CNBC: America's Top States For Business 2008—Categories & Criteria

We scored all 50 states—using publicly available data—on 40 different measures of competitiveness, repeating the successful formula introduced in 2007. States received points based on their rankings in each metric. Then, we separated those metrics into the ten broad categories, with input from business groups including the National Association of Manufacturers. We weighted the categories based on how frequently each is cited in state economic development marketing materials.

Here are the ten categories and criteria for the 2008 study, which will be released at the close of business Wednesday, July 9 on "Closing Bell." (Vote for your state.)

Cost of Doing Business (450 Points)

Cost is a major consideration when a company chooses a state. We looked at the tax burden, including individual income and property taxes, business taxes, even the gasoline tax. Utility costs can add up to a huge expense for business, and they vary widely by state. We also looked at the cost of wages and state workers’ compensation insurance, as well as rental costs for office and industrial space.

Workforce (350 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 rated states based on the education level of their workforce, as well as the numbers of available workers. We also considered union membership. While organized labor contends that a union workforce is a quality workforce, that argument, more often than not, doesn’t resonate with business. We also looked at the relative success of each state’s worker training programs in placing their participants in jobs.

Economy (314 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 looked at basic indicators of economic health and growth. We also gave credit to states based on the number of major corporations located there.

Education (250 Points)

Education and business go hand in hand. Not only do companies want to draw from an educated pool of workers, they 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 looked at traditional measures of K-12 education including test scores, class size and spending. We also considered the number of higher education institutions in each state.

Quality of Life (250 Points)

The best places to do business are also the best places to live. We scored the states on several factors, including local attractions, the crime rate, and health care.

Technology & Innovation (150 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 evaluated the states on their support for innovation, the number of patents issued to their residents, and the deployment of broadband services.

Transportation (107 Points)

Access to transportation in all its modes is key to getting your products to market and your people on the move. We measured the vitality of each state’s transportation system by the value of goods shipped by air, land and water. We looked at the availability of air travel in each state, and the quality of the roads.

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.

Business Friendliness (50 Points)

Regulation and litigation are the bane of business. Sure, some of each is inevitable. But we graded the states on the perceived “friendliness” of their legal and regulatory frameworks to business.

Access to Capital (50 Points)

Companies go where the money is, and venture capital—an increasingly important source of funding—flows to some states more than others.

© 2012 CNBC.com