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Chapter 8. State Indicators

Science and Technology in the Economy


Net High-Technology Business Formations as Share of All Business Establishments


Quartiles

Net high-technology business formations as share of all business establishments: 2006 (Percent)
 
1st quartile
(0.93% – 0.28%)
2nd quartile
(0.27% – 0.18%)
3rd quartile
(0.16% – 0.05%)
4th quartile
(0.04% to -0.31%)
 
Alaska‡ Florida Alabama‡ Delaware‡
Arizona Hawaii‡ Arkansas‡ Michigan
California Iowa Connecticut Minnesota
Colorado Louisiana‡ Illinois New Hampshire‡
District of Columbia Maryland Indiana New Jersey
Georgia Missouri Kansas‡ Ohio
Idaho‡ Montana‡ Kentucky‡ Rhode Island‡
Nevada‡ Nebraska‡ Maine‡ South Dakota‡
North Carolina New Mexico‡ Massachusetts West Virginia‡
Tennessee Oklahoma‡ Mississippi‡
Utah South Carolina‡ New York
Virginia Texas North Dakota‡
Wyoming‡ Washington Oregon
Pennsylvania
Vermont‡
Wisconsin
 
‡ EPSCoR state

SOURCE: Census Bureau, 1989–2004 Business Information Tracking Series, special tabulations. See Data Table.



Findings

  • In 2006, about 14,000 net new businesses in high-technology industries were formed in the United States. From a base of approximately 7.6 million total business establishments, 84,777 new business establishments were formed in high-technology industries and 70,746 ceased operations in those same industries.
  • Almost all states showed more establishments beginning operations in high-technology industries than ceasing operations in 2006.
  • Utah and Virginia showed the highest rates of net high-technology business formation in 2006. However, the largest numbers of net new businesses were formed in California, Texas, and Florida.
  • EPSCoR states tended to be distributed throughout the state ranking, indicating that the rate of net high-technology business formation in many of these states was comparable to that in non-EPSCoR states.


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.

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 are based on their classification according to the 2002 edition of the North American Industry Classification System (NAICS). See table 8-A in the "Introduction" for a list of the 46 industries (by 4-digit NAICS code) that are defined as high technology. Data for years prior to 2002 are not directly comparable.

Changes in company name, ownership, or address are not counted as business formations or business deaths. Net business formations cannot be used to directly link the number of high-technology business establishments in different years because the primary industry of some establishments may have changed during the period.

Data Table

Table 8-47
Net high-technology business formations as share of all business establishments, by state: 2004 and 2006
 
  Net high-technology
business formations
  All business
establishments
  High-technology formations/
business establishments (%)
State 2004 2006   2004 2006   2004 2006
 
United States 11,598 14,031   7,366,978 7,585,035   0.16 0.18
Alabama 63 134   100,521 103,236   0.06 0.13
Alaska 22 66   19,309 19,838   0.11 0.33
Arizona 357 446   125,330 137,532   0.28 0.32
Arkansas 123 98   65,127 66,647   0.19 0.15
California 1,099 2,633   838,615 875,682   0.13 0.30
Colorado 490 509   146,937 154,254   0.33 0.33
Connecticut –47 44   92,710 93,232   –0.05 0.05
Delaware –52 –78   25,344 25,563   –0.21 –0.31
District of Columbia 66 195   19,503 20,967   0.34 0.93
Florida 1,743 1,009   483,693 516,185   0.36 0.20
Georgia 642 734   214,200 225,577   0.30 0.33
Hawaii 51 90   31,538 33,063   0.16 0.27
Idaho 54 151   41,205 45,599   0.13 0.33
Illinois 452 243   315,093 320,756   0.14 0.08
Indiana 208 164   149,050 151,024   0.14 0.11
Iowa 12 150   81,334 82,542   0.01 0.18
Kansas 160 114   75,600 76,261   0.21 0.15
Kentucky 116 42   91,598 92,700   0.13 0.05
Louisiana –38 195   102,866 101,647   –0.04 0.19
Maine 81 31   41,131 41,941   0.20 0.07
Maryland 475 278   135,699 140,021   0.35 0.20
Massachusetts 156 193   175,426 174,997   0.09 0.11
Michigan 44 27   237,392 235,245   0.02 0.01
Minnesota 185 39   148,276 150,896   0.12 0.03
Mississippi 7 83   60,364 60,442   0.01 0.14
Missouri 195 279   153,584 154,177   0.13 0.18
Montana 108 98   34,570 36,550   0.31 0.27
Nebraska 64 98   50,803 51,822   0.13 0.19
Nevada 169 207   55,713 61,061   0.30 0.34
New Hampshire 30 13   38,707 39,273   0.08 0.03
New Jersey –80 38   240,013 242,649   –0.03 0.02
New Mexico 37 98   44,071 45,814   0.08 0.21
New York 702 274   509,873 514,992   0.14 0.05
North Carolina 514 692   212,457 221,898   0.24 0.31
North Dakota –1 34   20,763 21,286   0.00 0.16
Ohio 204 111   271,078 269,398   0.08 0.04
Oklahoma 75 236   87,180 89,440   0.09 0.26
Oregon 156 141   104,966 110,317   0.15 0.13
Pennsylvania 474 278   300,832 303,507   0.16 0.09
Rhode Island 67 8   29,900 30,322   0.22 0.03
South Carolina 175 230   100,947 105,060   0.17 0.22
South Dakota 16 9   24,693 25,419   0.06 0.04
Tennessee 39 372   131,355 134,776   0.03 0.28
Texas 401 1,221   489,782 508,092   0.08 0.24
Utah 283 382   62,644 68,612   0.45 0.56
Vermont 42 22   22,072 22,261   0.19 0.10
Virginia 845 986   188,533 196,849   0.45 0.50
Washington 346 476   170,848 179,368   0.20 0.27
West Virginia 16 –13   40,732 40,480   0.04 -0.03
Wisconsin 215 66   143,739 145,590   0.15 0.05
Wyoming 37 85   19,262 20,175   0.19 0.42
                 
Puerto Rico NA NA   NA NA   NA NA
 

NA = not available

SOURCE: Census Bureau, 1989–2006 Business Information Tracking Series, special tabulations.

Science and Engineering Indicators 2010

Source Data
 

Science and Engineering Indicators 2010   Arlington, VA (NSB 10-01) | January 2010