CNBC & CNBC Digital Present Coverage with Special Correspondent Scott Cohn Revealing the 2016 America's Top 5 States for Business Throughout CNBC's Business Day Programming and Online on Tuesday, July 12th
Special Reports on the Changing Competitive Landscape over the Past Decade in Celebration of the Study's 10th Year on Wednesday, July 13th
ENGLEWOOD CLIFFS, N.J., June 28, 2016— America's most authoritative study of state business climates – the CNBC America's Top States for Business – is back for a tenth consecutive year. CNBC began scoring all 50 states for competitiveness in 2007 at the height of the housing bubble. America's Top States for Business reports continued through boom and bust and beyond. This year's tenth annual study – in the midst of a heated campaign not just for president but also in a dozen gubernatorial races – could be the most important of all.
Starting Monday, July 11th through Wednesday, July 13th, CNBC, First in Business Worldwide, will broadcast the results of its tenth 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, July 12th, 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 Monday, and will count down CNBC's 2016 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).
CNBC Digital will reveal, in conjunction with on-air, the complete list of America's Top States for Business rankings on Tuesday, July 12th. 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.
On Wednesday, July 13th, in celebration of the study's tenth year, CNBC will also have special reports on the changing competitive landscape over the past decade. In addition to revealing America's Top States for Business for 2016, the network will also reveal which states have performed best over the course of the CNBC exclusive study. It takes a special state to be Top State in any given year, but only a select few can do it year after year after year.
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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. A full list of sources that were used for this year's data can be found here. 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, and the time it takes to commute to work. We also consider the condition of each state's drinking water and wastewater systems.
- 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 its overall budget picture. Because of their own economic impact as well as the ripple effect, we consider the number of major corporations headquartered in each state.
- 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 including anti-discrimination 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 consider the number of higher education institutions in each state as well as long-term funding trends for higher education. We look at several measures of K-12 education including test scores, class size and spending. We also look digital and life-long learning opportunities in each state.
- 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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