Innovation Index Will Track State's High-Tech Economy
Feb. 2004

This article was contributed by AUBER member C. David Billings from the University of Alabama in Huntsville.

Innovation can be the single most important factor in Alabama's economic growth during the 21st century, according to economic development experts.

It was important that the state establish an index to determine how well Alabama performs and to reveal the system's weaknesses, according to Dr. Bill Killingsworth, author of a new innovation index and director of the Center for Economic Development at the University of Alabama in Huntsville (UAH).

"Research and innovation drive competitive-ness, productivity, and economic growth," Killingsworth said. "Without innovation, companies fail, industries wither, and jobs disappear."

He noted that Alabama is experiencing troubling declines in a number of industries, such as textiles. Others are in similar dangers, such as chemicals, plastics, and pulp and paper.

"It is imperative that Alabama quickly become more innovative. Emerging and existing growth industries must be strengthened and positioned for the future. No longer is it sufficient to say, 'Alabama is a low-cost place to do business.' Wemust say, 'Alabama is a productive place to do business.' And that means research and innovation."

Killingsworth said a new innovation index developed by UAH, with sponsorship from the governor's office and the Alabama Department of Economic and Community Affairs, will benchmark innovation within Alabama. The index will let officials see Alabama's strengths and where to improve the state's weaknesses.

The Alabama Innovation Index includes 20 indicators in three broad categories: high-paying jobs and improving the standard of living; state-wide research capacity; and investment capital and development.

Overall, Alabama compares favorably with neighboring states in several measures of innovation, according to Killingsworth. However, Alabama and other southeastern U.S. states fall well behind the national average on these factors. For instance, Alabama ranks 30th in the nation for total R&D expenditures on a per capita basis. The amount of R&D spent in Alabama totaled $1.73 billion. On a per capita basis, that amounts to $389.04 for everyman, women, and child in Alabama.

While that figure was better than every other southeastern state, the national average is $873.87.Massachusetts had the highest per capita figure, with more than $2,048, followed by Delaware at$1,955, Michigan at $1,900, Washington with$1,784, and New Mexico with $1,695.

Alabama fares well in the number of science and engineering doctorates per 100,000 residents compared with other southeastern states. The state has 6.8 doctorates per 100,000, second best in the southeast. Only Georgia is higher, with 7.1. But the national average is 9.2.

Alabama also fares well when comparing high-tech employment as a percentage of total employment. The index shows that Alabama has a 6.49%figure-good enough for second in the southeast. Tennessee was higher; with 7.39%.

Alabama is near the bottom in generating patents. The number of patents per 10,000employees is 2.1 for the state. Only Mississippi is lower in the southeastern United States.

Florida ranks first in the region, with 4.2 patents per 10,000 employees. The national average is 7.5.

Killingsworth said Alabama must expand and diversify its R&D activities in order for the state to have a vibrant, innovative, and competitive economy.

"This is a daunting challenge, but not impossible," he said. "For maximum job creation, Alabama must target those research areas that can have the greatest economic impact in the state. For the greatest likelihood of success, Alabama must build upon its current strengths and assets, not a random wish list. These requirements demand that a plan be developed for identifying target research are as and funding sources.

"With research funding in strategically targeted areas, Alabama can more rapidly move on its path to a manufacturing and knowledge based economy with good jobs and higher wages for its citizens."

This article was contributed by AUBER member C. David Billings from the University of Alabama in Huntsville.

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