The 2007 State New Economy Index, released by the Ewing Marion Kauffman Foundation and the Information Technology and Innovation Foundation (ITIF) ranks states on their success transitioning from industrial-based models to models which create and retain high-value, high-wage jobs.

Massachusetts held the top spot, with New Jersey and Maryland ranking second and third, respectively. Wisconsin, Vermont, North Dakota and Rhode Island made the greatest strides on the index from 2002 to 2007...

The most important driver of the new economy, according to the index, is information technology, which boosts productivity in virtually all industries.

"In order to succeed in the new global economy, states can no longer rely on a strategy of relentlessly driving down costs and providing large incentives to attract locationally mobile branch plants or offices," said Dr. Robert D. Atkinson, president of the Information Technology and Innovation Foundation and primary author of the Index.

"Rather, these states must create an environment that fosters innovation and high skills in order to help fast growing entrepreneurial firms and innovative existing firms expand."

According to the index, top-ranking states tend to be wealthier, have above-average levels of entrepreneurship, and have a high concentration of managers, professionals, and college-educated residents.