For the first time, North Carolina has broken into the top 10 states in the nation for innovation, ranking No. 9 in the 2026 Tracking Innovation report by the NC Department of Commerce, which is based on 41 measures. In addition, the state’s innovation economy has improved faster than that of the US overall since the early 2000s.
“The strong ranking for innovation bolsters the argument that legislators should claw back the entire $500 million in taxpayer dollars it directed to NCInnovation,” Brian Balfour, senior vice president of research at the John Locke Foundation, told the Carolina Journal. “The state is excelling in innovation without that untested organization; that half a billion dollars is more urgently needed elsewhere. Hurricane relief would be one such example. Moreover, innovation thrives in environments where researchers, developers, and entrepreneurs are relatively free from government interference and taxation, allowing for freedom of creativity and the proper incentives to encourage more of it.”
North Carolina has demonstrated growth and strength across several key innovation measures, according to a press release. Long-standing strengths include academic research and development expenditures and academic article output, for both of which the state ranks No. 5 nationally.
University academic license income has increased by 149% and startup formation by 9.8% since 2000, both outpacing the US average, particularly academic license income, which has declined nationally.
Since 2000, federal non-dilutive Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) funding for early-stage technology companies has grown at a rate seven times the national average, keeping the state above the US average.
Over the same period, knowledge- and technology-intensive (KTI) business establishments have increased by 111%, nearly twice the national rate, and these establishments pay average wages roughly double those of businesses overall. Since 2003, the state’s share of workers in science and engineering occupations has also increased by 83%, outpacing the national rate and remaining above the US average.
Since 2001, gender and ethnic diversity within KTI industries, which the NC Department of Commerce considered as part of their metrics, has consistently exceeded the national average. At the same time, in-migration of college-educated adults has grown at a rate three times that of the US since 2005, reflecting expanding opportunities for workers contributing to the innovation economy. These innovation strengths are also becoming more geographically widespread, with a growing number of counties outperforming the national average across multiple measures.
In addition to identifying areas of strength in the state’s economy, the report identifies key areas for improvement, such as expanding innovation capacity across more regions and broadening the state’s strengths across a wider range of high-tech sectors.
“Innovation is a critical force multiplier that raises the standard of living of North Carolinians and an accelerator that helps create new industries, keep existing ones globally competitive, advance national security, and drive future economic growth and well-being,” Greg Copenhaver, acting chair of the North Carolina Board of Science, Technology & Innovation, said in a press release. “Innovative regions are better equipped to resist and recover from economic shocks, and North Carolina’s ability to thrive in an increasingly dynamic, global economy depends on how much we infuse innovation throughout our state.”
The report also spotlights broadband and internet disparities across the state, noting that current expenditures for elementary and secondary public schools lag behind the national average and the spending levels of nearly all other states.
The report concludes that improvements in economic growth, wages, and workforce incomes must accelerate to keep pace with the national average, as the state’s population continues to grow rapidly.
The full report can be viewed here.