Stories of Technology, Innovation, & Entrepreneurship in the Southeast

Knoxville Business News Tennessee Mountain Scenery Background
March 25, 2024 | Tom Ballard

Tennessee ranks #37 on WalletHub’s innovation index

The report from the personal financial website provides more evidence of the need for significant funding at the state level.

A recent report from WalletHub, the personal financial website, provides additional evidence of the need for more funding for innovation in Tennessee. The results also mirror a report commissioned by Launch Tennessee in late 2023 and conducted by RTI International that showed the Volunteer State was as much as $50 million behind other peer states in terms of annual state investments in the innovation economy (see article here).

According to the WalletHub analysis, Tennessee ranks #37 among the other states and the District of Columbia across 25 key indicators of innovation-friendliness. The data set ranges from the share of science, technology, engineering, and mathematics (STEM) professionals to R&D spending per capita to tech-company density. Only Kentucky (#44), Arkansas (#47), Louisiana (#50), and Mississippi (#51) ranked below Tennessee.

Topping the list was the District of Columbia followed by Massachusetts (#2), Washington (#3), California (#4), and Colorado (#5).

The rankings were based on two broad categories equally weighted – human capital and innovation environment. Within the first grouping, there were six subcategories as follows:

  • Share of STEM Professionals: Double Weight (~14.29 Points);
  • Share of Science & Engineering Graduates: Full Weight (~7.14 Points);
  • Projected STEM-Job Demand by 2030: Full Weight (~7.14 Points);
  • Scientific-Knowledge Output: Full Weight (~7.14 Points);
  • Eighth-Grade Math & Science Performance: Full Weight (~7.14 Points); and
  • Advanced Placement Exam Participation: Full Weight (~7.14 Points).

The innovation grouping included these subcategories:

  • Share of Technology Companies: Double Weight (~4.55 Points);
  • R&D Spending per Capita: Double Weight (~4.55 Points);
  • R&D Intensity: Full Weight (~2.27 Points);
  • Invention Patents Per Capita: Full Weight (~2.27 Points);
  • Tech Gross State Product as a Percent of Total State Product: Full Weight (~2.27 Points);
  • Net Migration: Full Weight (~2.27 Points);
  • Entrepreneurial Activity: Full Weight (~2.27 Points);
  • Number of Start-ups “Accelerated” per Total Number of Start-ups: Full Weight (~2.27 Points);
  • Tax-Friendliness: Double Weight (~4.55 Points);
  • Venture-Capital Funding per Capita: Full Weight (~2.27 Points);
  • Average Annual Federal Small-Business Funding per GDP: Full Weight (~2.27 Points);
  • Industry-Cluster Strength: Full Weight (~2.27 Points);
  • Open Roads & Skies Friendly Laws: Half Weight (~1.14 Points);
  • Average Internet Speed: Full Weight (~2.27 Points);
  • Share of Households with Internet Access: Full Weight (~2.27 Points);
  • Adoption of K–12 Computer Science Standards: Half Weight (~1.14 Points);
  • IP Services Exports as a Share of All Services Exports: Full Weight (~2.27 Points);
  • Growth in Total Firms: Full Weight (~2.27 Points); and
  • Jobs in New Companies: Double Weight (~4.55 Points).

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