Creating a narrative to explain the importance and impact of Economic Dynamism

In collaboration with the Economic Innovation Group, we clarified the nature and impact of economic dynamism in the United States. The result is an interactive that presents its history and how it has behaved state by state.

We aimed to create an experience that is both easy to read and understand. To achieve this, we built a tool that guides and engages the reader with playful animations throughout the narrative.

This project was shortlisted for the Information is Beautiful Awards 2023.

We even had the opportunity to give a talk inspired by it!

Phone Mockup showcasing State Dynamism Project

Giving context

The interactive starts with a narrative section presenting the concept of economic dynamism and the client’s analysis of the topic. 

Voilà: worked in depth with the client to develop a well-paced story that would allow someone with little knowledge of the topic to quickly understand its importance and evolution. 

We paid special attention to the animations connecting the different elements in this section for a cohesive reading experience.

Moving the lines

We put our own twist on hex maps, packing a ton of information into a familiar yet unique visual. 

We used animation to help readers get comfortable with this chart. This flow from chart to chart, from idea to idea, makes complex charts more understandable.

With just one look at the map, we can see the overall status of the country. Our eyes are drawn to the outliers and we see regional trends. A closer look reveals the story of each state over nearly 30 years. 

In total 1,400 data points are shown seamlessly.

Allowing Exploration

After getting familiar with the topic, the audience can dive deeper by selecting a U.S. state to study in detail in a dashboard. They are able to find their own state, as a personalized way to engage with the topic.

The dashboard showcases the different components of dynamism, giving policy makers a tool to identify the contribution of each component to their overall performance. 

This project connects data to real-life experiences and helps make a case for policymakers to quickly implement measures that will boost dynamism.

Explore the interactive now and see how economic dynamism impacts your state.

 

The concept of dynamism captures the intrinsic vitality of an economy: how quickly it changes, how efficiently it redeploys its resources to the most productive use, and how successfully it translates experimentation into opportunity. In The Case for Economic Dynamism, EIG chronicled the troubling decline in dynamism in recent decades and made the case that rekindling it should be a central organizing principle for American economic policy. Here, we extend those insights to states, measuring and ranking their performance across multiple different measures of economic dynamism over time. States matter because they hold so many policy levers that influence the course of dynamism, from labor market regulations to permitting processes, R&D funding, and economic development policy.

This story utilizes scroll-driven animations. Use this toggle to disable this and to view a static version.

Animations are

Dynamism lies at the heart of a well-functioning economy, but it has been in retreat for decades.

Change in average score on the Index of State Dynamism since 1992

Average
1992
2021
Higher
Lower dynamism
Economic dynamism has fallen by more than 24 percent in the average state since the early 1990s.
The downsides of declining dynamism are not always immediate or obvious — the U.S. economy has made notable gains over this period and many states have thrived. But a less dynamic economy tends to be less resilient to shocks, less innovative, less productive, and poorer in opportunity over the long-term.
We calculate the Index of State Dynamism (ISD) for each state by combining eight measures — each capturing a distinct element of economic dynamism — into a single summary score.
Across states, falling dynamism scores largely stem from a sustained drop in new business activity and associated impacts on the labor market.
Five of eight ISD indicators follow steady downward trajectories: core startup rates, jobs in young firms, labor force participation rates, migration rates, and reallocation rates.
Of the other indicators, changes in the number of firms and housing permits are trending downwards over the long-term but still tend to be somewhat responsive to the business cycle.
Only one indicator, inventors, solidly bucks the trend with an upward trajectory over time.
The ISD is calculated annually and captures a dramatic period of economic evolution in the United States, from the dot-com crash of the 1990s through the housing bubble of the 2000s to the Great Recession and its aftermath.
A major drop in the index came with the dual housing and financial crises of the Great Recession, which resulted in a dramatic, persistent, and pervasive reduction in economic dynamism — a key factor in the slow and uneven recovery that followed.
Visualizing the decline through a color gradient paints the sharp divergence in higher dynamism scores before the Great Recession and lower dynamism scores after in a different light.
Dynamism has declined in virtually every state over the past three decades, falling precipitously during the 2007-09 economic crisis and struggling to recover since.
Even so, it’s clear that states in the West and parts of the South have maintained their relative advantage as the most dynamic state economies since the 1990s.
Many states in the country’s traditional industrial heartland across the Midwest and Northeast, however, have seen their economic status erode over this time.
The Index of State Dynamism provides a unique assessment of the underlying health of the economy. Its decline in virtually every state over the past three decades should be a wake-up call.

Explore state-level variation in how dynamism and its components have evolved over time in the interactive below.

For more in-depth analysis of the latest scores and geographic trends, visit our articles here. Information on data sources and the methodology for calculating the ISD can be found here.

State Dynamism Dashboard

Explore the data to see how each state's summary score and component metrics perform over time

Select a state

Alabama’s Index of State Dynamism (ISD) score is 26.8, which ranks 40th overall, a change of +8 places from five years ago.

Relative to average, Alabama performs best on growth in total firms, while it performs worst on inventors per capita.

Dynamism score (ISD) in Alabama vs. average

2021 ISD score

Other states
Alabama

Alabama's nationwide ranking by ISD

2021 ISD rank

1st
Last
Alabama
40th place

Component metrics in the state of Alabama

Core startup rate
Share of workers at young firms
Growth in total firms
Inventors per 1,000 residents
Housing permits per 1,000 residents
Worker churn
Labor force participation rate
Migration rate

Latest component metric rankings

AL Alabama
Click on any bar to change the selected state.
Sort order:
Overall rank
Core startup rate
Share of workers at young firms
Growth in total firms
Inventors per 1,000 residents
Housing permits per 1,000 residents
Worker churn
Labor force participation rate
Migration rate
Download the data and read the methodology
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