Missouri climbs 11 spots in New Economy Index

A report recently released by the Progressive Policy Institute shows that the state of Missouri is making major strides toward adapting to the new economy of the 21st century. Missouri was ranked 24th in the 2002 New Economy Index, compared with a ranking of 35 in 1999 when the index was last compiled.

Only Michigan moved up in the rankings an equal number of places.

We view this as great news. It is an indication that the Department of Economic Development and our partners across the state have a clear understanding of the new economy. We understand that today's economy is global and that it is based on a foundation of knowledge and technology-based industries. For example, a series of economic prosperity summits conducted by Gov. Bob Holden shortly after he took office outlined priorities for Missouri to follow to ensure economic growth. Three target industries were identified: advanced manufacturing, information technology and the life sciences. All three are considered part of the new economy we hear so much about.

Creating an environment for entrepreneurship is another focal point of the new economy and our state is moving forward in that area as well. Last month, in cooperation with the National Governor's Association and the Kauffman Center for Entrepreneurial Leadership based in Kansas City, a policy academy was held to begin coordinating this effort. You will be hearing more about Missouri's efforts to support entrepreneurs over the next few months.

Another key factor is having a skilled, talented work force. Missouri's strong commitment to education will help ensure quality workers are available and that their skill levels can be increased to meet changing times.

The report lists five key identifiers of the new economy.

New industries, especially traded services and E-businesses, are becoming a more important part of the economic base of regions.

Most industries and firms, even traditional ones, are organizing work around technology.

The old sources of competitive advantage access to raw materials, transportation routes or customer markets, low costs and a large labor pool are becoming less important.

States' economic success will increasingly be determined by how effectively they can spur homegrown technological innovation and entrepreneurship.

When the most valuable input for many firms is the skills and talent of their workforce, a pool of skilled workers is the most important factor in choosing a location.

The New Economy Index ranks states on 21 indicators in five categories that demonstrate important factors in the new economy knowledge jobs, globalization, economic dynamism and competition, digital economy and technological innovation capacity.

Missouri ranked highest in economic dynamism at No. 14, which includes indicators of jobs, job churning and initial public offerings. Missouri's lowest ranking was No. 38 in globalization, which focuses on manufacturing exports and direct foreign investment. We ranked No. 23 in knowledge jobs, No. 25 in digital economy and No. 30 in innovation capacity.

Of Missouri's surrounding states, only Illinois ranked higher at No. 17. Rankings for other adjacent states were Kansas at 29, Nebraska at 33, Oklahoma at 34, Iowa at 38, Tennessee at 39, Kentucky at 42 and Arkansas at 48. That's more good news for us clearly we are a leader of the new economy in the Midwest.

Overall we are quite pleased with our ranking, particularly compared to three years ago. While we have room to improve, Missouri certainly is moving in the right direction toward positioning itself for economic prosperity.

(Joseph L. Driskill is the director of the Missouri Department of Economic Development).