The latest ranking says crypto-friendly policies and startup incentives are helping states such as Texas and Oklahoma gain ground, while California and New York lost momentum on weaker business formation.
Texas moved up to fourth place in the March 2026 Draper Innovation Index, overtaking Wyoming as growth in venture capital investment, cryptocurrency and blockchain-related funding, and new business creation lifted its standing. Oklahoma posted one of the biggest gains, rising to 15th after strong startup formation and crypto-related venture investment. The index argues that states backing digital assets and emerging technologies are improving their ability to attract entrepreneurs, capital, and new companies, while some traditional technology hubs are slipping. California fell to 31st place and New York to 49th, with the ranking citing weaker new business formation despite their large economies and established innovation ecosystems. New Hampshire ranked third even though it was 40th in GDP and 42nd in population size, a result the index says shows business-friendly policies can outweigh economic scale. Draper said innovation tends to move to places with fewer barriers for founders, adding, “When taxes get punishing, when regulations pile up, when policy stops rewarding risk… founders leave.” The report also showed Canada dropping from third to fifth place, alongside declines in other regions tied to instability and capital flight. Draper said cryptocurrency, blockchain adoption, and policies that support business formation are becoming more important in determining where the next generation of startups will emerge.