Study Indicates Policies Promoting High Tech and Entrepreneurship More Effective than Tax Cuts

A recent report indicates that state policies promoting high tech and entrepreneurship may be more effective in driving jobs creation and economic growth than state tax cuts. 

The report, compiled by Stephan Goetz, professor of agricultural economics and regional economics at Penn State, Mark Partridge, professor, and Shibalee Majumdar, doctoral student, both of Ohio State; and Dan Rickman, professor, Oklahoma State University, found that states with more technology classes in schools, higher domain name registrations, and more people online, tended to economically outperform states with a lower emphasis on technology.

The report, which was based on data collected from each state for 2000-2007, indicates “race-to-the-top” policies are much more connected to economic growth than other policies.

"Race-to-the-top policies are generally defined as those involving investments in education, entrepreneurship and infrastructure," says Goetz. "In contrast, race-to-the-bottom policies involve competition among the states for jobs by using lower taxes and industrial recruitment incentives."
Goetz says the key is for states to find the right mix of race-to-the-top and race-to-the-bottom policies to shore up their economies in uncertain times. 

For complete details, see the story as reported by R&D.