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Ranked: The Best and Worst State Economies

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Ranked: The Best and Worst State Economies

Ranked: The Best and Worst State Economies

View the high resolution version of today’s graphic by clicking here.

On a global scale, the U.S. economy is massive at close to $19 trillion in size.

However, the United States is also the sum of its parts. America represents the union of 50 states and other jurisdictions such as D.C., and all of these state-level economies have their own unique problems to overcome, drivers of growth, and local resources that factor into their prosperity.

How can we compare these state economies on an even playing field?

Ranked: State Economies

Using absolute numbers, it’s hard to directly compare California ($2.75 trillion GDP, 39.5 million people) to a state like Vermont ($33 billion, 0.6 million people). By leveling the playing field, we can get an idea of how states contrast in terms of relative economic strength that companies and workers would better recognize.

Today’s infographic uses 27 metrics from WalletHub to rank state economies. These metrics are grouped into three major categories, which are evenly weighted:

1. Economic Activity: GDP growth, startup activity, exports per capita, and three other metrics
2. Economic Health: Labor force changes, median household income, unemployment, and 13 other metrics
3. Innovation Potential: Entrepreneurial activity, R&D investment, patents per capita, and three other metrics

Note: the full methodology with all 27 factors can be found here.

Here’s how the rankings shake down, for all 50 state economies and D.C.:

OverallStateTotal ScoreEconomic ActivityEconomic HealthInnovation Potential
1Washington76.5143
2California73.82262
3Utah73.8514
4Massachusetts73.34291
5District of Columbia67.13613
6Colorado66.41535
7Oregon65.76910
8New Hampshire62.517107
9Maryland61.018286
10Delaware59.8102015
11Idaho58.221219
12Michigan57.923338
13Virginia57.591823
14Arizona57.4162414
15North Carolina57.3241112
16Connecticut57.312459
17Minnesota56.6201617
18Georgia56.082129
19New York55.774418
20Texas55.4191521
21New Jersey55.1114711
22Florida54.5131230
23Missouri50.2341924
24South Carolina49.8142341
25Wisconsin49.2331431
26Vermont49.1353122
27Nebraska49.036734
28Indiana48.9262535
29Nevada48.1222740
30Pennsylvania47.7254127
31Montana47.7461325
32South Dakota47.139539
33Iowa47.0312237
34Illinois46.9274326
35Tennessee46.4291744
36Rhode Island46.0404020
37Ohio45.7304228
38Kansas44.3433432
39Hawaii43.7383038
40New Mexico42.1445116
41Alabama41.6323843
42North Dakota41.151836
43Wyoming39.4473245
44Kentucky38.9284648
45Maine38.9373647
46Alaska37.7503933
47Oklahoma37.1493742
48Arkansas35.9453550
49Mississippi35.0414846
50Louisiana33.2425049
51West Virginia28.1484951

Topping the list for overall score were the states of Washington, California, and Utah, and the first place state in each major category includes Washington (Economic Activity), Utah (Economic Health), and Massachusetts (Innovation Potential).

Case in Point

Looking at statistics and scoring methodologies alone can be a bit esoteric, so let’s look at some individual cases to see some contrast.

Utah (Rank: #3)
Utah consistently ranks as one of the top states for business, in the country, as well as a top state for job growth and employment. It’s also pretty unique in that it has a fairly diversified economy, with major sectors in the tourism, agriculture, tech, manufacturing, finance, energy, and mining industries.

Utah has a higher median household income ($65,977), and a blistering 3.4% employment growth rate.

Florida (Rank: #22)
Using this methodology, Florida falls somewhere in the middle of the rankings. The good news is the state has good employment growth (2.9%) and a myriad of thriving industries like aerospace. The bad news? Florida has the second-highest level of poverty in the union at 19%, and it also has a lower median household income ($50,860) than the national average.

Maine (Rank: #45)
Economic activity is sluggish in the country’s most northeastern state. With an aging population, slow employment growth (0.8%), and a number of lost manufacturing jobs over the last 15 years, the state is trying to rebound. Maine isn’t helped by having one of the highest tax burdens for its citizens and businesses in the country, either.

