BizWorld Updates Monthly Draper Innovation Index U.S.
States Compete to Land in Top Ten of Best Places to Launch a Startup

California and New York Fall Sharply
New Hampshire Catapults into 2nd; Utah Falls to 3rd
Colorado Overtakes Texas and North Carolina
Wyoming, Idaho, and Georgia Break into Top 10
Delaware and Oregon See Sharpest Declines
Pennsylvania, Wyoming, Illinois See Largest Improvements

Oakland, California – BizWorld announces the June 2025 update to the Draper Innovation Index U.S. (DII US), which evaluates each state’s innovation environment and entrepreneurship climate. Published monthly since 2021, the DII US provides the most well-rounded, up-to-date ranking of entrepreneurial locations, reflecting both traditional and emerging economic metrics, from taxes and regulations to venture capital investment, cryptocurrency friendliness, and blockchain investment trends. In order to continually provide an up-to-date assessment of states performance on the DII US, this month’s release includes the addition of the CATO Institute’s US Economic Freedom Index.

“As with the DII Global, this month’s incorporation of the CATO Institute’s Economic Freedom Index as a key data source has had a major impact on the DII US rankings this month,” said BizWorld Founder Tim Draper. “Due to very low ranking on the CATO Index, California (48th) and New York (50th), the first and third largest state economies, both fell sharply down the DII US rankings this month. Conversely, states that ranked highly on the CATO Index like New Hampshire (1st) jumped in our rankings.”

Top Takeaways from the DII US June 2025 Update

• California fell across all three DII US scenarios. It slipped from 17th to 25th overall, from 2nd to 4th in Tech Innovation, and from 28th to 35th in Regulatory and Tax as a result of poor monthly new business formation statistics and one of the nation’s lowest CATO Economic Freedom Index scores.
• New York also fell by 8 places, from 38th to 46th, largely a result of having the nation’s worst CATO Economic Freedom Index ranking.
• Following the inclusion of CATO’s Economic Freedom Index, New Hampshire (which ranks #1 nationally in the CATO rankings) rocketed from 8th in the DII US to 2nd, pushing Utah to 3rd.
• Pennsylvania had this month’s biggest jump – from 34th place to 21st – thanks to the largest monthly increase in cryptocurrency/blockchain venture capital investments as well as an above-average CATO Economic Freedom ranking.
• Wyoming saw this month’s second largest increase, rising from 20th place to 8th due to a strong overall new business formation performance.
• Colorado overtook Texas for 4th place due to solid cryptocurrency/blockchain-related venture capital investment growth.
• North Carolina fell from 3rd place to 6th due to a comparatively lower CATO Economic Freedom Index ranking compared to peers and a lack of cryptocurrency/blockchain venture capital investment growth.
• Arizona saw a smaller decline, from 6th overall to 7th, due to weak new business formation statistics.
• Idaho returned to the DII US Top 10, finishing in 9th place, benefitting from a strong CATO Index ranking and solid new business formation statistics.
• Georgia also entered the Top 10, rising from 12th place to 10th due to strong new business formation.
• Very weak new business formation, on the other hand, pushed Delaware down from 7th to 23rd in the DII US, exhibiting the worst state performance in this month’s rankings.
• Oregon saw the month’s second largest decline, falling from 28th overall to 37th due to low venture capital investment growth, comparatively weak new business formation performance, and a poor (46th) below average CATO Economic Freedom Index ranking.
• Illinois and Massachusetts, on the other hand, both rose– Illinois from 42nd to 31st due to strong new business formation statistics; Massachusetts took first place in Tech Innovation away from California and jumped to 13th in the overall DII US thanks to a strong performance on the CATO Institute’s US Economic Freedom Index.
• Connecticut saw its DII US ranking climb from 36th to 26th due to strong overall venture capital investment growth.
• Michigan benefitted primarily from healthy new business formation statistics and monthly overall venture capital investment growth helping drive the state higher from 19th to 12th.
• Maine recorded below-average new business formation statistic performance, weak overall venture capital investment growth, as well as no cryptocurrency/blockchain investment growth, leading to a drop 35th to 43rd.

“Many of the nation’s largest state economies saw sizable rises and falls this month,” said BizWorld Chief Economic Advisor Dr. Wallace Walrod. “While California and New York dropped, Illinois and Massachusetts, for instance, both rose across all three DII US scenarios. Pennsylvania, the sixth largest state economy, also rose by thirteen places. Just as with the national and global economy appears, more volatility is likely certain possible in the coming months, which means opportunities for states to improve their DII US rankings – and possible challenges for incumbents at the top of the list.”

The DII US will continue to post monthly updates which can be accessed here.

About BizWorld

BizWorld.org is a global non-profit organization based in Oakland, CA, whose mission is to equip future generations with entrepreneurial life skills to unlock their potential and create economic opportunity. Founded over 25 years ago by Silicon Valley venture capitalist Tim Draper, BizWorld.org programs teach students real-world 21st century skills and leadership that encourage them to become responsible leaders and entrepreneurs of tomorrow. More than 850,000 students in more than 100 countries have participated in BizWorld programs. https://www.bizworld.org/