CNBC & CNBC Digital Present Coverage with Special Correspondent Scott Cohn Revealing the 2015 America's Top 5 States for Business Throughout CNBC's Business Day Programming and Online on Wednesday, June 24th
ENGLEWOOD CLIFFS, N.J., June 4, 2015— The battle is intense, and the stakes are high. All 50 states are competing like never before to attract business and jobs. But what does it take to be one of America's Top States for Business?
Starting Tuesday, June 23rd through Thursday, June 25th, CNBC, First in Business Worldwide, will broadcast the results of its ninth 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 Wednesday, 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 Special Correspondent Scott Cohn will broadcast live from the top-ranked state starting Tuesday, and will count down CNBC's 2015 list of America's Top States for Business Wednesday, beginning on "Squawk Box" (6AM-9AM ET) with the top state being revealed on "Closing Bell" (3PM-5PM ET).
On Wednesday, June 24th, CNBC Digital 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 Workforce.
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 more than 60 different measures of competitiveness. We developed our methodology with input from a broad and diverse array of business and policy experts, official government sources, 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 it is used as a selling point 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:
- Workforce (400 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, the numbers of available employees and the states' demonstrated abilities to retain college-educated workers. We measure workforce productivity based on each state's economic output per job. We look at the relative success of each state's worker training programs in placing their participants in jobs. 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.
- Cost of Doing Business (350 Points) – Cost is a major consideration when a company chooses where to do business. We look at the competitiveness of each state's tax climate, as well as state-sponsored incentives that can lower the cost of doing business. 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 and industrial space (rental-cost information furnished by CoStar Group).
- Infrastructure (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.
- Economy (340 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, consumer spending 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 award points to states based on the number of major corporations headquartered there.
- Quality of Life (325 Points) – The best places to do business are also the best places to live. We score the states on livability, including several factors, such as the crime rate, inclusiveness such as antidiscrimination protections, the quality of health care, the level of health insurance coverage and the overall health of the population. We evaluate local attractions, parks and recreation, as well as environmental quality.
- Technology & Innovation (250 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.
- Education (200 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 look at digital and lifelong learning opportunities in each state. And we consider the number of higher-education institutions in each state, as well as long-term trends for funding higher education.
- Business Friendliness (160 Points) – Regulation and litigation are the bane of business. Sure, some of each is inevitable. But we grade the states on the freedom their legal and regulatory frameworks provide for business.
- Cost of Living (75 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 (50 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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