Crypto-friendly policies and startup incentives are helping reshape the U.S. innovation landscape, according to the latest Draper Innovation Index (DII).
The index ranks states based on their ability to attract entrepreneurs, investment, and emerging technologies.
The top performers and laggards
The March 2026 update shows that states embracing digital assets and emerging technologies are gaining ground. Meanwhile, some traditional technology hubs are losing momentum.
Texas climbed to fourth place in the DII US ranking, overtaking Wyoming, thanks in part to growth in overall venture capital investment, cryptocurrency and blockchain-related funding, and new business creation. Oklahoma also posted one of the biggest gains, rising to 15th place after strong growth in startup formation and crypto-related venture investment.
Meanwhile, California dropped to 31st place and New York fell to 49th. According to the index, both states were hurt by weaker new business formation despite their large economies and established innovation ecosystems.
New Hampshire ranked third, despite being 40th in GDP and 42nd in population size, highlighting the index’s argument that business-friendly policies can outweigh economic size. The state’s tax environment and startup-friendly policies have helped it attract entrepreneurs, according to BizWorld.
Draper argued that innovation moves toward places with fewer barriers for founders.
“When taxes get punishing, when regulations pile up, when policy stops rewarding risk… founders leave,” he said.
The index also shows Canada falling from third to fifth place and other regions seeing declines linked to instability and capital flight.
Cryptocurrency, blockchain adoption, and policies supporting business formation are becoming increasingly important factors in determining where the next generation of startups will emerge, according to Draper.
