May 11, 2024

Draper Innovation Index US May 2024

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

Utah Overtakes Florida for #1 in the DII US
California Reclaims 2nd Place from Colorado in Tech Innovation
New York Slips Further from 36th to 38th
North Dakota, Illinois, and South Dakota See Declines
Nebraska, Idaho, Connecticut, Oregon, and Wisconsin Rise

Oakland, California – BizWorld announces the May 2024 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.

“Several states, including California, Illinois, and Vermont, are considering wealth taxes intended to raise tax revenue,” said BizWorld founder Tim Draper. “These proposed taxes could easily have the opposite impact, which occurred two years ago in Norway after a new wealth tax encouraged millionaires and billionaires to simply leave the country. Several of these proposed taxes, such as Vermont’s, are significantly higher than the Norwegian tax of 1.1 percent that caused significant capital flight and tax revenue loss. If enacted, these new taxes could lead to significant declines in these states’ DII rankings.”


Top Takeaways from the DII US May 2024 Update:

  • Utah overtook Florida for first place on the DII US due to its strong business formation and overall venture capital investment trends. It remains in first place in the Emerging Innovation scenario and in second place in Regulatory and Tax.
  • Florida fell from first to second in the DII US and from 6th to 8th in Emerging Innovation due to weaker business formation statistics. It did retain the top spot in the DII US Regulatory and Tax scenario.
  • Texas’s strong cryptocurrency/blockchain related investments helped it maintain its 3rd place rank in the DII US Balanced, its 4th place rank in Emerging Innovation and its 3rd place rank in Regulatory and Tax.
  • With improvements in overall venture capital investments and business formation statistics, Idaho was able to climb from 15th to 11th in the DII US Balanced scenario.
  • California’s strong overall venture capital investments, including cryptocurrency and blockchain, allowed it to overtake Colorado for second place in the DII US Emerging Innovation scenario.
  • Weakness across all business formation indicators pushed New York from 36th to 38th in the DII US Balanced.
  • Nebraska registered significant improvement across all DII US scenarios – by 7 places in the DII Balanced, 5 places in Tech Innovation and 3 places in Regulatory and Tax – due to its strong business formation trends.
  • Strong cryptocurrency/blockchain-related investment growth allowed Wisconsin to jump by 6 places, from 30th to 24th in the DII US Tech Innovation scenario.
  • Due to a combination of minimal venture capital investment growth and relatively weak new business formation, North Dakota registered the largest decline in the DII US Balanced, falling from 30th to 37th.
  • South Dakota’s decent performance in business formation statistics was offset by a lack of venture capital investment growth and a continued lack of cryptocurrency/blockchain related investments. It fell by 3 places on the DII US Balanced and By 6 places in Tech Innovation.
  • Illinois slipped by 3 ranks in both the DII US Balanced and Tech Innovation scenarios largely due to weakness in business formation statistics.
  • This offset growth in overall and cryptocurrency/blockchain related venture capital investments.
  • While Connecticut’s improvements in overall venture capital investments and solid growth in business formation statistics helped push it from 37th to 34th in the DII US Balanced, its lack of cryptocurrency-blockchain related investment growth led to a decline (from 17th to 18th) in Tech Innovation.
  • With strong performance across all three business formation statistics as well as improving overall venture capital investments, Oregon climbed from 35th to 32nd in the DII US Balanced and from 23rd to 21st in Tech Innovation.

“Utah is only the thirtieth largest U.S. state by population and does not enjoy a large world-renowned industry cluster à la Silicon Valley or Hollywood,” said BizWorld Chief Economic Advisor Dr. Wallace Walrod. “Nevertheless, it now holds the top spot on the DII US due to a variety of strengths, including business-friendly regulatory and tax policies, while considerably larger economies such as California and New York are much farther down the rankings. Building a strong innovation and entrepreneurship environment, in other words, is possible for states of all sizes.”

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

About BizWorld is a global non-profit organization based in Oakland, CA, whose mission is to enable youth from all backgrounds to unlock the power of entrepreneurship to create career opportunities, inspire self-reliance, and build confidence that drives economic prosperity globally. Founded over 25 years ago by Silicon Valley venture capitalist Tim Draper, 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.

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