North Carolina still has a lot of work to do to position itself for “quality” economic growth built around technology and science assets, according to a new study from the Milken Institute.

Based on a review of 77 indicators that are grouped into five categories, the institute founded by investor Michael Milken concludes that the Tar Heel state along with neighbors Georgia and South Carolina rank far behind national leaders such as Massachusetts and Maryland.

North Carolina, the nation’s 10th largest state in population, ranks 18th in the “State Technology and Science Index” that the institute announced Wednesday at a national biotechnology conference in San Diego.

“In a knowledge-based economy, human capital is vital to state prosperity. Today, concentrations of talent attract firms to states as opposed to industry agglomerations and firms being the principal attraction force for people,” the authors of the study said.

“The technical and scientific work force of a state propels its technological sophistication, innovation, and economic growth—not only for technology firms, but for all firms where innovation is a key competitive advantage. Research spending may be the raw material of innovation, but without a qualified technology and science work force, the conversion to a commercial application can’t take place.”

The state did improve two spots from its ranking in the 2004 survey but remains one spot below its 17th-place standing in the first such Milken survey released in 2002.

Georgia, meanwhile, ranked 25th, a drop of seven spots from the 2004 report and 10 places below its standing in 2002.

South Carolina ranked 42nd in the new survey, up from 44th in 2004. South Carolina stood 41st in 2002.

Rankings are based on what the institute described as:

• “Human Capital Investment

• “Research and Development Inputs

• “Risk Capital and Entrepreneurial Infrastructure

• “Technology and Science Work Force

• “Technology Concentration and Dynamism “

Massachusetts ranks first with a score of 82.61 followed by Maryland (80.04), Colorado (78.32), California (74.62), Washington (72.09) and Virginia (70.33).

“The most dominant showing for Massachusetts comes in the Research and Development Inputs Composite Index, where it retains its 1st-place ranking with a score of 93.07,” the authors noted. “Most impressive, its score improved from an already-high level in 2004, marking the highest score recorded by any state on any of the fi ve composite measures. Matching its remarkable performance in the previous 2004 index, it ranks in the top fi ve in sixteen out of eighteen total R&D categories.”

North Carolina received an overall 59.63 score, Georgia a 53.30 and South Carolina a 39.12.

North Carolina scored best in risk capital and entrepreneurial infrastructure (eighth at 67.27) but 26th in human capital investment. Georgia also ranked eighth in risk capital/entrepreneurial infrastructure but was 38th in human capital investment. South Carolina ranked best in risk capital/entrepreneurial infrastructure at 32nd but was 48th in human capital investment.

"States that have a vision and a plan for building and retaining high-wage jobs and viable industries are finding ways to invest in their science and technology assets," said Ross DeVol, director of Regional Economics at the Milken Institute, and lead author of the study, in a statement "The changes in this year’s Index give a good measure of who is ahead in the increasing competition for scarce human capital and other resources needed for a successful industry."

Helping boost Massachusetts’ score was the recent passage of a $1 billion bill to boost high tech infrastructure and research and development, according to Milken.

Maryland, meanwhile, advanced to second from fourth place in 2004.

"With strong partnerships between the public and private sectors, and collaborative research with universities, federal and commercial partners, we have been able to create a strong technology industry in Maryland," said Gov. Martin O’Malley. "The results of the Milken Institute study are further evidence that Maryland is highly and increasingly competitive in drawing, retaining, and growing technology-based businesses."

The study also warns that states are competing more strongly for high-tech related industry. Other countries led by China and India also are more competitive in high-tech than they were four years ago, according to the report.