Room to improve

See where Texas falls among most innovative states in the U.S.

Texas has some room to improve when it comes to being innovative. Getty Images

Texas isn't among the top 10 innovative states in the United States, according to a new study, but it isn't too far off. The Lone Star state ranked as the country's No. 15 most innovative state, as reported by WalletHub.

All 50 states and the District of Columbia were evaluated across 24 metrics two dimensions: human capital and innovation environment. Texas ranked No. 18 for its human capital and No. 14 for its innovation environment.

Texas' star shined bright across a few categories and made it in the top 10 in:

  • Business churn
  • Jobs in new companies
  • Entrepreneurial activity
  • Industry-cluster strength (refers to the level of high employment specialization of a cluster, which is defined by the U.S. Cluster Mapping Project as a "regional concentration of related industries in a particular location")
  • Average internet speed

The state performed the worst in the following categories:

  • Scientific-knowledge output (measures the number of peer-reviewed articles published per $1 Million of Academic S&E research and development)
  • Open roads and skies friendly laws
  • Average annual federal small-business funding per GDP
  • Share of households with internet access
  • Research and development spending per capita
  • Research and development intensity

The U.S. is expected to spend a reported $581 billion on research and development, according to WalletHub, which is more than any other country in the world. Some states, the study found, are better at pulling their weight. Massachusetts, Washington, D.C., Maryland, and Colorado make up the top five, in that order, while Tennessee, Iowa, West Virginia, Louisiana, and Mississippi round up the bottom of the list.

While there's much to learn from other innovative ecosystems, copying them is not the best plan, says expert on the study Joseph Tranquillo, Bucknell University professor and author.

"Trying to replicate an innovative ecosystem that has worked somewhere else never seems to turn out well," he says. "Like biological ecosystems, they must be homegrown from the strengths that already lie within."

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Building Houston

 
 

this one's for the ladies

Texas named a top state for women-led startups

A new report finds that the Lone Star State is ideal for female entrepreneurs. Photo via Getty Images

Who runs the world? According to Merchant Maverick's inaugural Best States for "Women-Led Startups'' study, Texas is a great place for women to be in charge.

The Lone Star state cracked the top 10 on the list, earning a No. 6 spot according to the small business reviews and financial services company, which based the study on eight key statistics about this growing segment of the economy. Colorado (at No. 1), Washington, Virginia, Florida, and Montana were the only states to beat out Texas on the rankings—leading the Merchant Maverick team to conclude that "the part of the country that lies west of the Mississippi is great for startups led by women entrepreneurs."

Women-led startups in Texas received $365 billion in VC funding in the last five years, the report found. This is the seventh largest total among U.S. states. Too, about 20 percent of Texans are employed at woman-led firms, which is the fifth highest percentage among states. Roughly 35 percent of employers in Texas are led by women.

A few other key findings that work in female founders' favor: The startup survival rate in Texas is nearly 80 percent. And a lack of state income tax "doesn't hurt either," the report says.

Still there are shortcomings. On a per capita basis, only 1.27 percent of Texas women run their own business. The average income for self-employed women is also relatively low ranking among states, coming in around $55,907 and landing at 31st among others.

This is not the first time Texas has been lauded as a land of opportunity for women entrepreneurs. A 2019 study named it the best state for business opportunities for women. Houston too has proven to support success for the demographic. The Bayou City was named in separate studies a best city for female entrepreneurs to start a business and to see it grow.

Still, as many findings have concluded, the realities of the pandemic loom for all startups and small business owners. The Merchant Maverick study was careful to add: "The pandemic has changed the economic landscape over the past year, and often for the worse.

"This means that not every metric may be able to accurately gauge how a state might fare amidst the pandemic," the report continues. "To help factor in COVID's impact, we included some metrics that take 2020 into account, but it will be a while until we get a full picture of the pandemic's devastation.""

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