AMERICA’S BEST STATES FOR HIGH-TECH
EDUCATION, INCENTIVES AND BROADBAND TAKE THESE TO THE TOP
With the high-tech industry at an all-time high for growth, more and more U.S. markets are becoming meccas for both established and emerging technologies–and boosting their trade capabilities to handle the needs of booming industries.
What follows are the states landing the lion’s share of high-tech projects.
The high-tech industry in Washington is heavily concentrated in a 10-kilometer radius, and Lake Union just north of downtown Seattle is “ground zero,” according to Joseph Williams, Governor Jay Inslee’s Information and Communications Technology Sector (ICT) lead for Economic Development.
“Within those 10 kilometers, we have the second largest IT industry in the world–a vibrant community of very sophisticated tech workers where there is an incredible exchange of ideas,” Williams says.
The Evergreen State has several “very synergistic” sectors, including aerospace and related supply chain companies, ICT, and the clean-tech sector, says Allison Clark, managing director, Office of Economic Development and Competitiveness, at the Washington State Department of Commerce. Moreover, one of the 10 national labs is located in eastern Washington.
“With other clusters, we have critical mass to maintain a skilled workforce and we are seeing a lot of bleeding into other sectors, where technology is being utilized in distinct ways, including in agriculture,” Clark says.
The ports of Seattle and Tacoma are typically ranked within the top five U.S. ports by tonnage in any given period of time.
“We are one day closer to Asia than any other port in the U.S., which can lower the cost of doing business for companies conducting trade with Asian companies,” Clark says.
“California is home to arguably the most talented workforce pool in the nation, our public universities and colleges are consistently ranked among the best in the world, our infrastructure from rail, roads, airports and ports provide efficient and fast access to markets across the globe, and our research institutions are on the cutting edge of tech transfer,” says Sid Voorakkara, deputy director, External Affairs, Governor’s Office of Business and Economic Development. “All of these are key factors in determining location and expansion for high-tech companies.”
The Golden State is home to multiple thriving sectors, from healthcare to aerospace and agriculture—and high-tech companies are in “all of the above.” The Governor’s Office of Business and Economic Development (GO-Biz) looks for opportunities to support firms regardless of their life cycle–from incubation to commercialization. Since 2014, GO-Biz has allocated $555.3 million to 775 companies projected to create 77,178 new jobs and make $14.5 billion in new investments.
“And given there are 17 designated foreign trade zones in California from Eureka to the Mexican border, California’s ports and communities are ready to assist companies move products and materials efficiently and duty-free,” Voorakkara says.
“From the tech hubs in Boston and Cambridge, to the manufacturing centers in central and western parts of the state, what sets Massachusetts apart is our roster of leading technology companies, our well-trained workforce and world-class research and development institutions,” says Tim Connelly, executive director of the Massachusetts Technology Collaborative.
The Bay State’s governor and legislature have made a commitment to investing in and building on these resources, which has helped make Massachusetts one of the best places in the U.S. to start a business, develop a revolutionary idea or launch a new technology, Connelly says. All of this translates into the accolades the state has received from Bloomberg, U.S. News & World Report and the U.S. Chamber of Commerce, which show that Massachusetts “is truly open for business.”
The Port of Boston is an economic engine for not only Boston, but for the entire New England region, ensuring that Massachusetts’ industries, manufacturers and workers remain competitive in the global economy, says Lisa Wieland, director of the Massachusetts Port Authority.
“Our imports and exports serve as vital catalysts for growth, investment and opportunity, with more than 1,600 businesses across New England, including those in the high-tech industry, using the Port of Boston for importing and exporting goods and equipment,” Wieland says.
Texas has a very strong track record of attracting relocation and expansion projects, particularly from high-tech companies, says Robert Allen, president and CEO of the Texas Economic Development Corp.
“From my perspective, talent is the thread that unites all of these projects,” Allen says. “While much of the rest of the country struggles to fill open jobs, Texas has the second largest workforce in America and continues to lead the nation in talent attraction.”
Infrastructure and proximity to international airports is also a major factor, particularly for international companies that need ready access to global destinations, he says. The Lone Star State’s 380 airports make up the second-largest state airport system in the U.S. Moreover, the state’s incentives programs and overall low tax burden continue to attract jobs and investment to the state.
Texas is also home to more public roads and freight railroads than any other state and boasts 16 seaports, including 11 deep-water ports with channels at least 30 feet deep, Allen says. Of these ports, 11 are designated as foreign trade zones.
“Our strategic geographic position puts companies in an ideal location to distribute goods, not only across the U.S., but to global markets in Europe and South America,” Allen says.
“Florida has a very attractive business climate–a business-friendly government, low taxes and a very strong multicultural labor force,” says Manny Mencia, Enterprise Florida Inc.’s senior vice president for International Trade and Development.
The Sunshine State has the second-largest aviation and aerospace industry in the U.S., is second in life sciences, which includes medical device and pharmaceuticals, and is among the fastest growing IT clusters in the U.S., Mencia says.
“It speaks volumes that Florida has the third-largest tech industry in the nation,” says Tim Vanderhoof, senior vice president for business development.
Florida ranks No. 1 in high-tech employment, with 237,000 working in tech industry across all sectors, and more than 27,000 IT companies are based in the state, according to Vanderhoof. Supporting this is infrastructure, including 275 data centers, and Florida is third among states in the most miles of fiber–61,000 miles and 47,000 fiber-lit structures in the state.
“Regarding how Florida can facilitate trade for high-tech companies, we have 20 commercial airports, 15 deep-water seaports and two space ports,” he says. “The state has earmarked $2.8 billion for capital improvements at our seaports across the next five years to make sure Florida continues to be a player in the global marketplace.”
