The Consumer Technology Association (CTA) has released their 2016 Innovation Scorecard, an annual index that grades every state and the District of Columbia based off their adoption of policies that drive economic growth, employment, and innovation. As can be seen by home values (and tight inventory) in tech hubs like Seattle and Silicon Valley, innovation is a huge driver of job growth and consequently, the demand for new housing.

" Sensible tax structures, regulators who allow cutting-edge technologies to flourish, and legislators who welcome new kinds of businesses are crucial to sustaining innovation. The states that enable innovators to do their work draw entrepreneurs from across the country, creating high-quality jobs and investing in a state’s healthy economy for the future. "

Based off their overall score across 10 qualitative and quantitative criteria, states fall into four categories: Innovation Champions, Innovation Leaders, Innovation Adopters, and Modest Innovators. Twelve states and the District of Columbia earned highest marks in the 2016 index as Innovation Champions.

The CTA's heatmap displays which title each state earned this year, based on overall score.
The CTA's heatmap displays which title each state earned this year, based on overall score.

For the second year in a row, D.C. earned top grades in six of the 10 Scorecard categories, a significant achievement considering the small size of the capital district. California earned the top score for attracting investment, with over $32 billion in total funding (more venture capital and research and development funding than every other state put together), but despite being home to Silicon Valley, the state misses the mark to be included in the Innovation Champion category, due the state's "continued burdensome regulations on energy efficiency and unfavorable tax policies."

Specifically, eight of the 10 quantitative and qualitative criteria below (not all states receive scores for sustainable policies and drone policies) are graded in every state and the District of Columbia:

  • Right-to-Work laws: states that allow "union security agreements" that make it mandatory for worker to participate in established labor unions receive a F
  • The number of STEM-related degrees per 1,000 individuals age 18-24 years-old
  • Investment-per-capita in government and corporate research and development to determine the level of venture capital investment
  • State and municipal laws/regulations affecting new business models (like ridesharing and homesharing)
  • The average number of small firms created per capital and net job creation by those firms
  • Tax policies that allow firms to create more jobs, keep more money earned, and increase development investment
  • The number of jobs per-capita in tech related field (which signals a state's ability "to grow and attract well-education talent and high-wage employers")
  • Adoption of innovation-friendly sustainable policies
  • Average internet connection speed in kilobits-per-second
  • Drone policies (states that added drones to the list of technology covered under existing privacy laws and passed legislation that prevent counties and cities from restricting or prohibiting the testing or operation of drones received higher marks, while states that created new drone-specific crimes and policies to regulate drones that conflict with existing federal regulation received lower marks)

The following states received highest marks for tech jobs per capita, and could be home to rising markets that will demand greater housing inventory in years to come:

  1. Washington D.C.
    Tech jobs per capita: 0.1685
    Employees in the technology field: 101,410
  2. Virginia
    Tech jobs per capita: 0.0560
    Employees in the technology field: 448,820
  3. Massachusetts
    Tech jobs per capita: 0.0555
    Employees in the technology field: 363,980
  4. Maryland
    Tech jobs per capita: 0.0501
    Employees in the technology field: 289,770
  5. Minnesota
    Tech jobs per capita: 0.0493
    Employees in the technology field: 261,860
  6. Colorado
    Tech jobs per capita: 0.0489
    Employees in the technology field: 246,310
  7. Washington
    Tech jobs per capita: 0.0485
    Employees in the technology field: 326,520
  8. New Hampshire
    Tech jobs per capita: 0.0433
    Employees in the technology field: 57,050
  9. Utah
    Tech jobs per capita: 0.0426
    Employees in the technology field: 117,940
  10. Connecticut
    Tech jobs per capita: 0.0421
    Employees in the technology field: 150,470

View the full report to see state-by-state profiles and state rankings for each category in the index.