According to a recent report from Anne Marie Knott in the Harvard Business Review, the two friendliest states for innovation are Minnesota and California. Innovation, based on Research and Development (R&D), usually leads to the development of intellectual property, processes and trade secrets that must be protected. Innovation is clearly one of the most ingredients to business success in today’s global and competitive economy.
To identify these two states as the friendliest for innovation, Knott “compared the effectiveness of R&D investment of all public firms across the 50 states” through a research quotient. Using the research quotient, Knott obtained each state’s median score, which measured the effectiveness of public firms conducting R&D investment. According to Knott, the median research quotient “is like the IQ scale for individuals – the average is 100, and 67% of firms fall between 85 and 115.”
Knott’s research found the California and Minnesota are two of the friendliest states for innovation. Knott looked at the number of public firms in each state conducting R&D. The states with the most public firms conducting R&D were California (235), Massachusetts (83), New York (77), and Texas (50). California had the highest median research quotient at 103.6, and had no fewer than 28 out of the top 50 firms. Minnesota also received a high score at 101.5.