By Jennifer Leigh Parker, Special to CNBC.com

NEW YORK (CNBC) -- California is the undefeated winner but others are not far behind in the Technology and Innovation category of CNBC's Top States For Business 2011.

California reigns with three of the "Gang of Four" -- Google Chairman Eric Schmidt's phrase for the fastest growing tech companies Google ( GOOG), Apple ( AAPL) and Facebook headquartered in its boundaries. (Amazon.com is based in Seattle, Washington).

Earning 219 out of a total 225 points, California surpassed even its own 2010 performance due in large part, to the number of patents issued to its residents. At 27,337, California residents received more patents than the next four runners-up combined.
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And yet New York, which held on to the second spot with 212 points, followed by Massachusetts, Texas, and Washington are hot on the heels of Silicon Valley.

There are several tools with which to challenge Golden State supremacy. This study's criteria evaluates states not only on patents issued, but also broadband penetration, federal health and scientific grants. So, to compete, you've got to have the infrastructure for innovation -- and deliver the goods.

While the top-five states were unchanged from 2010, rankings 6 to 10 saw a few surprise movers. Illinois gained 8 spots (14/6) from last year, bumping Pennsylvania down to 7th place. What happened?

As it turns out, Illinois' improvement is the result of the amount of scientific grant money awarded to the state -- $185 million to be exact -- from the National Science Foundation to the University of Illinois at Urbana/Champaign.

While many know the state for politics and sports, Illinois' Technology and Research Corridor is a major scientific hub in northeastern Illinois, linking intellectual capital and corporate innovation.

Big name companies such as Motorola Solutions ( MSI) and Mobility ( MMI), Boeing ( BA) and Telephone and Data Systems ( TDS) among others are headquartered in Illinois in large part to benefit from the concentration of technical expertise.

Which begs the question: Is there a correlation between education and technology rankings?

In this year's study, four states made the top ten for both -- New York, New Jersey, Massachusetts and Maryland. While there are many other factors at play, our evidence suggests that states supporting robust scientific research on campuses ultimately foster tech-sector growth.

Bruce Mueller, Director of Emerging Technologies, Motorola Solutions , says, "Graduates of Illinois' university programs become some of our strongest staff, guiding key engineering and business teams. Furthermore, the flock of entrepreneurial companies that surround research institutions create partners."

Rounding out tech's top ten are Michigan and New Jersey, which tied for 8th place with a 179 point score, and Maryland in 10th place with 176 points.

On the other side of the spectrum, tech duds may still be running Windows '95.

West Virginia (47), North Dakota (48), South Dakota (49), haven't moved from the bottom four spots they held last year. Indeed, stuck in a repeat performance -- the Cowboy State Wyoming scored stone last with only 11 points out of 225 for Tech & Innovation.

-- Written by Jennifer Leigh Parker of CNBC

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