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Report: East tops West in New Economy

California may be the center of the high-tech world, but the East Coast wins out when it comes to the top-performing states in the New Economy, a new report says.

California may be the philosophical center of the high-tech world, but the East Coast wins out when it comes to the top-performing states in the New Economy, according to a new report.

The Progressive Policy Institute, a nonprofit organization backed by the Democratic Leadership Council, on Monday released its New Economy Index of the 50 states, judging them based on 21 indicators including information technology jobs, online population, tech-savvy governments and the number of jobs in so-called gazelle companies, or businesses whose annual sales have grown 20 percent or more for four straight years.

The top 10 states in the 2002 report were Massachusetts, Washington, California, Colorado, Maryland, New Jersey, Connecticut, Virginia, Delaware and New York.

California slipped from the second position in the PPI's first state ranking conducted in 1999. Last year the PPI ranked Silicon Valley the top region for the New Economy.

The bottom five states in the 2002 survey were Wyoming, Alabama, Arkansas, Mississippi and W. Virginia.

The report also sought to put to rest the notion that the New Economy was simply a by-product of the dot-com bubble.

"Those who think the New Economy was some late-90s flash in the pan staked to the emergence of the dot-coms are roughly equivalent to the great wits who shouted "Get a horse!" at early motorists broken down on the side of the road," the report stated.

"It looks like the worst is behind us, and we are poised for a period of robust New Economy growth, perhaps less spectacular than the dizzying days of 2000, but strong all the same. It's clear that this was more than a one-time burst of energy that has dissipated."

The report found that across the nation, new industries, especially traded services and e-businesses, are becoming more important portions of regional economies. And most industries, even traditionally nontechnical ones, are organizing work around technology--for example, using computer-aided design to improve manufacturing.

In order to grow in the New Economy, states need to spur homegrown technological innovation and entrepreneurship, and develop a pool of skilled workers, according to the report.

"The key is not necessarily in attracting companies in New Economy industries, but rather ensuring that all of the companies become New Economy companies," the report stated. "In other words, adopting the latest technology, training their work force (and) exporting to global markets."