Pennsylvania remains stuck in the middle of the pack among states when it comes to fostering growth in high-technology businesses and industries, a state report released yesterday said.

The state Department of Community and Economic Development measured Pennsylvania's progress in forming and growing tech-based companies by looking at such indicators as research patents, venture capital investments, and research and development expenditures.

While the first annual "TechFormation" report drew no conclusions, it evaluated the state's efforts to shift from its heavy industry past to a more innovative future by sizing it up against benchmark states with more advanced tech economies -- New York, New Jersey, Ohio, Maryland, Massachusetts and Michigan.

The goal of the report, according to state Deputy Secretary for Technology Investment Richard Overmoyer, is to both point out Pennsylvania's strengths and identify areas that still need work to accelerate high-tech growth. Areas for improvement include issuing research patents to speed development of technology for commercial use and boosting venture capital invested in Pennsylvania companies, the report said.

The good news: Pennsylvania ranked above average -- eighth in the nation -- in R&D expenditures, accounting for 4.1 percent, or $11.2 billion, of all U.S. R&D dollars spent in 2001, the report said, citing National Science Foundation figures. Economists and economic development experts say R&D funding trends are closely linked to the number of start-up companies a region produces.

But the state was fair to mediocre in other indicators of high-tech health, faring about average in such measures as private and public money spent to launch and develop new companies. While Pennsylvania ranked seventh in the amount of venture capital invested, with $538.4 million invested in state-based companies in 2003, the total accounted for only 3 percent of all venture capital invested nationwide that year.

And Pennsylvania dipped below the national average in the measure of manufacturing productivity -- output per employee. Its manufacturing output per worker of $114,464 trailed all six of the benchmark states except for New York.

"We're definitely making progress, but we're also not where we need to be," said local economic development expert Don Smith, vice president of the MPC Corp., a joint economic development venture between the University of Pittsburgh and Carnegie Mellon University. "It just takes time to make the transition from a heavy industrial economy to one that is entrepreneurial and innovation-driven."