job creation, mostly,” Nariman Behravesh, chief economist at global market analysis firm IHS, told Bloomberg. “But there are other jobs that come with it; namely, that as the labor force grows, they need haircuts, they need landscapers, all that stuff — so it does tend to have linkages to other parts of the economy.”
Behravesh noted the contribution of universities: MIT graduates have produced about 400 startup businesses over the past couple of decades, which then creates a “cluster” of companies that propel the labor market and growth.
The Florida Research Consortium and the Florida Chamber Foundation are conducting a series of reports analyzing the components of Florida’s innovation economy, starting with higher education. Its report released last week identifies a significant funding shortfall for higher education in Florida. It notes that in recent studies by The Pew Charitable Trusts and the State Higher Education Executive Officers Association, Florida is identified as the lowest of the 50 states in funding per full-time student. It goes on to show that the gap is particularly large at the state’s Carnegie-designated “very high research” universities. At these institutions in Florida, total funding per student is 51 percent of the average of all the other states and 42 percent of the average of California, Texas and New York.
“Research shows us that a strong university system is a necessary foundational element for developing a dynamic innovation economy. This report shows us that investing in human capital leads to increased competitiveness — something we must do to secure Florida's future,” said Jerry Parrish, chief economist and director of research for the Florida Chamber Foundation.
The Milken Institute’s Best-Performing Cities index for 2015 ranks U.S. metropolitan areas by how well they are creating and sustaining jobs and economic growth, by measuring job creation, wage gains and technology industry growth trends. At the top of the index are San Jose and San Francisco in California; Provo, Utah; Austin, Texas; Raleigh, N.C.; and Seattle. While 11 Florida cities ranked in the top 100, South Florida cities fell in the middle of the pack, with Fort Lauderdale at 41, West Palm Beach at 50 and Miami at 65. Eight Florida metro areas were in the top 25 for fastest-growing metros; this group included Fort Lauderdale but not Miami or West Palm.
“Florida and local economic development organizations can learn from the most successful states and regions across the U.S. The most prominent performers are U.S. tech hubs and metro areas with the highest technology growth rates. We need a new direction with a prime focus on higher paying job creation and a more diverse and sustainable industry mix,” said Dale Gregory, executive director of the nonprofit InternetCoast, which tracks data such as Florida and South Florida STEM employment, university R&D expenditures, venture capital investment and other metrics on icoast.com.
The Progressive Policy Institute’s Chief Economic Strategist Michael Mandel recently released a list of the top 25 App Economy states that ranked Florida sixth in the nation for the number of jobs, with more than 59,000 “app economy jobs” in December 2015, up from 15,000 in April 2012.
However, when the institute measured the number of app economy jobs against all the other jobs in the state and ranked the share of app economy jobs in the workforce — what it calls its “app intensity” ranking — Florida fell to 28th, a spokesman said.
Nancy Dahlberg; 305-376-3595; @ndahlberg