A recent report shows Delaware ranked third in a listing of the most dynamic states, driven in part by the state’s high number of workers employed by young businesses.
Delaware was the only state to achieve the high ranking in an area extending from Maine to Georgia. The rankings were based on 2022 stats. Delaware ranked first on the index a year earlier.
A surge in pandemic-era startup activity has helped boost the economic dynamism of the average U.S. state to a 13-year high, according to the latest edition of the Index of State Dynamism released by the Economic Innovation Group.
The index measures ranks states on 8 core measures of economic dynamism including the startup rate, movement of workers, and pace of innovation.
The pandemic boosted American dynamism across several key measures. This silver lining of the Covid era is largely due to record-high growth in new business applications, higher rates of net migration, and an increase in new housing permits. Despite this progress, American dynamism remains far below historical norms.
The Mountain West and Sun Belt states are the epicenters for dynamism. The most economically stagnant states are clustered in Appalachia and the South, with New York now joining the ranks of the least dynamic state economies.
The Empire State fell to its worst ranking in 25 years. Unlike other powerhouse states like California, Florida, and Texas, New York has become one of the least dynamic economies in the country. New York’s steep five-year drop from 22nd to 46th represents the largest decline in the nation and a complete reversal of the state’s resurgence from the 1990s up through the Great Recession.
