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Chapter 8. State Indicators

Science and Technology in the Economy

Net high-technology business formations as a percentage of all business establishments



Findings

  • In 2008, about 2,800 more businesses in high-technology industries ceased operations than were formed in the United States. From a base of approximately 7.6 million total business establishments, 76,033 new business establishments were formed in high-technology industries and 78,801 ceased operations in those same industries.
  • The effect of the business downturn became evident in 2008 as 30 states plus the District of Columbia had more businesses in high-technology industries ceasing operations than were being formed.
  • The 7 top-ranking states on this indicator were EPSCoR states. However, the largest numbers of net new businesses were formed in Texas and Pennsylvania.


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 2003 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 8-53
Net high-technology business formations as a percentage of all business establishments, by state: 2004, 2006, and 2008
 
  Net high-technology business formations   All business establishments   High-technology formations/business establishments (%)
State 2004 2006 2008   2004 2006 2008   2004 2006 2008
 
United States 11,598 14,031 –2,768   7,366,978 7,585,035 7,587,695   0.16 0.18 –0.04
Alabama 63 134 –65   100,521 103,236 103,690   0.06 0.13 –0.06
Alaska 22 66 –32   19,309 19,838 19,870   0.11 0.33 –0.16
Arizona 357 446 –236   125,330 137,532 139,876   0.28 0.32 –0.17
Arkansas 123 98 131   65,127 66,647 66,558   0.19 0.15 0.20
California 1,099 2,633 –973   838,615 875,682 876,984   0.13 0.30 –0.11
Colorado 490 509 148   146,937 154,254 156,426   0.33 0.33 0.09
Connecticut –47 44 –124   92,710 93,232 92,428   –0.05 0.05 –0.13
Delaware –52 –78 –153   25,344 25,563 25,134   –0.21 –0.31 –0.61
District of Columbia 66 195 –25   19,503 20,967 21,051   0.34 0.93 –0.12
Florida 1,743 1,009 –322   483,693 516,185 506,466   0.36 0.20 –0.06
Georgia 642 734 –228   214,200 225,577 227,233   0.30 0.33 –0.10
Hawaii 51 90 –14   31,538 33,063 32,862   0.16 0.27 –0.04
Idaho 54 151 –10   41,205 45,599 46,133   0.13 0.33 –0.02
Illinois 452 243 65   315,093 320,756 321,441   0.14 0.08 0.02
Indiana 208 164 –78   149,050 151,024 149,891   0.14 0.11 –0.05
Iowa 12 150 –14   81,334 82,542 82,207   0.01 0.18 –0.02
Kansas 160 114 –31   75,600 76,261 75,958   0.21 0.15 –0.04
Kentucky 116 42 46   91,598 92,700 92,471   0.13 0.05 0.05
Louisiana –38 195 121   102,866 101,647 103,877   –0.04 0.19 0.12
Maine 81 31 49   41,131 41,941 41,683   0.20 0.07 0.12
Maryland 475 278 –56   135,699 140,021 138,416   0.35 0.20 –0.04
Massachusetts 156 193 –141   175,426 174,997 173,933   0.09 0.11 –0.08
Michigan 44 27 –408   237,392 235,245 228,890   0.02 0.01 –0.18
Minnesota 185 39 –278   148,276 150,896 148,641   0.12 0.03 –0.19
Mississippi 7 83 52   60,364 60,442 60,793   0.01 0.14 0.09
Missouri 195 279 –7   153,584 154,177 152,165   0.13 0.18 0.00
Montana 108 98 80   34,570 36,550 37,228   0.31 0.27 0.21
Nebraska 64 98 32   50,803 51,822 52,064   0.13 0.19 0.06
Nevada 169 207 –32   55,713 61,061 61,721   0.30 0.34 –0.05
New Hampshire 30 13 0   38,707 39,273 38,812   0.08 0.03 0.00
New Jersey –80 38 –393   240,013 242,649 238,080   –0.03 0.02 –0.17
New Mexico 37 98 –1   44,071 45,814 46,091   0.08 0.21 0.00
New York 702 274 20   509,873 514,992 517,873   0.14 0.05 0.00
North Carolina 514 692 –53   212,457 221,898 224,757   0.24 0.31 –0.02
North Dakota –1 34 43   20,763 21,286 21,514   0.00 0.16 0.20
Ohio 204 111 –273   271,078 269,398 263,353   0.08 0.04 –0.10
Oklahoma 75 236 22   87,180 89,440 91,186   0.09 0.26 0.02
Oregon 156 141 93   104,966 110,317 111,266   0.15 0.13 0.08
Pennsylvania 474 278 177   300,832 303,507 302,568   0.16 0.09 0.06
Rhode Island 67 8 –54   29,900 30,322 29,713   0.22 0.03 –0.18
South Carolina 175 230 25   100,947 105,060 106,501   0.17 0.22 0.02
South Dakota 16 9 42   24,693 25,419 25,624   0.06 0.04 0.16
Tennessee 39 372 –75   131,355 134,776 136,321   0.03 0.28 –0.06
Texas 401 1,221 231   489,782 508,092 521,383   0.08 0.24 0.04
Utah 283 382 –16   62,644 68,612 71,301   0.45 0.56 –0.02
Vermont 42 22 –4   22,072 22,261 22,067   0.19 0.10 –0.02
Virginia 845 986 –162   188,533 196,849 197,376   0.45 0.50 –0.08
Washington 346 476 52   170,848 179,368 181,688   0.20 0.27 0.03
West Virginia 16 –13 19   40,732 40,480 39,579   0.04 –0.03 0.05
Wisconsin 215 66 –12   143,739 145,590 143,830   0.15 0.05 –0.01
Wyoming 37 85 54   19,262 20,175 20,722   0.19 0.42 0.26
                       
Puerto Rico NA NA NA   NA NA NA   NA NA NA
 

NA = not available

SOURCE: Census Bureau, special tabulations (2011) of 1989–2008 Business Information Tracking Series.

Science and Engineering Indicators 2012

Source Data

State Data Tool

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