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Cities

Mapped: The World’s Top 10 Cities in 2035

Cities are heavy hitters in the global economy. Where will the top 10 cities be in 2035—based on GDP, population, and annual growth?

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Mapped: Where Will The Top 10 Cities Be in 2035?

Cities are the engines of the modern economy. Over half of the world now lives in urban areas, and urbanization continues to shape the trajectory of global growth in unprecedented ways.

However, the most important cities of today may be quite different than those leading the charge in the future. This week’s chart looks forward to 2035, using a report by Oxford Economics to forecast the top 10 cities by measures of economic size, population, and GDP growth rate.

Each map is categorized by one of these metrics—and depending on which one you look at, the leaders vary greatly.

Top 10 Cities by Projected GDP

The top 10 cities by gross domestic product (GDP) in 2035 will be fairly widespread. Three cities are expected to be in the U.S.—New York, Los Angeles, and Chicago. The Big Apple’s forecasted $2.5 trillion GDP likely stems from its strong banking and finance sectors.

RankCityCountry2035 GDP
#1New York🇺🇸 United States$2.5T
#2Tokyo🇯🇵 Japan$1.9T
#3Los Angeles🇺🇸 United States$1.5T
#4London🇬🇧 United Kingdom$1.3T
#5Shanghai🇨🇳 China$1.3T
#6Beijing🇨🇳 China$1.1T
#7Paris🇫🇷 France$1.1T
#8Chicago🇺🇸 United States$1.0T
#9Guangzhou🇨🇳 China$0.9T
#10Shenzhen🇨🇳 China$0.9T

Four cities will be found in China, while London, Paris, and Tokyo are set to round out the last three. Interestingly, Tokyo is the #1 city today, with an estimated $1.6 trillion GDP in 2019.

Altogether, these top 10 cities will contribute an impressive $13.5 trillion in GDP by 2035. Clusters of such metropolitan areas are typically considered megaregions—which account for a large share of global economic activity.

Top 10 Cities by Future Population

Next, it’s clear that top cities by population will follow a distinct global distribution. By 2035, the most highly-populated cities will shift towards the East, with seven cities located in Asia.

RankCityCountry2035 Population
#1Jakarta🇮🇩 Indonesia38 million
#2Tokyo🇯🇵 Japan37.8 million
#3Chongqing🇨🇳 China32.2 million
#4Dhaka🇧🇩 Bangladesh31.2 million
#5Shanghai🇨🇳 China25.3 million
#6Karachi🇵🇰 Pakistan24.8 million
#7Kinshasa🇨🇩 DR Congo24.7 million
#8Lagos🇳🇬 Nigeria24.2 million
#9Mexico City🇲🇽 Mexico23.5 million
#10Mumbai🇮🇳 India23.1 million

While Jakarta’s 38 million-strong population is expected to emerge in first place, the city may not retain its status as Indonesia’s capital for much longer. Rising sea levels and poor water infrastructure management mean that Jakarta is rapidly sinking—and the government now plans to pivot the capital to Borneo island.

On the African continent, Kinshasa and Lagos are already among the world’s largest megacities (home to over 10 million people), and will hold top spots by the turn of the century.

Population and demographics can be major assets to a country’s growth. For example, India’s burgeoning working-age demographics will present a unique advantage—and the country is projected to contain several of the fastest growing cities in the coming years.

Top 10 Cities By Estimated Annual GDP Growth

When comparing cities based on their pace of economic growth, there are some clear standouts. Average annual GDP growth across cities is 2.6%, but the top 10 surpass this by a fair amount.

The kicker? All of 2035’s major players will be found in Asia: four of the fastest-growing cities will be in mainland China, another four in India, and the last two in Southeast Asia.

