America's Top States For Business

America’s top states for innovation

States that spark bright ideas

Adastra | The Image Bank | Getty Images

Practically every business wants to be at the forefront of innovation, but only a handful of states provide the right environment to get them there. Our Technology and Innovation category in America's Top States for Business looks at scientific, medical and agricultural research in all 50 states. We look at patents, high-tech business formation, knowledge jobs and more. Here are 10 states on the edge—the cutting edge.

By Scott Cohn, CNBC senior correspondent
Posted 24 June 2014

Slideshow Sources: National Science Foundation, National Institutes of Health, U.S. Patent & Trademark Office, Standard & Poor's, State Economic Development Offices

10. Virginia

Richmond, Virginia
Bill Dickinson | Moment | Getty Images

There's nothing old about the Old Dominion when it comes to tech. The Commonwealth has been experiencing a high-technology boom, with the second largest rate of technology business formation in the country. More than 12 percent of all new businesses formed are in the technology sector, according to the National Science Foundation. Virginia is also in the top 10 for scientific research dollars. The Dulles Technology Corridor, with hundreds of telecom companies, is one of the most important data hubs in the world.

9. Colorado

Helen H. Richardson | The Denver Post | Getty Images

The Centennial State is a perennial tech powerhouse, in part because of its ability to adapt its focus to the hottest areas of the tech sector—whether it is green jobs or the telecom boom. A major reform package just signed into law reroutes millions of dollars that had gone toward rural phone subsidies to high-speed broadband instead. Colorado is third in the nation for high-tech business formation and fourth for scientific research dollars.

  • 2014 Technology & Innovation score: 230 points (out of 300)
  • Major tech firms: Liberty Global, United Launch Alliance, Arrow Electronics
  • Patents issued in 2013: 2,793
  • 2013 Technology & Innovation rank: 8

8. Pennsylvania

Downtown Philadelphia from the Ben Franklin Bridge.
Swapan Jha | Moment Open | Getty Images

Maybe Pennsylvania makes you think of coal mines and steel mills, but the Keystone State is a mainstay for research. The state ranks fourth in the nation for medical research grants and fourth as well for agricultural research dollars. The USDA's Eastern Regional Research Center in Wyndmoor just developed a new method of pasteurizing raw eggs using radio frequencies—faster and more effective than the old hot-water method.

  • 2014 Technology & Innovation score: 234 points (out of 300)
  • Major tech firms: Ametek, Mylan, Comcast
  • Patents issued in 2013: 3,961
  • 2013 Technology & Innovation rank: 5

7. Maryland

Human Genome Sciences' employees work on manufacturing the new lupus drug, Benlysta, in Rockville, MD.
Jeffrey MacMillan | Getty Images

The Old Line State lines up with the best of them in technology, with a high concentration of some of America's top technology professionals. Maryland is fourth in the nation for high-tech business formation and is in the top 10 for medical and scientific research funding. The state's BioMaryland 2020 Strategic Plan promises to invest $1.3 billion in the life sciences industry over 10 years.

5. Illinois (tie)

Boeing headquarters in Chicago.
Source: Boeing Co.

The Land of Lincoln is also the land of knowledge. Illinois ranks in the top five for scientific research funding and the top 10 for medical and agricultural research. The state that gave us the skyscraper and the vacuum cleaner is not resting on its laurels, ranking in the top 10 for patents last year. Argonne National Laboratory in Lemont, a nonprofit partnership of the University of Chicago and the U.S. Department of Energy, boasts 1,250 scientists and engineers and an annual budget of $722 million.

  • 2014 Technology & Innovation score: 245 points (out of 300)
  • Major tech firms: Motorola Solutions, Hospira, Boeing
  • Patents issued in 2013: 4,644
  • 2013 Technology & Innovation rank: 5

5. Massachusetts (tie)

MIT Station Center by architect Frank Gehry.
Education Images | UIG | Getty Images

The Bay State is practically swimming in innovation, with a high concentration of knowledge workers. Federal research dollars are washing ashore as well. The home of Harvard and MIT is second in the nation for both scientific and medical research. Massachusetts claims to invest the equivalent of 5 percent of its economy in research and development, making the state a world leader for R&D.

  • 2014 Technology & Innovation score: 245 points (out of 300)
  • Major tech firms: Raytheon, Genzyme, EMC
  • Patents issued in 2013: 6,409
  • 2013 Technology & Innovation rank: 7

4. Washington

Getty Images

The Evergreen State stands tall in technology and innovation. Microsoft is revolutionizing the way we work; and Costco are reshaping how we shop; Starbucks is changing the way we caffeinate. That last bit helps in a state with one of the highest concentrations of IT workers in the nation. Washington also ranks in the top five nationally for patents issued.

  • 2014 Technology & Innovation score: 246 points (out of 300)
  • Major tech firms: Microsoft,, F5 Networks
  • Patents issued in 2013: 5,878
  • 2013 Technology & Innovation rank: 4

3. New York

The Empire State Building and One World Trade Center are seen from the top of Rockefeller Center on March 21, 2014.
Getty Images

The Empire State reigns supreme when it comes to funding research and development. New York ranks in the top five nationally for medical, scientific and agricultural research funding. It ranked third in the number of patents issued last year. Gov. Andrew Cuomo sees high tech as just the ticket to revitalize economically disadvantaged parts of the state. A new program offers 10 years free of all taxes—including employees' income tax—for start-ups willing to partner with universities.

  • 2014 Technology & Innovation score: 249 points (out of 300)
  • Major tech firms: IBM, Verizon, L-3 Communications
  • Patents issued in 2013: 8,489
  • 2013 Technology & Innovation rank: 1

2. Texas

Dallas, Texas.
Jerry Driendl | Taxi | Getty Images

The state that lays claim to the first integrated circuit (Texas Instruments, 1958) is still deep in the heart of innovation. The Lone Star State shines when it comes to scientific, medical and agricultural research and ranked second in the nation for patents issued last year. The Texas Medical Center in Houston is billed as the largest medical complex in the world.

  • 2014 Technology & Innovation score: 254 points (out of 300)
  • Major tech firms: AT&T, Texas Instruments, BMC Software
  • Patents issued in 2013: 9,222
  • 2013 Technology & Innovation rank: 2

1. California

California tech companies: Apple Inc., Intel Corp, Google Inc. Cisco Inc.
Getty Images

The Golden State takes the gold—or comes close—in every measure of technology and innovation we look at. It's not just because this is the home of Silicon Valley. California is also America's biggest farm state, which helps it come in second for agricultural research funding (behind Wisconsin). The state leads the nation in patents issued. And for all the issues companies encounter trying to do business here—and there are plenty—1 in 10 new businesses started here is in tech, among the highest rates in the nation.

  • 2014 Technology & Innovation score: 289 (out of 300)
  • Major tech firms: Apple, Intel, Cisco Systems, Google
  • Patents issued in 2013: 36,193
  • 2013 Technology & Innovation rank: 2