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7. Massachusetts

2011 Ranking: 3
2010 Ranking: 3

Although one of the most technologically-advanced states, Massachusetts took a hit in our rankings this year because of a slowdown in high-tech business formation.

Still, the state still has a wide range of innovative companies, including biotechnology firms such as Genzyme, medical equipment maker Boston Scientific, aerospace and defense contractor Raytheon and robot maker iRobot.

Massachusetts is ranked in the top five though in research grants and in broadband deployment.

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