With over $800 billion spent annually on research and development, innovation remains a driving force behind the U.S. economy. A new WalletHub study ranks the most and least innovative states of 2025, measuring factors such as STEM job demand, R&D spending, and venture capital funding.
Top & Bottom Innovators of 2025
According to WalletHub’s findings, Washington, D.C. outperforms all 50 states in innovation due to its high concentration of STEM professionals and record-breaking R&D spending per capita. Meanwhile, Mississippi ranks as the least innovative state, struggling with low STEM job availability and minimal investment in research.
The study evaluates states based on 25 key metrics, including:
- STEM professionals per capita
- Projected STEM job growth by 2030
- Venture capital funding per capita
- R&D spending levels
- Math and science performance among students
How Did New York Rank?
New York placed 26th overall, with mixed results across categories:
- 30th in STEM professionals
- 45th in projected STEM-job demand
- 37th in student math & science performance
- 27th in science & engineering graduates
- 23rd in technology companies
- 14th in R&D spending per capita
- 5th in venture-capital funding
Despite its strong showing in R&D investment and venture capital, New York’s lagging STEM job growth and student performance indicate challenges in sustaining long-term innovation.
What Drives Innovation in the U.S.?
According to WalletHub Analyst Chip Lupo, successful innovation hubs foster STEM talent, research funding, and startup ecosystems. “The most innovative states offer abundant career opportunities and investment dollars, benefiting both established companies and new startups,” he explains.
Experts also highlight the importance of education and policy initiatives in fostering innovation:
- Investing in STEM programs to develop a highly skilled workforce
- Providing tax incentives for R&D to encourage corporate investment
- Creating innovation clusters that bring together corporations and startups
- Regulatory sandboxes that allow companies to experiment with emerging technologies
The Future of U.S. Innovation
As automation and AI reshape industries, experts emphasize the need for workforce adaptation. Kaveh Abhari, Ph.D., of San Diego State University, argues that states must fund reskilling programs to help displaced workers transition into emerging fields.
“Innovation isn’t about how much money is spent—it’s about creating conditions where entrepreneurs and researchers can thrive,” he states.
Full Rankings & State Data
For the complete rankings of 2025’s most and least innovative states, visit WalletHub’s official report.
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