A recent study conducted by Merger & Acquisition Advisor found that California is the premier state in the U.S. for technology startups, scoring 88 out of 100. At the other end of the spectrum, Mississippi is ranked as the least conducive state for tech startups, scoring just 35.
This conclusion was drawn based on various parameters. These included: the number of Bachelor’s in Science & Engineering (S&E) degrees among 18-24 year-olds, the percentage of S&E occupants in the workforce, the number of venture capital deals in technology and knowledge sectors, venture capital investments relative to GDP, average business applications over the past 5 years, the business survival rate, tax rates, average weekly wages, and the Quality of Life (QOL) index in each state.
The data outcome was, for the top five states:
California
California takes the top spot, with 26.94 bachelor’s degrees in S&E per 1000 18 – 24-year-olds and 5.90 percent S&E occupants in the workforce. It boasts a significant venture capital investment in tech (0.40 percent of GDP) and impressive business applications (437,447) with a high survival rate of 55.20 percent.
Despite a higher tax rate of 8.80 percent, the state offers a comfortable average weekly wage of $1,658.50 and a high quality of life index of 137.6, securing its top position with a final score of 88.
New York
New York ranks second with strong representation in S&E education and workforce (31.05 bachelor’s degrees in S&E per 1000 18-24-year-olds and 4.40 percent S&E occupants in the workforce). The state sees a higher percentage of venture capital deals in tech (0.50% of GDP). It has a substantial number of business applications (264,837) with a survival rate of 53.90 percent.
The state’s lower tax rate of 6.50 percent and an average weekly wage of $1,756.50 contribute to a quality of life index of 134.5, resulting in a final score of 76.13.
Massachusetts
Massachusetts, ranks third with 38.16 bachelor’s degrees in S&E per 1000 18-24 year-olds and 7.10 percent S&E occupants in the workforce. It has a reasonable venture capital investment in tech (0.40% of GDP). It sees many business applications (65,308) with a survival rate of 55.00%. With an 8.00% tax rate and an average weekly wage of $1,757.00, the state offers a high quality of life index of 149.7, resulting in a final score of 74.8.
Florida
Florida, secures the fourth spot with a relatively lower percentage of S&E graduates (20.57 bachelor’s degrees in S&E per 1000 18-24-year-olds) and 3.60 percent S&E occupants in the workforce.
Texas
Texas ranks fifth, with 16.3 bachelor’s degrees in S&E per 1000 18-24-year-olds and 4.90 percent S&E occupants in the workforce. The state’s venture capital investment in tech is relatively low (0.10% of GDP), but it sees a considerable number of business applications (392,189) with a survival rate of 51.50 percent.
With a General Revenue Tax and an average weekly wage of $1,338.75, the state has a quality of life index of 92.5, resulting in a final score of 68.28.
Mushfiqur Sarker, Co-founder and Merger and Acquisition Advisor has told Digital Journal: “The top ten states for tech startups in the USA prioritize education and Science and Engineering (S&E) skills. They attract a lot of venture capital for tech and create a supportive startup environment. These states see many business applications and startups that survive, proving their tech ecosystems are thriving.”