RankCityCountryAnnual Growth
#1Bengaluru🇮🇳 India8.5%
#2Dhaka🇧🇩 Bangladesh7.6%
#3Mumbai🇮🇳 India6.6%
#4Delhi🇮🇳 India6.5%
#5Shenzhen🇨🇳 China5.3%
#6Jakarta🇮🇩 Indonesia5.2%
#7Manila🇵🇭 Philippines5.2%
#8Tianjin🇨🇳 China5.1%
#9Shanghai🇨🇳 China5.0%
#10Chongqing🇨🇳 China4.9%

At #1 by 2035 is Bangalore with an expected 8.5% annual growth forecast—its high-quality talent pool makes the city a breeding ground for tech startups. Jakarta makes another appearance, with its projected 5.2% growth at double the city average.

Shanghai finds its way onto all three lists. The commercial capital hosts the world’s busiest port, and one of China’s two major stock exchanges. These sectors could help boost Shanghai’s annual GDP growth to 5% in 2035.

Looking to the Future

Of course, any number of variables could impact these 2035 projections, from financial recessions and political uncertainty, to rapid urbanization and technological advances.

But one thing’s certain—in the coming decades, cities are where many of these factors will converge and play out.

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China

The People’s Republic of China: 70 Years of Economic History

How did China go from agrarian economy to global superpower? This timeline covers the key events and policies that shaped the PRC over its 70-year history.

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Chart: 70 Years of China’s Economic Growth

View a high-resolution version of this graphic here.

From agrarian economy to global superpower in half a century—China’s transformation has been an economic success story unlike any other.

Today, China is the world’s second largest economy, making up 16% of $86 trillion global GDP in nominal terms. If you adjust numbers for purchasing power parity (PPP), the Chinese economy has already been the world’s largest since 2014.

The upward trajectory over the last 70 years has been filled with watershed moments, strategic directives, and shocking tragedies — and all of this can be traced back to the founding of the People’s Republic of China (PRC) on October 1st, 1949.

How the PRC Came to Be

The Chinese Civil War (1927–1949) between the Republic of China (ROC) and the Communist Party of China (CPC) caused a fractal split in the nation’s leadership. The CPC emerged victorious, and mainland China was established as the PRC.

Communist leader Mao Zedong set out a few chief goals for the PRC: to overhaul land ownership, to reduce social inequality, and to restore the economy after decades of war. The first State Planning Commission and China’s first 5-year plan were introduced to achieve these goals.

Today’s timely chart looks back on seven decades of notable events and policies that helped shape the country China has become. The base data draws from a graphic by Bert Hofman, the World Bank’s Country Director for China and other Asia-Pacific regions.

The Mao Era: 1949–1977

Mao Zedong’s tenure as Chairman of the PRC triggered sweeping changes for the country.

1953–1957: First 5-Year Plan
The program’s aim was to boost China’s industrialization. Steel production grew four-fold in four years, from 1.3 million tonnes to 5.2 million tonnes. Agricultural output also rose, but it couldn’t keep pace with industrial production.

1958–1962: Great Leap Forward
The campaign emphasized China’s agrarian-to-industrial transformation, via a communal farming system. However, the plan failed—causing an economic breakdown and the deaths of tens of millions in the Great Chinese Famine.

1959–1962: Lushan Conference and 7,000 Cadres meeting
Top leaders in the Chinese Communist Party (CCP) met to create detailed policy frameworks for the PRC’s future.

1966–1976: Great Proletarian Cultural Revolution
Mao Zedong attempted to regain power and support after the failures of the Great Leap Forward. However, this was another plan that backfired, causing millions more deaths by violence and again crippling the Chinese economy.

1971: Joined the United Nations
The PRC replaced the ROC (Taiwan) as a permanent member of the United Nations. This addition also made it one of only five members of the UN Security Council—including the UK, the U.S., France, and Russia.

1972: President Nixon’s visit
After 25 years of radio silence, Richard Nixon was the first sitting U.S. President to step foot into the PRC. This helped re-establish diplomatic relations between the two nations.

1976–1977: Mao Zedong Death, and “Two Whatevers”
After Mao Zedong’s passing, the interim government promised to “resolutely uphold whatever policy decisions Chairman Mao made, and unswervingly follow whatever instructions Chairman Mao gave.”

1979: “One-Child Policy”
The government enacted an aggressive birth-planning program to control the size of the country’s population, which it viewed as growing too fast.

