Note: The Skinny blog is written by Rick Smith, editor and co-founder of Local Tech Wire and business editor of

RESEARCH TRIANGLE PARK, N.C. – Bolstered by growth in the tech sector, measured improvements in its work force and in technology concentration as well as a commitment to technology, North Carolina vaulted five spots to 13th in the new State Technology and Science Index from the Milken Institute.

The state’s venture capital and private equity investors as well as entrepreneurs produced North Carolina’s best ranking – eighth – in the myriad of criteria used to form the index. That’s the same as in 2008 and a spot lower than 2004 but far better than the 13th ranking in 2002.

The overall ranking is the best for North Carolina since the index launched eight years ago. In the first report, the state ranked 17th. It fell to 20th in 2004 then rose in 2008 to 18th.

Two recent pieces of data from other sources lend credence to the Milken Institute’s index about NC despite the state’s unemployment remaining above the national average:

  • The latest technology job survey from the North Carolina Technology Association shows that the state’s IT job ranks actually increased last year.
  • Data released Friday from the National Venture Capital Association showed North Carolina’s venture investing surging to $456 million last year from $289 million the previous year.

Massachusetts is No. 1 in the index followed by Maryland and Colorado.

Georgia, meanwhile, stayed in25th place as it did in 2008. South Carolina slipped one spot to 43rd.

The California-based think tank’s composite scoring system should North Carolina improved most in technology and science work force (15th from 21st in 2008) and in what it calls “technology concentration and dynamism” (11th from 22nd). Dynamism refers to state and regional leaders’ commitment to growing technology.

“Contributing factors were gains in start-up rates, individual firm growth rates, and number of high-tech sectors growing faster than the U.S. average, where North Carolina ranked first,” the report says.

“Growth in life sciences and software occupations were strong contributors to technology and science workforce gains,” it adds.

The report also noted Gov. Bev Perdue’s North Carolina Innovation Council, which includes private sector leaders and entrepreneurs, as a factor in the state’s commitment to the tech sector.

The index ranks states on five major criteria:

  • Human Capital Investment
  • Research and Development Inputs
  • Risk Capital and Entrepreneurial Infrastructure
  • Technology and Science Work Force
  • Technology Concentration and Dynamism

“States that got a head start on building their tech and science assets prior to the economic downturn now have healthier, more diversified economic growth engines,” said Ross DeVol, executive director of economic research at the Milken Institute who was the lead author of the report. “Looking into the subcomponents of the index, we see that competition is growing, however, as states vie for high-tech investment and human capital not just from other states but from around the world.”

The 10 top states (Index ranking for 2008 in parenthesis):

1.Massachusetts (1)
2.Maryland (2)
3.Colorado (3)
4.California (4)
5.Utah (8)
6.Washington (5)
7.New Hampshire (9)
8.Virginia (6)
9.Connecticut (7)
10.Delaware (14)

A copy of the report can be downloaded here.

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