A Forbes online article by Kurt Badenhausen talks about the best U.S. states for businesses and informs the reader that Virginia took the top spot in the latest ranking . Last year’s top ranking state Utah fell down two spots to number 3 while Minnesota was the biggest gainer at number 8, an improvement of 12 spots over previous year’s ranking. The worst performance was by Wyoming which fell down by 8 places to number 23 while Maine continues to be the nation’s worst state for business for the 4th consecutive year.
Utah continues to be pro-business with lower energy costs but the state has suffered due to low job and income growth. Wyoming also suffered due to slow economic growth and similarly, Maine has several issues such as aging population, weak economic growth, and weak job prospects. In contrast, business conditions have improved in Minnesota which has benefitted from high education rates, low poverty, and high quality of life standards.
What helped Virginia moved to first place include labor supply, favorable regulatory environment, economic strength, and quality of life standards. The state’s government provides incentives to several industries, especially the larger companies within these industries which are major job producers. Virginia also benefits from large pool of technology workers and the diversity of industries also helps the state deal with difficult economic climate more effectively than most other states.
This article helps us understand what factors make a state an attractive place to do business. First of all, the state should have qualified work force so that businesses meet their labor needs. Similarly, the state government should also have policies that provide incentives to businesses, especially those with vast scale of operations. But states which rely on few industries or where labor supply is scarce or not of higher quality may fail to attract businesses. This article also reminds us that the success of businesses’ is not only determined by factors internal to them but also external factors such as government policies, regulations, labor supply and quality, and characteristics of consumer groups.