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DC and Maryland named top and 4th-best states for innovation

A report from WalletHub measuring all 50 states and DC found that the district and its surrounding states boast high numbers of STEM professionals, tech companies and other components that make them more innovative than much of the US.

A visualization of WalletHub's findings.

(Image via WalletHub report)

Although it’s not yet a state, DC was recognized in a new report as the country’s most innovative state, while its northern neighbor of Maryland landed three spots down at fourth place.

The report from WalletHub, a DC-based financial advice site, concluded that the district embraces economic and technological creativity more than any of the 50 actual states. Titled 2022’s Most & Least Innovative States, the study found that DC continues to grow innovation in its education, funding, research and new business creation realms. Meanwhile, Maryland came in at #4 and Virginia at #6 — a testament to the tech sector’s strength throughout the DMV and beyond — while Massachusetts and Washington state took the #2 and #3 spots.

To measure the rankings, WalletHub compared a number of characteristics within the categories of “human capital” and “innovation environment.” Metrics included the number of STEM graduates, scientific knowledge output and eighth-grade math and science performance in the former category, as well as invention patents per capita and entrepreneurial activity for the latter. The report graded states on a 100-point scale, with 100 as the most favorable for innovation.

DC scored 76 overall, ranking first in human capital and second in innovation environment. Maryland, whose tech sector incorporates active medtech scenes in cities like Baltimore and Gaithersburg, earned a score of 65.01 and nabbed the fifth and seventh spots in human capital and innovation environment, respectively. Virginia’s score of 63.11 landed it in the fourth and 10th spots of those same categories.

To reach this general top slot, DC came in at #1 in its percentage of science and engineering graduates over 25, number of technology companies, research and development spending per capita and VC funding per capita. It also ranked second in share of STEM professionals and projected STEM jobs by 2028.

Tian Heong Chan, an assistant professor at Emory University and one several scholars whose statements on regional innovation accompanied the report, said that the development of innovative and creativity-supporting economic hubs can create beneficial downstream effects throughout surrounding areas.

“Innovation tends to have significantly positive geographical spillovers (meaning firms, institutions, or individuals at close locations benefit from frequent collaborations, sharing of ideas, etc.),” Chan said. “So fostering/encouraging some kind of innovation hub (if none or few exist in the state), whereby such positive benefits of co-location can happen, would be a good start. I also think that the presence of maker spaces or coding spaces, where young kids can play and tinker with building products/software codes, is useful to encourage innovation from a young age.”

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The report is the latest in brag-worthy rankings for DC and Maryland. In 2021, the district was ranked as the 11th best startup ecosystem in the world by Startup Genome and the Global Entrepreneurship Network. Arlington, Virginia and DC also took the first and second spots, respectively, in SmartAsset’s annual Best Cities for Women in Tech report. The universities in Baltimore, Maryland’s largest city, landed at the top of the US News & World Report rankings that same year. Maryland had also jumped up to the top of the pack in CNBC’s annual ranking of best states for business.

See the full report -30-
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