CNBC & CNBC.com Present Coverage with Senior Correspondent Scott Cohn Revealing the 2014 America's Top 5 States for Business Throughout CNBC's Business Day Programming and Online on Tuesday, June 24th
ENGLEWOOD CLIFFS, N.J., June 3, 2014— It's all about jobs. Across America, especially the 36 states electing governors this year, politicians, policymakers and the public are debating how best to attract business. Which states are getting it right? With the competition for jobs growing more intense every day, what does it take to be this year's Top State for Business?
Starting Monday, June 23rd through Wednesday, June 25th, CNBC, First in Business Worldwide, will broadcast the results of its eighth annual study of America's Top States for Business. The network will build a special event around this CNBC exclusive study with the complete rankings being revealed, along with the winning state, on Tuesday, June 24th, throughout the network's Business Day programming. The complete ranking for all 50 states will be available on CNBC.com and include an in-depth look at each of their respective rankings.
CNBC Senior Correspondent Scott Cohn will broadcast live from the top-ranked state starting Monday, and will count down CNBC's 2014 list of America's Top States for Business Tuesday, beginning on "Squawk Box" (6AM-9AM ET) with the top state being revealed on "Closing Bell" (3PM-5PM ET).
On Tuesday, June 24th, CNBC.com will reveal, in conjunction with on-air, the complete list of America's Top States for Business rankings. In addition, topstates.cnbc.com will feature a wealth of coverage about each state including economic snapshots (employment, budget, tax and housing data) and exclusive stories and slideshows delving into the various top-ranking categories including Technology & Innovation, Quality of Life and Most Improved States.
Follow us on Twitter @CNBC and take part in the social conversation using hashtag #TopStates.
To determine the rankings for America's Top States for Business, each state was scored—using publicly available data—on 56 different measures of competitiveness. We developed our methodology with input from business groups including The National Association of Manufacturers and The Council on Competitiveness, and continually monitor the competitive landscape with the help of business leaders, policy analysts, the CNBC Global CFO Council and the states themselves. States received points based on their rankings in each metric, which were then separated into ten broad categories. The categories are weighted based on how frequently they are cited as selling points in state economic development marketing materials. That way, we grade the states on the criteria they use to sell themselves.
So what makes a state great for business? The ten broad categories and the maximum possible points for each:
- Cost of Doing Business (450 Points) – Cost is a major consideration when a company chooses a state. We look at the state and local tax burden in each state, including individual income and property taxes, as well as business taxes and gasoline taxes. Utility costs can add up to a huge expense for business, and they vary widely by state. We also consider the cost of wages, as well as rental costs for office, commercial and industrial space (rental cost information furnished by CoStar Group).
- Economy (375 Points) – A solid economy is good for business. So is a diverse economy, with access to the biggest players in a variety of industries. We look at economic growth, job creation and the health of the residential real estate market. We measure each state's fiscal health by looking at its credit ratings and outlook, as well as state revenues as compared to budget projections. We also give credit to states based on the number of major corporations headquartered there.
- Infrastructure & Transportation (350 Points) – Access to transportation in all its modes is a key to getting your products to market and your people on the move. We measure the vitality of each state's transportation system by the value of goods shipped by air, waterways, roads and rail. We look at the availability of air travel in each state, the quality of the roads and bridges, the time it takes to commute to work, and the supply of safe drinking water.
- Workforce (300 Points) – Many states point with great pride to the quality and availability of their workers, as well as government-sponsored programs to train them. We rate states based on the education level of their workforce, as well as the numbers of available workers. We also consider union membership and the states' right-to-work laws. While organized labor contends that a union workforce is a quality workforce, that argument, more often than not, does not resonate with business. We also look at the relative success of each state's worker training programs in placing their participants in jobs.
- Quality of Life (300 Points) – The best places to do business are also the best places to live. We score the states on several factors, including the crime rate and health care including the percent of the population with health insurance. We evaluate local attractions, parks and recreation, as well as environmental quality.
- Technology & Innovation (300 Points) – Succeeding in the new economy—or any economy—takes innovation. The top states for business prize innovation, nurture new ideas, and have the infrastructure to support them. We evaluate the states on their support for innovation, the number of patents issued to their residents, and the record of high tech business formation. We also consider federal health, science and agricultural research grants to the states.
- Business Friendliness (200 Points) – Regulation and litigation are the bane of business. Sure, some of each is inevitable. But we grade the states on the freedom their regulatory frameworks provide, as well as the perceived friendliness of their legal and tort liability systems.
- Education (150 Points) – Education and business go hand in hand. Not only do companies want to draw from an educated pool of workers, they also want to offer their employees a great place to raise a family. Higher education institutions offer companies a source to recruit new talent, as well as a partner in research and development. We look at traditional measures of K-12 education including test scores, class size and spending. We also consider the number of higher education institutions in each state and long term trends for funding higher education.
- Cost of Living (50 Points) – The cost of living helps drive the cost of doing business. From housing to food and energy, wages go further when the cost of living is low.
- Access to Capital (25 Points) – Companies go where the money is, and capital flows to some states more than others. We look at venture capital investments by state, as well as small business lending on a relative basis.
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