Every state deals with shifts in the competitive landscape in its own way, but few states are buffeted by the winds of change the way Massachusetts is. The Bay State climbs to 16th place overall for 2013, up from 28th place last year. But that 12-place jump only begins to tell the story of Massachusetts' roller coaster ride through our rankings.
In 2007, the first year of our study, Mitt Romney had just wrapped up his one term as governor, and his landmark health care reform had begun taking effect. The state finished 12th overall, with strong showings in our categories Education, Access to Capital and Quality of Life—which includes health care. Under Gov. Deval Patrick, the state dropped to 15th in 2008, climbed to eighth in 2009, then made it to fifth—its only appearance in our Top Five—in 2010. The state slipped to sixth in 2011, before plunging to 28th in 2012. So while a 16th-place finish this year is respectable, Massachusetts has some work to do to reclaim its past glory.
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Massachusetts owes most of its improvement to a jump in the Economy category, which improved to third place from 21st last year thanks to solid growth and an improving housing market. State finances are stable and Massachusetts offers a diverse industrial base. Massachusetts also saw significant improvements in Infrastructure, Workforce and Business Friendliness.
But Massachusetts lags badly in Cost of Doing Business, where it comes in 47th. And its acclaimed Education system slips to seventh place from third in 2012.
Delaware improves to 31st place from 43rd last year. The First State has a well-earned reputation as a welcoming place for business thanks to its Court of Chancery, which insulates businesses from the whims of juries. Roughly half of all publicly traded companies are incorporated in Delaware, according to the state's Division of Corporations.