CRI News


Long term trends
 
July 23, 2020
 
With funding from the U.S. Economic Development Administration, management guru Michael Porter has compiled time series data on the economic performance of states, counties, and metropolitan areas. The clear data generally starts in 1998 and ends with the latest updates…typically 2018.
 
 
After expressing the various measures of economic performance as growth rates, Porter then ranks all the states and counties against each other. His “US Cluster Mapping” system provides a quick way to assess the performance of any state or county over time. A rank of 1 indicates that a state has the highest growth rate while a rank of 50 records the lowest growth rate.
 
Delaware performs well on a number of measures: ranking 46th among the states in the growth in the poverty rate and 38th in the growth of the unemployment rate.
 
Delaware’s performance is less encouraging on the economic measures that undergird the long term health of a state’s economy.
 
Delaware ranks 50th in (a) per capita Gross Domestic Product (GDP) growth (from 2001-2018), (b) growth in GDP per labor force participant (productivity), and in (c) growth of Research and Development expenditures per capita (1998-2017).
 
Delaware ranks 47th in the growth of patents per 10,000 employees (1998-2016) In other words, Delaware’s poor record on productivity and weak investment in R&D tells us that Delaware’s anemic economic growth rate is unlikely to improve.
 
Conversely, Delaware ranks 1st among the states in the growth rate of state and local taxes as a percent of GDP (2002-2017). In the face of slow growth in output, state and local government in Delaware is raising its tax rates. When the Delaware government the largest employer in the state, you have a big problem.
 
Thanks to Michael Porter it is easy for corporations looking for new potential locations to compare alternative states and counties.

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