In ranking the states for CNBC's fourth edition of "America's Top States For Business," we scored all 50 on some 40 measures of competitiveness, almost exactly as we did in 2009.
States received points based on their rankings in each metric. Then, we separated those metrics into ten broad categories, weighting the categories based on how frequently they are cited in state economic-development marketing materials. That way, our study ranks the states based on the criteria they use to sell themselves.
Cost of Doing Business(450 Points)
Cost is a major consideration when a company chooses a location. We looked at the tax burden, including those on individuals, property, business taxes and even gasoline. 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 workers’ compensation insurance, as well as rental costs for office and industrial space (rental cost information furnished byThe CoStar Group.)
Workforce (350 Points)
Many states point with great pride to the quality and availability of workers, as well as government-sponsored programs to train them. We rated states based on the education level of the workforce, as well as the number 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 participants in jobs.
Quality of Life (350 Points)
The best places to do business are also the best places to live. We scored the states on several factors, including local attractions, crime rate, health care, air and water quality, as well as overall perceived livability.
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.
Transportation & Infrastructure (300 Points)
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 evaluated the states on their support for innovation, the number of patents issued to their residents, and the deployment of broadband services. We also considered federal health and science research grants to the states.
Education (175 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.
Business Friendliness (175 Points)