By the end of this decade, Governor Ned Lamont wants Connecticut to become the first state to deliver all government services digitally. Governor Kristi Noem anticipates that the advent of fifth-generation wireless technology will allow South Dakota to eliminate nagging gaps in internet service. And Governor Steve Sisolak intends for Nevada to develop into a model center for secure data storage, known as blockchain.

Around the country, state leaders are pursuing innovation because of its potential to reshape their economies. Even before state revenues were hit by the fallout from the coronavirus pandemic, most state economies were growing at a slower rate than before the past decade. Going forward, state revenue is likely to be restrained while service demands increase. The federal government, mired in trillion-dollar deficits and stymied by partisanship, is limited in how much it can help, notably in building infrastructure and combating the effects of climate change. That leaves it up to states to fill the void.

“Coming out of the Great Recession, it was hard for most states both to recover revenues and to catch up on the latest innovations,” says Michael Thompson, a Pew vice president who heads the government performance group. “Now, states are likely to encounter the same challenges until the fallout from the coronavirus settles. On the other hand, ignoring the advances in tech and data will only set states back further.”

The cast that will confront these changes will be unlike the one in 2010. Eight governors and 5,000 legislative seats are up for election this fall in voting that also will determine which party draws the legislative district maps next year. The Nov. 3 federal election also could have a bearing on how state lawmakers set policies on pressing national issues, and how they interact with Washington.

As in the past, The Pew Charitable Trusts will attempt in the 2020s to play a role supporting innovators. A decade ago, as the Pew Center on the States was taking off, Pew began helping states set policy on issues such as public-sector pension funding, corrections costs, and effective budget management. That work will continue as the organization embraces new challenges facing tomorrow’s generation, from improving access to the civil justice system to new protections for flood-prone areas.

For their part, state officials are asserting their influence over innovation policy with a sense of urgency. Gov. Phil Murphy entered office in 2018 with an ambitious plan to foster what he called a culture of innovation in New Jersey government, including a 10-course training program for state workers. Maine Gov. Janet Mills, saying that innovation drives growth, has established a “department of the future” to help carry out the state’s first economic development makeover in more than 20 years. Hawaii Gov. David Ige has dubbed his plan for embracing technology and innovation a “trajectory change,” aimed in part at generating all of the state’s electricity from clean, renewable sources in 25 years.

State leaders say they’re aggressively pushing new ideas because, as Ige says, “It seems that each year, change happens faster and faster.” When the 2010s began, Michigan lawmakers gave General Motors tax breaks so that the automaker would build an electric vehicle called the Volt at a Detroit plant. This year, also with state tax incentives, that same plant began producing an electric self-driving shuttle and a battery-powered, zero-emissions Hummer. The trend to driverless vehicles may reshape state economies and government revenues as fewer cars and parts will be manufactured, sold, and driven, reducing transportation-related jobs, motor fuel and vehicle tax collections, and income from driver fees as the autonomous vehicles change how many government services are delivered in everything from public safety to transporting schoolchildren.

Data will have the same impact on innovation.

Up to now, state officials have used data and evidence to evaluate performance outcomes, often tying funding to programs proven to work. Beginning in 2010, Results First, a project founded by Pew and The John D. and Catherine T. MacArthur Foundation, was instrumental in getting state and local governments to think differently about using data to inform their policy and funding decisions.

As this decade begins, the explosion of data is striking, and state officials are only beginning to grasp its power to inform their decision-making. The data is found in the routine administrative records that state agencies collect every day, from birth and death records to Medicaid participation to use of social services to vehicle registrations; add to that the ubiquitous personal data from smart devices, social media posts, web pages, crowdsourcing, GPS, and cloud computing, among other technologies.

As a result, almost overnight the ability of state officials to identify and analyze datasets has become a necessity in government. “Data is fast emerging as an asset as valuable if not more valuable than cash,” says Beth Blauer, executive director at the Johns Hopkins University Centers for Civic Impact. “In the next 10 years, government will begin to redefine public service and assign more and more value to people who have basic data use skills.”

Data analysis could reveal trends, patterns, and connections in state services that would improve air and water quality, disaster response, public safety, traffic management, tax collection, and child care—and help fight the spread of disease. Data from multiple Texas agencies assisted authorities in determining which areas of Houston needed the fastest response during Hurricane Harvey in 2017. Data from jails and emergency rooms are behind a current effort in Connecticut to find permanent housing for people languishing in a cycle of jail, detox, emergency rooms, and homelessness.

The surge in data also could help state and local governments detect cyberattacks at a time when these threats are increasing. Last year, hackers with ransomware attacked governments in Louisiana and Texas, among other places. New Jersey has implemented a statewide monitoring system in which sensors detect network threats in all 21 counties and alert authorities of malicious activity. Officials say more innovative ideas will be needed.  “We are on the front lines of a new battle, every day, in every state,” says Governor Doug Burgum of North Dakota. “We are under attack by hackers trying to access our infrastructure systems.”

Other pressing state problems—some old, some new—also are benefiting from novel thinking. The recent wildfires in the West, the rash of hurricanes, chronic flooding, and other violent natural disasters are putting an emphasis not only on costs, response, and mitigation, but also on how states take action on climate change. In a first, California Gov. Gavin Newsom is asking California voters to approve a $4.8 billion “climate resilience bond” in November to address risks from natural disasters, drought, sea level rise, and higher temperatures. Massachusetts started a Municipal Vulnerability Program, in which state officials award grants to local communities that assess their climate weaknesses and develop response plans.

The rising interest in innovation policy coincides with daunting challenges for America’s youngest and oldest citizens. Vaping is addicting another generation, as smoking cigarettes did in previous generations. Youth suicide rates are rising at alarming rates, putting a focus on access to mental health care; Iowa, in response, has created a separate mental health system for children, and Ohio is pouring $675 million into K-12 mental health counseling and other wellness services. At the other end of the life span spectrum, state officials are preparing for an increasingly older population.  By 2030, Californians over 60 will outnumber children under 18 for the first time. Gov. Newsom has called for a “master plan on aging” that addresses the growing demand for in-home care and transportation at a time of a nursing shortage.

Nurses are not the only workers needed in the innovation economy: States are undergoing a transformation of the workforce that requires higher levels of skills and postsecondary education in cybersecurity, sustainable agriculture, renewable energy, and bioscience. So, officials are thinking differently about how to train adults and teenagers. Alabama has created a School of Cyber Technology and Engineering for high school students. Vermont has enlisted Microsoft to help expand the state’s digital skills training. Indiana is using a grant from Google to offer coding training to people who are incarcerated to prepare them for jobs when they
are released.

One potential roadblock to implementing change is that the push for states to innovate comes at a time when angry differences between the political parties have seeped into many statehouses. These rifts could hamper progress on problem-solving, political leaders warn. “Let’s not allow anything dividing our nation to divide our state,” Republican Gov. Gary Herbert of Utah said in his 11th and final State of the State address in January. The goal is to put governance first by using data that promotes bipartisan, meaningful policy debates that lead to solutions.