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States with the most diverse economies

  • States with the most diverse economies

    Industrial development is a thorny issue. While the promise of new jobs can secure votes, these deals are typically shaped to give benefits to the employer that may exceed the economic value of the move.

    Take, for example, the Foxconn deal in Wisconsin. Under former Gov. Scott Walker, the state approved the largest subsidy deal to a foreign firm in history—between $3 billion and $4.8 billion, depending on if Foxconn meets certain targets—in exchange for a $10 billion factory that would employ 3,000 state employees. The deal dictates that employment would grow to 13,000 as early as 2022. The deal was criticized from the start, with independent analysts suggesting that the deal would not break even until 2043 (reported by the Verge), that Foxconn has broken similar deals with other locations in the past (reported by CNN), and that the state is paying between $231,000 and $346,000 per job. However, desperation from the deal allowed the Walker administration to ignore red flags and to waive environmental protections.

    Despite the deal, Foxconn has indicated that it is reconsidering its manufacturing plans due to labor costs. As the end of 2018, Foxconn only employed 200 in-state employees in spite of significant drains to local and state coffers. Wisconsin reflects a cautionary tale about the importance of state industry on the economics of the state. But, is there a way to measure the health of a state's industrial base?

    Stacker examined data from the United States Bureau of Economic Analysis data (last updated in 2017) to determine the nation's most diverse economies. To weigh this, we relied on the Herfindahl-Hirschman Index—a measure to determine a firm's or industry's concentration in a market. HHI index was calculated with 14 private industries and government/government enterprises. The more likely a firm or industry has a monopoly on the market, the higher the score would be. Full dominance of a market would be reflected by a score of 10,000. The US Department of Justice uses HHI scores to determine if a firm is a monopoly. The national HHI is 945.5.

    Results are ranked by HHI index from high to low, with a low index representing a more diverse economy. Stacker's gallery shows how much of the state's/territory's GDP is government spending, what are the state's largest private industries, and how many industries contribute more than 4% to the state's gross domestic product (GDP).

    Keep reading to find out if your state is the most or least economically diverse state on our list.

    You may also like: Cany you answer these real Jeopardy questions about the economy?

  • #51. District of Columbia

    - HHI index: 2,000.5
    - Industries over 4% GDP: 7
    - Government and government enterprises: $44.8 billion, 33.5% of state GDP
    - Top private industries:
    --- #1. Professional and business services: $33.1 billion, 24.7% of state GDP
    --- #2. Real estate and rental and leasing: $12.2 billion, 9.1%
    --- #3. Educational services, health care, and social assistance: $10.9 billion, 8.2%
    --- #4. Other services (except government and government enterprises): $9.6 billion, 7.1%
    --- #5. Information: $7.4 billion, 5.5%

    The country's smallest territory is also the only fully urbanized territory or state in the U.S. As such, industries there naturally constitute large percentages of Washington D.C.'s gross domestic product. As the national capital, the territory's largest industry is, naturally, government and government services.

  • #50. Delaware

    - HHI index: 1,580.9
    - Industries over 4% GDP: 6
    - Government and government enterprises: $7 billion, 9.7% of state GDP
    - Top private industries:
    --- #1. Finance and insurance: $22.7 billion, 31.6% of state GDP
    --- #2. Real estate and rental and leasing: $10.4 billion, 14.4%
    --- #3. Professional and business services: $8.2 billion, 11.4%
    --- #4. Educational services, health care, and social assistance: $5.8 billion, 8%
    --- #5. Manufacturing: $4.2 billion, 5.8%

    Delaware has become a hotspot for U.S. corporations because of its strong privacy laws, low reporting fees, and no corporate taxes for corporations incorporated in but not operating there. With virtually no mining in the state besides gravel, Delaware's only major non-commercial services industry is chemical and food processing.

  • #49. Indiana

    - HHI index: 1,253.6
    - Industries over 4% GDP: 7
    - Government and government enterprises: $32.8 billion, 9.3% of state GDP
    - Top private industries:
    --- #1. Manufacturing: $97 billion, 27.5% of state GDP
    --- #2. Real estate and rental and leasing: $33.9 billion, 9.6%
    --- #3. Educational services, health care, and social assistance: $33.7 billion, 9.6%
    --- #4. Professional and business services: $30.3 billion, 8.6%
    --- #5. Retail trade: $20.4 billion, 5.8%

    Indiana is a manufacturing powerhouse: As the largest steel producer in the U.S., the state accounts for a quarter of all the country's steel production. Indiana is #2 for auto manufacturing and also manufactures pharmaceuticals, transportation equipment, chemicals, rubber products, petroleum and coal derivatives, and factory machinery. A lack of commercial development and limited urbanization limit the industrial diversity of the state.

  • #48. Hawaii

    - HHI index: 1,188.3
    - Industries over 4% GDP: 7
    - Government and government enterprises: $17.6 billion, 19.9% of state GDP
    - Top private industries:
    --- #1. Real estate and rental and leasing: $17.9 billion, 20.3% of state GDP
    --- #2. Arts, entertainment, recreation, accommodation, and food services: $8.8 billion, 10%
    --- #3. Professional and business services: $7.7 billion, 8.8%
    --- #4. Educational services, health care, and social assistance: $6.8 billion, 7.7%
    --- #5. Retail trade: $5.8 billion, 6.6%

    Hawaii is the only U.S. state that does not share a road connection with another state. With a healthy agricultural base, Hawaii's major exports are foodstuffs including coffee, pineapples, bananas, and honey. As the host of major Army, Navy, and Air Force bases, government services constitute another large part of the state's income. Hawaii also has one of the largest service industries as a percentage of the GDP for any state.

