Delaware is ranked fourth among the list of states that are leading an economic transformation in adapting to an increasingly global, entrepreneurial, digital, and knowledge- and innovation-based "new economy," according to the 2008 State New Economy Index, released today by the Ewing Marion Kauffman Foundation and the Information Technology and Innovation Foundation at an event in Washington, D.C. to mark Entrepreneurship Week USA.
 
Delaware has held respectable spots on the State Index issued in 1999, 2002 and 2007, making steady climbs with each updated and expanded Index. Ranked 9th in both 1999 and 2002, then 7th in 2007, the state rose again in the new rankings, placing fourth overall.
 
“This report validates the efforts of the Minner Administration to ensure Delaware’s economy is structured and operates to effectively compete regionally as well as globally,” said Judy McKinney-Cherry, director of the Delaware Economic Development Office.

The report, however, comes on the heels of an announcement that the state is taking further cost-cutting measures over and above trimming more than $150 million out of the FY'09 budget and working to cut FY'10 revenues by more than $300 million.

“The current economy withstanding, Delaware has an environment that fosters innovation, globally-linked, entrepreneurial and dynamic opportunities, with an educated workforce.”
 
The Index, sponsored by the Ewing Marion Kauffman Foundation, ranks the 50 states according to how their economies are structured and their ability to operate effectively in order to compete nationally and globally. It divides 29 indicators into five categories that best capture the New Economy: knowledge jobs, globalization, economic dynamism, transformation to a digital economy and technological innovation capacity. The report also lays out an innovation-based policy agenda designed to help states succeed economically in these turbulent times.
 
According to the Index, Delaware tops the ranking because of its high concentration of managers, professionals and college-educated residents working in “knowledge jobs.” Delaware’s companies are more geared toward global markets, both in terms of export orientation and the amount of foreign direct investments. Delaware is at the forefront of the information technology and Internet revolutions, with a large share residents embracing the digital economy.
 
A copy of the Index can be downloaded at www.itif.org.

Gov. Ruth Ann Minner announced on Tuesday that the state would go even further in its efforts to control state spending as a result of the Nov. 18 meeting of the Delaware Economic Forecast Advisory Council.
 
“Unfortunately, we must take immediate action to reduce state spending in light of the continually deteriorating economic forecast,” Gov. Minner said. “We have had a number of management controls in place since the beginning of the fiscal year. We will make these even more restrictive to ensure that we continue to balance the budget. Unfortunately, even with our best efforts, this is a problem that will not be resolved for several months.”
 
Minner has re-instituted a hiring freeze and requested that state agencies submit a 7 percent cut in their budgets for the current fiscal year, as well as cuts of up to 15 percent for the upcoming fiscal year. No mid-year budget cuts are being requested of public or higher education. That is in addition to the review for purchase orders over $2,500 and no job reclassifications, both of which were already in place.
 
DEFAC reduced projected revenues in nearly every major revenue category, including personal income taxes, corporate income taxes, corporate franchise taxes, bank franchise taxes and realty transfer taxes. Combined with the September DEFAC results, estimates since July have fallen $190.6 million for the current fiscal year and $395 million for the upcoming fiscal year.
 
The hiring freeze does not include the legislature, judiciary, higher education or local school districts, nor does it pertain to previously approved positions in health and safety or 24-hour institutional settings or employees who are eligible for return to merit rights, as well as critical transition hires.
 
DEFAC will meet again on Dec. 15. Estimates from that meeting will be the basis for Gov. Minner’s recommended operating and capital budgets released in January.