Washington, Virginia, and Indiana have emerged as leaders in advanced industry specialization in the United States, according to a report by the Information Technology and Innovation Foundation (ITIF). The report highlights that most U.S. states lag behind the global average in this sector, with only Washington State surpassing China.
The ITIF study ranks all 50 states and the District of Columbia based on employment and output across 21 advanced industries. These industries span various sectors from information technology to pharmaceuticals. "Innovation-driven production is key to reclaiming U.S. dominance on the international stage," stated ITIF President Robert D. Atkinson. He emphasized the need for a coordinated national industrial strategy due to most state economies underperforming globally.
Using a location quotient (LQ) for analysis, Washington leads with an LQ of 1.79, followed by Virginia at 1.58, Indiana, Michigan, and California. Conversely, New Mexico, Montana, Wyoming, Louisiana, and Hawaii rank lowest.
Meghan Ostertag from ITIF noted that this ranking serves as a "national roadmap for domestic employment and production in advanced industries." The report reveals that while California leads in production across several categories like IT services and biotechnology, other states such as Virginia and Maine excel in specialization relative to their economic size.
Key findings indicate that nineteen states exceed the national average LQ of 1.00 across these industries. However, thirty-one states fall short of this benchmark. High-tech hubs like Virginia and manufacturing centers such as Indiana top the rankings.
Atkinson warned about America's declining capacity compared to global averages: "Success in these traded-sector industries directly impacts economic strength." He called for federal-state collaboration on a national industrial strategy prioritizing strategic sectors.
The report suggests policy changes including banning subsidies for Chinese firms within U.S., establishing grant programs to boost foreign direct investment (FDI), restructuring tech hub programs into focused regions, and hosting annual summits for aligning strategies.
"Across-the-board tariffs are not likely to do much," Atkinson concluded about improving competitiveness against China without unified growth strategies leveraging state-level advantages.
Readers can access further details through the full report or interactive data visualization provided by ITIF.