The American Heartland’s Position In the Innovation Economy


The following excerpt is from The American Heartland’s Position In the Innovation Economy, a newly released report written by Ross DeVol, Jonas Crews, and Shelly Wisecarver. Their report highlights the strengths and weaknesses of the American Heartland's position in the 21st century economy. Read the full report (PDF) here.

"The innovation capacities of places are a key driver of long-term economic performance in the United States, other advanced nations, and emerging nations. The states and regions who invest in and nurture innovative activities and build human capital will establish ecosystems that create high-paying jobs for their citizens and attract migrants from other states and nations, boosting economic growth further. This paper evaluates the American Heartland’s position in the innovation economy relative to the rest of the country. We identify key strengths, but also identify gaps that should be narrowed through the development and implementation of thoughtful, well-articulated public policy.

This analysis demonstrates that there are unrevealed or unrecognized innovation strengths in the American Heartland. However, many opportunities currently exist to improve its economic position. In order to close the divergence in performance between the Coasts and the American Heartland; it must participate more fully in the innovation-driven economy of the 21st Century.

In developing an evaluation of the 19 states included in the American Heartland (see Figure ES1), we utilized the Milken Institute’s State Technology and Science Index (STSI), supported by the State New Economy Index published by the Information Technology & Innovation Foundation. The two indices are the most widely used measures showing how states are positioned for participation in an environment of innovation-driven economic growth. The lead author of this report, with support from his former colleagues at the Milken Institute, developed the STSI in 2002. The efficacy of the STSI is demonstrated in its ability to explain 75 percent of the difference in real technology-related GDP per capita and two-thirds of income per capita of the working-age population between the 50 states.

The STSI includes 107 individual metrics that segment into five subcategories to benchmark where states are positioned on innovative activities. All metrics are normalized relative to some benchmark such as population, gross state product (GSP) or other measures to adjust for the size of each state’s economy. The five composites include 1) Research and Development Inputs, 2) Risk Capital and Entrepreneurial Infrastructure, 3) Human Capital Investment, 4) Technology and Science Workforce and 5) Technology Concentration and Dynamism (please see the Introduction section for a more thorough description)."

Read the full report (PDF) here.

Ross DeVol is a Walton Fellow at the Walton Family Foundation and is based in Bentonville, Arkansas, focusing on research on policies related to economic vitality in Northwest Arkansas and the American heartland. Ross is the former chief research officer at the Milken Institute, where he was responsible for overseeing research on international, national and subnational growth performance; access to capital and its role in economic growth and job creation; and health-related topics. He was ranked among the “Superstars of Think Tank Scholars” by International Economy magazine.

Jonas Crews is a Research Associate in economics, supporting Walton Family Foundation Fellow Ross DeVol. Prior to joining the foundation, Jonas was a senior research associate for the Federal Reserve Bank of St. Louis, where he conducted spatial analysis, created surveys and coauthored journal articles and blog posts on trade and the macroeconomy. Jonas holds a Bachelor of Science in economics with a focus in the quantitative track from Auburn University.

Shelly Wisecarver is a Program Support Associate in economics, supporting Walton Family Foundation Fellow Ross DeVol. Prior to joining the foundation, Shelly was a multifaceted entrepreneur who has begun more than a dozen business start-ups across the Heartland. Shelly’s business background includes restaurateur, dental manufacturer, dental wholesale supply, and clothing, jewelry, and furniture retail. She graduated from the University of Arkansas Summa Cum Laude with a Bachelor of Arts in nonprofit business communication. Shelly is located in Bentonville, Arkansas.