A Wave of Socio-Economic Reforms: 1980-1999

From 1980 onward, China worked on opening up its markets to the outside world, and closing the inequality gap.

1980–1984: Special Economic Zones (SEZs) established
Several cities were designated SEZs, and provided with measures such as tax incentives to attract foreign investment. Today, the economies of cities like Shenzhen have grown to rival the GDPs of entire countries.

1981: National Household Responsibility System implemented
In the Mao era, quotas were set on how many goods farmers could produce, shifting the responsibility of profits to local managers instead. This rapidly increased the standard of living, and the quota system spread from agriculture into other sectors.

1989: Coastal Development Strategy
Post-Mao leadership saw the coastal region as the potential “catalyst” for the entire country’s modernization.

1989–1991: Post-Tiananmen retrenchment
Early 1980s economic reforms had mixed results, and the growing anxiety eventually culminated in a series of protests. After tanks rolled into Tiananmen Square in 1989, the government “retrenched” itself by initially attempting to roll back economic reforms and liberalization. The country’s annual growth plunged from 8.6% between 1979-1989 to 6.5% between 1989-1991.

1990–1991: Shanghai and Shenzhen stock exchanges open
Combined, the Shanghai (SSE) and Shenzhen (SZSE) stock exchanges are worth over $8.5 trillion in total market capitalization today.

1994: Shandong Huaneng lists on the NYSE
The power company was the first PRC enterprise to list on the NYSE. This added a new N-shares group to the existing Chinese capital market options of A-shares, B-shares, and H-shares.

1994–1996: National “8-7” Poverty Reduction Plan
China successfully lifted over 400 million poor people out of poverty between 1981 and 2002 through this endeavor.

1996: “Grasp the Large, Let Go of the Small”
Efforts were made to downsize the state sector. Policy makers were urged to maintain control over state-owned enterprises to “grasp the large”. Meanwhile, the central government was encouraged to relinquish control over smaller SOEs, or “let go of the small”.

1997: Urban Dibao (低保)
China’s social safety net went through restructuring from 1993, and became a nationwide program after strong success in Shanghai.

1997-1999: Hong Kong and Macao handover, Asian Financial Crisis
China was largely unscathed by the regional financial crisis, thanks to the RMB (¥) currency’s non-convertibility. Meanwhile, the PRC regained sovereignty of Hong Kong and Macau back from the UK and Portugal, respectively.

1999: Western Development Strategy
The “Open Up the West” program built out 6 provinces, 5 autonomous regions, and 1 municipality—each becoming integral to the Chinese economy.

Turn of the Century: 2000-present

China’s entry to the World Trade Organization, and the Qualified Foreign Institutional Investor (QFII) program – which let foreign investors participate in the PRC’s stock exchanges – contributed to the country’s economic growth.

Source: CNBC

2006: Medium-term Plan for Scientific Development
The PRC State Council’s 15-year plan outlines that 2.5% or more of national GDP should be devoted to research and development by 2020.

2008-2009: Global Financial Crisis
The PRC experienced only a mild economic slowdown during the crisis. The country’s GDP growth in 2007 was a staggering 14.2%, but this dropped to 9.7% and 9.5% respectively in the two years following.

2013: Belt and Road Initiative
China’s ambitious plans to develop road, rail, and sea routes across 152 countries is scheduled for completion by 2049—in time for the PRC’s 100th anniversary. More than $900 billion is budgeted for these infrastructure projects.

2015: Made in China 2025
The PRC refuses to be the world’s “factory” any longer. In response, it will invest nearly $300 billion to boost its manufacturing capabilities in high-tech fields like pharmaceuticals, aerospace, and robotics.

Despite the recent ongoing trade dispute with the U.S. and an increasingly aging population, the Chinese growth story seems destined to continue on.

China Paving the Way?

The 70th anniversary of the PRC offers a moment to reflect on the country’s journey from humble beginnings to a powerhouse on the world stage.

Because of China’s economic success, more and more countries see China as an example to emulate, a model of development that could mean moving from rags to riches within a generation.

Bert Hofman, World Bank

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