2023 U.S. Innovation Scorecard

Innovation starts with a seed of an idea. It takes an entrepreneur with vision and courage to make that seed blossom into a business that enriches our lives or even provides our livelihood.

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Overview

The 2023 Scorecard provides a comprehensive evaluation of all 50 states across 11 categories, using 28 updated metrics. This year, two new categories are introduced: Telehealth, which assesses states' adoption of vital emerging health technologies, and Tort Reform, which examines the fairness of business regulations. The Scorecard considers factors such as tech workforce, job and business creation, R&D, venture capital investments, educational attainment, internet connectivity, and social factors like personal liberties.

A total of 14 Innovation Champions are recognized, including both established leaders and rising tech stars such as Arizona, Colorado, Indiana, Kansas, Maryland, Massachusetts, Michigan, Minnesota, Nevada, North Dakota, Texas, Utah, Virginia, and Washington. The Scorecard highlights the growing adoption of autonomous vehicle technologies and advanced air mobility solutions, emphasizing that each state contributes uniquely to technological innovation with their distinct stories and approaches.

Introduction from the Consumer Technology Association (CTA)® President and CEO

Since 2015, the Consumer Technology Association (CTA) has produced the U.S. Innovation Scorecard, highlighting work in states across our nation to advance technological progress and improve quality of life for Americans and people around the world.

In tough times, innovation thrives. Over the past three years, American business leaders and entrepreneurs launched and grew technologies that helped businesses move seamlessly online, relieved supply chain bottlenecks and delivered vital medical care across state lines. New innovations changed the relationship between humans and technology, with advances in robotics, AI, smart home, virtual and augmented reality and more enhancing what we as people can do. More, a focus on sustainability and the desire to keep our world cleaner and greener generated new products that preserve energy and protect our environment.

The United States is a beacon and a magnet for people with innovative ideas and the drive to make them a reality. Yet as always, some states do more than others to help encourage and support that innovation. Those that allow businesses to grow and create new competition and even new industries bring benefits to their own residents and to people all over the world.

In the 2023 U.S. Innovation Scorecard —our 6th edition—CTA evaluated all 50 states on 11 quantitative and qualitative categories, including internet, STEM education, diversity and inclusion, and support for disruptive technologies like self-driving vehicles, drones, and telehealth. Our 2023 Innovation Champions show that smart policy paired with big ideas can deliver huge rewards for us all.

I’m thrilled to share the 2023 U.S. Innovation Scorecard, our assessment of the American innovation landscape and our vision for what’s to come.

Gary Shapiro

President and CEO, CTA

2023 Innovation Champions

Arizona

Colorado

Indiana

Kansas

Maryland

Massachusetts

Michigan

Minnesota

Nevada

North Dakota

Texas

Utah

Virginia

Washington

Methodology

CTA’s Innovation Scorecard is formulated using 11 categories that, in combination, indicate how strongly a state supports innovation. Some of these factors relate to individuals in a state, while others address corporations doing business or employing people there, and others concern the legislative and regulatory environments. All third-party sources and state policy inputs reflect the newest information available as of 2022.

Categories

Attracts Investment

This category measures the amount of per capita venture capital investment and combined government and private sector research and development. Venture capital investment data comes from PitchBook. R&D investment data comes from the National Science Foundation’s Business Research and Development and Innovation: 2020 data available Oct 2022. (Table 13). The combined normalized scores are graded on a curve and assigned letter grades from A+ to F.

Broadband

Grades are assigned based on fixed and mobile internet speeds and the percentage of households subscribing to broadband. Ookla United States’ Mobile and Fixed Broadband Internet Speeds (August 2022) using median fixed and mobile download and upload speeds, and data on the percentage of households subscribing to a broadband service from the 2021 American Community Survey. The combined normalized scores are graded on a curve from A+ to F.

Drones

CTA policy and research experts assign A plus to F grades, based on laws and regulations affecting consumer and commercial drone operations, and electric vertical takeoff and landing (eVTOL) aircraft.

Entrepreneurial Activity

Using quarterly workforce indicators data from the U.S. Census Bureau, this category tracks number of new jobs per capita created from Q3 2017 through Q2 2022 by firms with fewer than 50 employees, as well as the number of businesses formed over the most recent 5 years according to the Census Bureau’s Business Dynamics Statistics. States are graded on a curve and assigned letter grades from A+ to F.

Human Rights

This category ranks US states based on whether they are "right to work" and have LGBTQ nondiscrimination laws. Data is collected from the National Right to Work Legal Defense Foundation and the Movement Advancement Project, respectively. States that allow workers to decide whether to join a union receive an A+ while those that force union participation receive an F. Similarly, states with anti-discrimination laws receive higher grades. The combined scores are normalized and assigned a letter grade ranging from A+ to F.

Innovation-Friendly Sustainable Policies

CTA policy and research experts assign an A+ to F grade based on how laws and regulations meant to support environmental sustainability – on topics such as recycling of electronics, product packaging and energy efficiency – impact the consumer technology industry. Regulations may inhibit, support or be neutral in how they impact innovation.

Self-Driving Vehicles

CTA policy and research experts assign A+ to F grades based on state laws and regulations affecting the development, testing, and operation of self-driving vehicles.

Tax Friendliness

Using data from the Tax Foundation’s 2022 State Business Tax Climate Index, this grade is derived from numerical scoring data, including corporate and individual income taxes, sales tax, unemployment insurance tax and property tax rates. States are graded on a curve and assigned a letter grade from A+ to F.

Tech Workforce

This ranking system grades US states based on the number of technology-related jobs and apprenticeship graduates per capita. The data is collected from the United States Census Bureau, the Bureau of Labor Statistics, and the Department of Labor. States are graded on a curve and assigned a letter grade ranging from A+ to F.

Telehealth

CTA policy and research experts assign A plus to F grades, based on laws and regulations affecting telehealth technologies. Grading relies heavily on Medicaid reimbursement policies regarding telehealth procedures from the Center for Connected Health Policy’s Connected Health Policy State Telehealth Laws and Reimbursement Policies report. States are graded and assigned letter grades from A+ to F.

Tort Reform

This category evaluates each state’s legal environment, according to three metrics: Metric A uses the U.S. Chamber of Commerce, Institute of Legal Reform, 2022 Tort Costs in America to quantify annual tort costs per household in the state. Metric B draws on the Institute for Free Speech, 2022 Anti-SLAPP Statutes Report Card to assess whether states have laws in place to prevent plaintiffs from bringing legal actions without merit solely for the purpose of coercing, intimidating or silencing defendants; states that have such laws earn higher grades, while states that do not earn lower grades. For Metric C, CTA policy and research experts assess whether companies are compelled to pay damages to class action plaintiffs who claim to have suffered no actual injuries.

Overall Grade

The overall innovation scorecard grade captures a state’s overall support for innovation based on the criteria above. Each criterion receives equal weight in the final scoring formula. Final composite scores are then graded on a curve to determine which of the four tiers a state will be ranked in: Modest Innovator, Innovation Adopter, Innovation Leader or Innovation Champion.

Explore the 2023 Results

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