California may have an economy that’s among the top ten in the world, but when it comes to CNBC’s Top States For Business 2008 survey, the state is clearly average, ranking 25, just a step ahead of New York.
It’s one of several seemingly surprising findings in the 2008 data.
Another is Delaware. Though many a major company has chosen to incorporate there, the state is a lowly 41 in our rankings.
On closer inspection, however, figuring out why states fared poorly in America’s Top States For Business 2008 takes a bit less work than determining why others did well.( Texas, the winner, scored well in most categories, especially the ones with the most points.)
Itusually comes down to performance and scoring in three key categories, and they happen to be the three with the most impact on the weighting and the overall rankings: Cost of Doing Business, Workforce and Economy.
California, where is considered a highly regulated state, ranked 48 out of 50 in Cost of Doing Business. It also ranked at the bottom in Business Friendliness (48) and Cost of Living (49).
That more than offset high scores in Access To Capital (1), Quality of Life (4) and Economy (7).
A low ranking in Cost Of Doing Business (33) also hurt Delaware, as did bottom-ten showings in Transportation (47) and Access To Capital (41). Being No. 1 in Business Friendliness can hardly offset those negatives.
The 10 Worst States
The pattern is even more apparent in the bottom ten, what we’ll call the worst states for doing business.
Look at Hawaii (49) and Alaska (50), which repeated their 2007 survey showings.