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WalletHub released its 2025 Most & Least Innovative States study on Wednesday, Mar. 19. The study evaluated all 50 states and Washington, DC, using 25 key factors, including STEM job concentration, research and development spending, and tech industry presence.
Washington, DC, took WalletHub's top spot, driven by its high concentration of professionals in science, technology, engineering, and math. The nation's capital was also recognized for strong investments in research and development.
The study found that 54 percent of degree-holding DC residents 25 and older have STEM degrees, the highest percentage in the country.
"DC is preparing its youth well for innovation, as the district has the highest [Advanced Placement] exam participation rate among high school students, at nearly 58 percent," WalletHub financial writer Adam McCann said. "In addition to learning more advanced math and scientific abilities than they would in regular high school classrooms, students who enroll in AP courses are better equipped for the demands of college."
Massachusetts, home to tech hubs like Boston and Cambridge, only trailed DC in the WalletHub rankings. The state benefits from institutions like the Massachusetts Institute of Technology and Harvard University, with the tech sector accounting for nearly 13 percent of its economy.
Building 10 and Great Dome overlooking Killian Court on the campus of the Massachusetts Institute of Technology in Cambridge, MA.
The Bay State also boasts some of the highest eighth-grade math and science scores in the country, helping cultivate a strong talent pipeline.
"To top things off, Massachusetts ranks as the second-highest in the country when it comes to [research and development] spending per capita and the fourth-highest venture capital funding per capita," McCann wrote.
Maryland, home to Johns Hopkins University and NASA's Goddard Space Flight Center, ranks sixth overall, thanks to its large STEM workforce, along with federal research and development investments. The Old Line State is also expected to keep growing with the nation's second-highest STEM job demand projected by 2030.
The Billings Hospital Administration Building at Johns Hopkins Hospital in Baltimore.
Virginia followed closely behind in seventh place, benefiting from its strong high-tech business presence, particularly in Northern Virginia's defense and cybersecurity industries. The state has the second-largest share of tech companies, only behind nearby Delaware.
New Jersey rounded out the top 10, excelling in pharmaceutical research and tech. The Garden State has the fourth-fastest average internet speed, along with top-ten finishes in research and development spending, as well as venture capital funding per capita.
Connecticut significantly trails its northern neighbor but still broke into the top half of the rankings at No. 17. The Constitution State is boosted by the country's second-fastest internet speeds and a solid STEM workforce, but was held back by slower business growth and lower venture capital funding.
New York finished right in the middle at 26th overall. While the Empire State ranked fifth in venture capital funding, its share of STEM professionals per capita lagged, along with research and development spending.
Pennsylvania was ranked in 29th place, hindered by lower numbers in key innovation indicators such as tech business growth and STEM job demand.
"Traditional incentives like tax breaks and grants play a role, but they are not enough to create a sustainable innovation ecosystem," said Kaveh Abhari, a business and information systems professor at San Diego State University. "States must take a structural approach, building distributed innovation ecosystems where each node operates as a public-private partnership focused on a specific area of innovation."
According to WalletHub, the US spends more than $800 billion annually on research and development, and states that lead in innovation tend to bring in top talent and investment.
"The most innovative states are especially attractive to people who have majored in science, technology, engineering and math, or STEM, as they offer abundant career opportunities and investment dollars, both for jobs at existing companies and for startups," said WalletHub analyst Chip Lupo. "These states also instill young students with the skills they need to succeed in the current workforce, skills which are useful whether or not they pursue a STEM career."
In 2024, the US ranked third out of 133 countries on the Global Innovation Index, behind only Switzerland and Sweden.
You can click here to see WalletHub's full 2025 study of the nation's most and least innovative states.
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