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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 2010, about 4,600 more businesses in high-technology industries were formed than ceased operations in the United States. From a base of approximately 7.4 million total business establishments, 78,862 new business establishments were formed in high-technology industries and 74,231 ceased operations in those same industries.
  • The lingering effects of the business downturn were still evident in 2010 as 12 states had more businesses in high-technology industries ceasing operations than were being formed.
  • Many of the top-ranking states on this indicator were Experimental Program to Stimulate Competitive Research states. However, the largest numbers of net new businesses were formed in Florida and Texas.


Description

The business base of a state is constantly changing as new businesses form and others cease to exist. 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 in 2003 through 2008 are based on their classification according to the 2002 edition of the North American Industry Classification System (NAICS). The data for the years 2009 and 2010 are based on their classification according to the 2007 edition of the NAICS. See table 8-A in the chapter introduction for a list of the industries (by 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 8-54
Net high-technology business formations as a percentage of all business establishments, by state: 2004, 2007, and 2010
 
Net high-technology
business formations
All business establishments High-technology business
formations all business
establishments (%)
State 2004 2007 2010 2004 2007 2010 2004 2007 2010
 
United States 11,598 15,113 4,631 7,355,122 7,689,821 7,384,267 0.16 0.20 0.06
Alabama 63 141 -3 100,402 105,388 99,097 0.06 0.13 0.00
Alaska 22 55 49 19,266 20,146 19,922 0.12 0.27 0.25
Arizona 357 464 -213 125,126 142,649 131,661 0.30 0.33 -0.16
Arkansas 123 114 120 65,022 67,513 65,069 0.19 0.17 0.18
California 1,099 1,929 -8 836,783 889,726 848,238 0.13 0.22 0.00
Colorado 490 751 97 146,747 157,570 151,765 0.34 0.48 0.06
Connecticut -47 62 -113 92,552 93,444 89,078 -0.05 0.07 -0.13
Delaware -52 -131 -36 25,311 25,476 24,263 -0.21 -0.51 -0.15
District of Columbia 66 143 134 19,498 20,957 21,478 0.34 0.68 0.62
Florida 1,743 873 616 482,910 522,710 490,492 0.38 0.17 0.13
Georgia 642 731 106 213,906 231,418 216,787 0.31 0.32 0.05
Hawaii 51 -30 -32 31,497 33,321 31,904 0.16 -0.09 -0.10
Idaho 54 185 -13 41,121 47,284 43,365 0.14 0.39 -0.03
Illinois 452 545 92 314,707 324,628 313,654 0.15 0.17 0.03
Indiana 208 171 122 148,864 152,604 144,802 0.14 0.11 0.08
Iowa 12 97 91 81,216 83,008 80,637 0.01 0.12 0.11
Kansas 160 41 31 75,478 76,984 74,163 0.21 0.05 0.04
Kentucky 116 48 14 91,437 93,428 90,665 0.13 0.05 0.02
Louisiana -38 225 117 102,732 104,459 103,234 -0.04 0.22 0.11
Maine 81 0 -44 41,061 42,409 40,506 0.20 0.00 -0.11
Maryland 475 478 342 135,515 141,076 134,417 0.36 0.34 0.25
Massachusetts 156 304 -36 175,154 176,304 169,475 0.09 0.17 -0.02
Michigan 44 267 113 237,062 234,971 218,752 0.02 0.11 0.05
Minnesota 185 276 -54 148,053 151,304 145,247 0.13 0.18 -0.04
Mississippi 7 79 25 60,267 61,727 59,196 0.01 0.13 0.04
Missouri 195 62 -262 153,328 154,201 149,628 0.13 0.04 -0.18
Montana 108 87 26 34,473 37,645 35,950 0.32 0.23 0.07
Nebraska 64 144 32 50,735 52,452 51,803 0.13 0.27 0.06
Nevada 169 181 112 55,590 62,706 59,113 0.32 0.29 0.19
New Hampshire 30 -23 -28 38,650 39,363 37,385 0.08 -0.06 -0.07
New Jersey -80 -77 31 239,692 242,967 228,577 -0.03 -0.03 0.01
New Mexico 37 93 -69 44,024 46,763 44,134 0.09 0.20 -0.16
New York 702 977 530 509,079 518,608 518,527 0.14 0.19 0.10
North Carolina 514 559 383 212,170 227,444 217,768 0.25 0.25 0.18
North Dakota -1 52 25 20,739 21,477 21,792 0.00 0.24 0.11
Ohio 204 205 173 270,693 269,855 253,136 0.08 0.08 0.07
Oklahoma 75 245 47 87,064 91,054 89,868 0.09 0.27 0.05
Oregon 156 309 198 104,808 113,054 107,181 0.15 0.27 0.18
Pennsylvania 474 233 198 300,408 304,721 296,514 0.16 0.08 0.07
Rhode Island 67 69 22 29,845 30,299 28,477 0.23 0.23 0.08
South Carolina 175 294 44 100,759 107,685 101,902 0.18 0.27 0.04
South Dakota 16 76 5 24,646 25,797 25,562 0.07 0.29 0.02
Tennessee 39 99 -156 131,161 137,547 131,302 0.03 0.07 -0.12
Texas 401 1,588 600 488,935 520,405 521,248 0.08 0.31 0.12
Utah 283 397 156 62,539 71,722 68,725 0.47 0.55 0.23
Vermont 42 37 17 22,041 22,298 21,422 0.19 0.17 0.08
Virginia 845 844 567 188,281 200,131 192,780 0.46 0.42 0.29
Washington 346 657 185 170,428 183,984 175,486 0.21 0.36 0.11
West Virginia 16 40 99 40,665 40,415 38,599 0.04 0.10 0.26
Wisconsin 215 78 138 143,466 146,019 139,332 0.15 0.05 0.10
Wyoming 37 69 41 19,216 20,705 20,189 0.20 0.33 0.20
 
Puerto Rico NA NA NA NA NA NA NA NA NA
 

NA = not available.

SOURCE: Census Bureau, special tabulations (2007, 2010, 2013) of the Business Information Tracking Series (various years).

Science and Engineering Indicators 2014


State Data Tool

The state data tool allows interactive exploration of the 58 indicators in this chapter. Users have the ability to choose and explore a single indicator in-depth, compare multiple indicators for preselected groups, customize their own graphics, or download data tables. Click the button below to get started.

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