  • #47. Wyoming

    - HHI index: 1,168.9
    - Industries over 4% GDP: 9
    - Government and government enterprises: $6.3 billion, 17.6% of state GDP
    - Top private industries:
    --- #1. Mining, quarrying, and oil and gas extraction: $7.6 billion, 21.2% of state GDP
    --- #2. Real estate and rental and leasing: $4.3 billion, 12.1%
    --- #3. Transportation and warehousing: $3.2 billion, 9%
    --- #4. Retail trade: $2.1 billion, 5.8%
    --- #5. Construction: $2 billion, 5.7%

    Wyoming is a sparsely populated state located on the rangelands of the Rocky Mountains. As such, mineral extraction and agriculture are the major industries in the state. While limited urbanization prevents the development of service industries in the state, the high percentage of federal government land ownership in the state and the existence of two national parks, two national monuments, and a wide array of national forests and wildlife refuges will keep Wyoming in a state of natural preservation for the foreseeable future.

  • #46. Maryland

    - HHI index: 1,160.2
    - Industries over 4% GDP: 9
    - Government and government enterprises: $80.8 billion, 20.2% of state GDP
    - Top private industries:
    --- #1. Real estate and rental and leasing: $70.1 billion, 17.5% of state GDP
    --- #2. Professional and business services: $55.6 billion, 13.9%
    --- #3. Educational services, health care, and social assistance: $36.2 billion, 9.1%
    --- #4. Manufacturing: $23.1 billion, 5.8%
    --- #5. Finance and insurance: $19.9 billion, 5%

    Maryland's proximity to beaches, polished suburbs, farm country, and the Washington and Baltimore metropolitan areas gives the state some of the most expensive land values in the nation with the highest median household income. Access to Washington D.C. also means Maryland hosts a large number of government facilities, such as the United States Naval Academy at Annapolis. Maryland is also a major manufacturing state, with a focus on biotechnology.

  • #45. Virginia

    - HHI index: 1,155.5
    - Industries over 4% GDP: 7
    - Government and government enterprises: $94.1 billion, 18.4% of state GDP
    - Top private industries:
    --- #1. Professional and business services: $96.9 billion, 19% of state GDP
    --- #2. Real estate and rental and leasing: $72.8 billion, 14.3%
    --- #3. Manufacturing: $43.7 billion, 8.6%
    --- #4. Educational services, health care, and social assistance: $37.8 billion, 7.4%
    --- #5. Finance and insurance: $26 billion, 5.1%

    Virginia is a tale of two states. Northern Virginia has land values and household wealth on par with Maryland, while Southeastern Virginia is more industrialized with heavy development in military infrastructure. With the Central Intelligence Agency and the U.S. Department of Defense headquartered in Virginia, the state has the highest per capita defense spending in the nation.

  • #44. New Mexico

    - HHI index: 1,127.7
    - Industries over 4% GDP: 7
    - Government and government enterprises: $22.4 billion, 23.7% of state GDP
    - Top private industries:
    --- #1. Real estate and rental and leasing: $12.7 billion, 13.5% of state GDP
    --- #2. Professional and business services: $10.2 billion, 10.8%
    --- #3. Educational services, health care, and social assistance: $8 billion, 8.5%
    --- #4. Mining, quarrying, and oil and gas extraction: $7.6 billion, 8.1%
    --- #5. Retail trade: $5.5 billion, 5.8%

    New Mexico relies on land availability for its industry, which includes mining extraction, oil drilling, cattle ranching, and lumber. The state also has a significant military presence with Los Alamos and the Sandia National Laboratories and the White Sands Missile Range. The state is also a major regional retail center, with a number of distribution hubs based there.

  • #43. Alaska

    - HHI index: 1,126.8
    - Industries over 4% GDP: 6
    - Government and government enterprises: $10.8 billion, 20.9% of state GDP
    - Top private industries:
    --- #1. Mining, quarrying, and oil and gas extraction: $7.9 billion, 15.3% of state GDP
    --- #2. Transportation and warehousing: $6.5 billion, 12.6%
    --- #3. Real estate and rental and leasing: $5.4 billion, 10.4%
    --- #4. Educational services, health care, and social assistance: $4.3 billion, 8.3%
    --- #5. Professional and business services: $3.3 billion, 6.4%

    Alaska is the largest state by area, with a geographic span big enough to stretch from Savannah, Ga., to Sacramento, Calif., and a combined area greater than Texas, California, and Montana combined. Despite this, it is the third-smallest state by population. As with most sparsely populated states, Alaska's industry largely relies on the land, with mineral extraction and transportation taking top positions. The state's oil and natural gas extraction sectors are so prolific that state residents receive an annual cash refund from the state's drilling operations.

  • #42. New York

    - HHI index: 1,085.2
    - Industries over 4% GDP: 9
    - Government and government enterprises: $160 billion, 10% of state GDP
    - Top private industries:
    --- #1. Finance and insurance: $306.9 billion, 19.1% of state GDP
    --- #2. Real estate and rental and leasing: $227.9 billion, 14.2%
    --- #3. Professional and business services: $208.6 billion, 13%
    --- #4. Educational services, health care, and social assistance: $148.5 billion, 9.2%
    --- #5. Information: $131.9 billion, 8.2%

    The fourth-largest state by population, New York's GDP is larger than all states except California and Texas. If New York State was an independent nation, it would be the 11th largest by gross production. The state has industrial footprints in every sector, from steel refining and auto manufacturing to wine-making to computer technologies. The Rust Belt state did suffer heavily from the industrial shrinkage that defined the late 20th century, with several of its Lake Ontario-regional cities such as Syracuse, Rochester, and Buffalo seeing negative or stalled growth. Also, as 40% of New York's population is located in New York City, the state places a high emphasis on the Big Apple's industrial output.

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