One very impressive measure of North Carolina’s appeal to high-tech companies is the sheer growth of tech jobs in the state, says Christopher Chung, chief executive officer of the Economic Development Partnership of North Carolina.
Overall tech-industry employment in The Tar Heel State‒including IT and the energy, environmental and life science industries‒grew 20.6 percent from 2010 to 2015, well above the 10.9 percent national average increase, Chung says. The IT sector alone saw a nearly 29 percent increase in jobs, the fastest growth in IT jobs of any state. Recent blockbuster company expansions suggest that pace won’t be slowing anytime soon.
“The state’s highly educated workforce, concentration of research and development activity, low cost of living and business-friendly climate are all factors,” in the stellar growth rate of N.C.’s high-tech sector, Chung says.
Indeed, North Carolina’s 3 percent corporate income tax rate—scheduled to drop to 2.5 percent in 2019—is the lowest among all 44 states with the business tax.
“In addition, North Carolina, with its central East Coast location, offers unparalleled access to U.S. markets via some of the nation’s primary Interstates,” Chung says. “The state also has four international airports, the largest consolidated rail system in the country and two deep-water ports located along Atlantic shipping lines.”
As a critical network access point since the early days of the World Wide Web, Virginia plays a key role in supporting today’s global Internet traffic, says Stephen Moret, president and CEO of the Virginia Economic Development Partnership.
With the second-highest concentration of tech workers in the country, according to Cyberstates 2016, Old Dominion has become a world-class center for emerging IT, software development and advanced communications companies. Seventy percent of the world’s Internet traffic passes through the Metropolitan Area Exchange East, located in Ashburn, Virginia, and the Commonwealth is one of the most active data center markets in the country.
“In addition to its critical IT infrastructure and pipeline of skilled talent, Virginia continues to attract high-tech companies because the Commonwealth serves as a gateway to the rest of the nation and the world,” Moret says. “Centrally located on the U.S. East Coast and bordering the nation’s capital, Virginia is within a one-day drive of approximately 43 percent of the U.S. population.”
The Port of Virginia, served by every major shipping line, is the U.S. East Coast’s best-positioned first and last call port for post-Panamax ships. As the only East Coast port with authorization for 55-foot channels, the Port of Virginia boasts deep shipping channels, no height restrictions and double-stack rail service with two Class 1 railroads.
“New Jersey’s highly educated, tech savvy workforce and extensive broadband network are among the many assets attracting technology companies to our state,” says Michele Brown, president and CEO, Choose New Jersey Inc.
New Jersey is ranked the No. 1 state for broadband connectivity, and Newark boasts the fastest Internet speeds in the world, with miles of dark fiber ready for use, Brown says. The Garden State also offers a world-class transportation infrastructure, including the Port of New York and New Jersey, the largest maritime cargo center on the East Coast, making it easy to import and export goods and products.
“An investment of more than $5 billion in infrastructure improvement projects at the ports, including the raising of the Bayonne Bridge, road improvements and doubling intermodal capacity, ensure they are ready for the neo-Panamax era,” Brown says.
New Jersey also boasts five foreign trade zones, including one of the largest contiguous foreign trade zones in the country: FTZ 49 at Port Newark/Elizabeth.
“Our strategic location in the heart of the U.S. Northeast corridor and 2,800 miles of Interstates and highways give technology companies the ability to reach 22 million consumers and thousands of businesses within a two-hour drive,” Brown says.
High-tech, multi-national companies have options in Delaware, which is the first state to be approved by the Foreign Trade Zone Board for “Alternative Site Framework,” says Cerron Cade, director, Delaware Division of Small Business, Development & Tourism.
Centrally located in the Mid-Atlantic, Delaware is within two hours of 40 million people. The First State has access to five major, international airports, passenger and commercial rail service, a deep-water port and more.
“Delaware is adept at transporting not just people and things but information, always ranking at/near the top for overall Internet speeds,” Cade says. The state provides companies access to a workforce that is productive (No. 2 for hourly GDP per person) and highly educated (No. 3 for most PhD’s per capita).
In addition, there are 89 universities within 50 miles. Incubator and laboratory sites such as 1313 Innovation, The Mill, Delaware Innovation Space and The Star Campus offer “perfect location choices” for any high-tech company, whether start-up or been-up.
“Finally, the New Economy Jobs Tax Credit can provide significant benefit to a company bringing jobs to Delaware in new and emerging sectors,” Cade says. “And it is just one of a number of programs and incentives that provide companies options in Delaware.”
Forbes ranked Utah the No. 1 state for business and careers six out of the past seven years, boasts Val Hale, executive director of the Utah Governor’s Office of Economic Development.
Utah’s 5 percent corporate tax rate hasn’t changed in nearly 20 years, and state leaders try to keep government regulation to a minimum. “We have a very business-friendly legislature and so, overall, Utah’s soil is very fertile for growth,” Hale says. “Consequently, there is tremendous entrepreneurship taking root, especially in technology.”
The Beehive State has developed a critical mass of technology companies, with a software and IT industry that includes nearly 4,500 establishments employing more than 73,000 workers. Utah is also home to more than 900 high-tech aerospace companies.
“Utah’s infrastructure makes it an ideal distribution hub and gateway to international trade,” Hale says. “The state is one to two days from all major western ports, as well as Canada and Mexico. Salt Lake City International Airport leads the nation for on-time departure rankings and connects the state to cities across the world.”
The state is exploring the development of an inland port, which would help alleviate processing bottlenecks at seaports and serve as key way stations in the national e-commerce distribution network. Salt Lake City is also home to Foreign Trade Zone 30.
Maryland, South Carolina, Colorado and Nevada are among the other states with established or fast-growing emerging high-tech sectors.