The 2008 State New Economy Index : Benchmarking Economic Transformation in the States

In the midst of economic slowdowns, it's often hard to think beyond the near term. But, just as the most effective companies take advantage of slowdowns to better position themselves for subsequent periods of strong economic growth, so, too, should states. For the current slowdown, caused in large part by higher energy prices and excesses in the housing market that have spurred turmoil in the financial services industry, will not last forever. In fact, given the experiences of past New Economy slowdowns (the early 1990s and at the turn of this century), the slowdown could be less severe than many past slowdowns. As a result, the more important economic question states should be focused on is whether their economies are well positioned for robust growth and innovation over the next decade. Being well positioned means that state economies need to be firmly grounded in the New Economy. These New Economy factors have become a fundamental capacity that states need to have to find success and navigate the shoals of economic change. This report uses twenty-nine indicators to assess that capacity and, in particular, to measure the differences in the extent to which state economies are structured and operate according to the tenets of the New Economy. In other words, it examines the degree to which state economies are knowledge-based, globalized, entrepreneurial, IT-driven, and innovation-based. With these indicators as a frame of reference, the report then outlines a state-level public policy framework aimed at helping states master forthcoming challenges and take advantage of opportunities. The report builds off three earlier reports (The 1999 State New Economy Index, The 2002 State New Economy Index, and The 2007State New Economy Index)