Attracting business—and jobs—is a high priority in every state. But in an anemic economy where jobs are in short supply, attracting business today is a matter of economic survival. So which states have what it takes to survive?
Our fourth annual study of "America's Top States for Busines"s puts all 50 states to the test, measuring them on 40 different metrics in ten key categories of competitiveness. We developed these categories back in 2007 with the help of business groups including the National Association of Manufacturers and fine-tune them as necessary each year.
We weight the categories based on how frequently states use them as selling points to attract business. That way, we hold the states to their own standards, and tell you how they measure up.
This year’s categories and weightings, for a total of about 2,500 points, are:
- Cost of Doing Business (450 points)
- Workforce (350 points)
- Quality of Life (350 points)
- Economy(314 points)
- Transportation & Infrastructure (300 points)
- Technology & Innovation (250 points)
- Education(175 points)
- Business Friendliness(175 points)
- Access to Capital (50 points)
- Cost of Living (25 points)
We use publicly available data on the metrics in each category to score the states, and then add up those scores to rank America’s Top States for Business.
This year's cream of the crop of Top States—the top five—includes some surprise, as usual.
What separates the top states from the rest?
The most competitive states are consistent, turning in solid—not necessarily spectacular—scores in multiple categories. And while every state has its weaknesses, the top states manage to keep theirs to a minimum—one or two categories at most.
Regional differences among the states play much less of a role than one might think. While Sun Belt states have tended to do better over time, this year’s Top States may be the most regionally diverse group yet. Nearly every region in the country is represented in the top ten and all but a couple have a place in the top five.
There’s no clear-cut political trend either; three of our top five states have Democratic governors, while two are under Republican control.
Each of those governors is grappling with a budget shortfall, and most face—at best—a stagnant job picture. That is the nature of the economy these days. It may be fun presiding over a Top State for Business, but no one ever said it was easy.
Our study is not primarily a measure of the states’ economic health, but changes in the economy do tend to change the rankings from year to year. This year for example, a rebound in the banking sector appears to have influenced the final scores.
Speaking of influence, our annual rankings have become so popular and so widely quoted that some state officials and their staffs have taken to calling us ahead of time and pumping us for information in hopes of gaining an edge in the rankings. If you work in state government and didn’t call us, and you are now slapping your forehead saying, “Why didn’t I think of that?” Fear not. It doesn’t work. The numbers don’t lie, and they tell quite a story—a survival story pitting state against state, to see who comes out on top.
How does it turn out? Join us today, beginning around 8:00 a.m. ET on "Squawk Box" as we count down America’s Top States for Business on TV and the Web, culminating with the announcement of the winner on "Closing Bell"at 4:30 p.m. ET.
In the meantime, tell us whether your state is doing enough and take our quiz to see how much you know about the top states for business.
- Complete Rankings: 2009 2008 2007