Chapter 8: State Indicators

Science and Technology in the Economy

Select Indicator:

Quartiles | Findings | Description

Net high-technology business formations as share of all business establishments: 2002


Net high-technology business formations as share of all business establishments: 2002


Net High-Technology Business Formations as Share of All Business Establishments: 2002.

Quartiles


Net high-technology business formations as share of all business establishments: 2002*

 
1st Quartile
(0.35%–0.10%)
2nd Quartile
(0.06%–0.01%)
3rd Quartile
(0.00% to -0.03%)
4th Quartile
(-0.04% to -0.28%)
 
District of Columbia Arizona Alabama California
Florida Arkansas Alaska Connecticut
Hawaii Colorado Iowa Illinois
Idaho Delaware Mississippi Kansas
Louisiana Georgia Missouri Massachusetts
Maryland Indiana Nebraska Michigan
Montana Kentucky North Carolina Minnesota
Nevada Maine Ohio New Hampshire
New Mexico Oklahoma Oregon New Jersey
North Dakota Pennsylvania Tennessee New York
Utah Rhode Island Vermont Washington
Virginia South Carolina
Wyoming South Dakota
Texas
West Virginia
Wisconsin
 
*States in alphabetical order, not data order.

SOURCES: U.S. Census Bureau, 1989-2002 Business Information Tracking Series, special tabulations; and County Business Patterns. See table 8-37.

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Findings

  • In 2002, from a base of approximately 7 million total business establishments, 60,000 new business establishments were formed in high-technology industries and 61,000 ceased operation in those same industries, indicating a net loss of more than 1,000 businesses in high-technology industries in the United States.

  • This represented a significant change from 2000, when nearly 10,000 net business formations in high-technology industries occurred in the United States.

  • The number of states that reported net losses of business establishments in high-technology industries rose from 3 in 2000 to 21 in 2002, indicating a more challenging business environment.

  • Nevada, California, Virginia, and Utah showed unusually high rates of net high-technology business formations in 2000, but because of significant fluctuations in this indicator, only Utah continued to show a high value in 2002.

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Description

The business base of a state is constantly changing as new businesses form and others cease to function. The term “net business formations” refers to the difference between the number of businesses that are formed and the number that cease operations during any particular year. This difference can be small and can vary significantly from year to year.

The ratio of the number of net business formations that occur in high-technology industries to the number of business establishments in a state indicates the changing role of high-technology industries in a state’s economy. High positive values indicate an increasingly prominent role for these industries.

The data on business establishments in high-technology industries for 1998 through 2002 were based on their classification according to the 1997 edition of the North American Industry Classification System. Company births and deaths are determined from their Employer Identification Numbers in the U.S. Census Bureau records; thus, changes in company name, ownership, or address are not counted as business formations or business deaths.

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National Science Board.