Colorado Ranked Thrid in Milken Institute's State Technology and Science Index Report

"Because states can no longer succeed with a low-skill, low-cost economic development formula, they must compete globally on the basis of new ideas, new products and new markets, along with superior productivity growth, the report states. The future will belong to those regions that can develop a thriving technology industry in a wide variety of fast-growing fields including biotech, clean technology, nanotechnology, communications and next-generation computer applications."

The Milken Institute - July 19, 2008

The Milken Institute released its 2008 State Technology and Science Index which ranks states by a range of criteria and indices to see which states are best positioned to achieve economic growth due to success in high technology industries.

The good news for Colorado is it maintained its position as the overall third highest scoring state after Massachusetts and Maryland despite increasing competition. Table 1 below compares Colorado's ranking to the other top 5 states in the overall index and five sub-categories.

Table 1 : Top Five States on Milken Science and Technology Indices by 2008 Rank (and 2004 Rank).



Notice that Colorado's highest rank was two in the Workforce Index and its lowest rank was five in the Concentration and Dynamism Index reflecting a strong overall performance across all the index components.

One area for concern is the fact that Colorado fell from first to third in the Human Capital Index between 2004 and 2008. This drop reinforces a long-standing concern on the part of policy-makers and economic development officials that Colorado does a relatively poor job of funding higher education in the state.

Another area of concern is Colorado's rank on the Technology Concentration and Dynamism Index which fell from second to fifth from 2004 to 2008. This index measures the strength of states' technology clusters or agglomerations which are key generators of economic growth through locational externalities. These types of network effects are sources of competitive advantage to states and regions. Thus, it is important to try to understand why Colorado's rank on this index decreased. One sub-component on this index where Colorado fared poorly is the annual growth in high tech industries (2002 to 2006) where Colorado ranked only 41st. Colorado's small net loss over this period reflected the sharp technology sector contraction after the dot com burst in the early part of the decade which hit the state particularly hard given its high concentration in the tech sector. As the technology sector has stabilized, any further decrease in Colorado's ranking in this index in subsequent years would be a warning signal of competitive deterioration.