Stories of Technology, Innovation, & Entrepreneurship in the Southeast

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 teknovation.biz 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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