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The State of the States: Best & Worst US States for Business

exeqfind | 24.05.2013

The War Between the States has returned, the economic development one that is.  CEO magazine has just released their ninth annual survey of opinions from Chief Executive Officers about which of the 50 US states is the best and / or worst to do business in.  The magazine polled 736 CEOs which turned out to be the magazine’s highest response on record so it seems that competition between the states for jobs is heating up to a fever pitch.

The War Between the States has returned, the economic development one that is.  CEO magazine has just released their ninth annual survey of opinions from Chief Executive Officers about which of the 50 US states is the best and / or worst to do business in.  The magazine polled 736 CEOs which turned out to be the magazine’s highest response on record so it seems that competition between the states for jobs is heating up to a fever pitch.

The CEO’s were asked to grade the states that they had familiarity or experience working in.  Among the metrics that were used to grade them were:  1) taxation and regulation;  2) quality of the state’s workforce; and 3) the state’s living environment.  Within the tax and regulation metric was a measure that was included to show how CEO’s rate the state’s attitude towards business.  One interesting outcome of the survey was that business leaders see state governments moving faster on pro-growth policies than Washington.

We’ll share the top 10 with you here but encourage you to visit CEO magazine’s website or the magazine for a more comprehensive report.

2013 RANK STATE 2012 RANK 1-YEAR CHANGE

#1 Texas #1   0

#2 Florida #2   0

#3 North Carolina #3   0

#4 Tennessee #4   0

#5 Indiana #5   0

#6 Arizona #10   4

#7 Virginia #6 -1

#8 South Carolina #7 -1

#9 Nevada #12   3

#10 Georgia #8 -2

Texas continues to rank high as a pro-growth state.  Fifty-two of the Fortune 500 corporations are based in Texas and in 2011 fifteen Texas companies went public making Texas the hottest IPO market in the nation.  Austin, Texas is now considered one of the fastest growing technology hubs in the US.  Young tech workers and engineers are able to live very well in Austin as opposed to San Francisco where the housing cost index is 300 percent higher than Austin’s.

Adding to Texas’ appeal is the fact that it shares the longest border with the United State’s largest trading partner – Mexico.  Texas historically leads the nation in freight volumes and in August 2010 became the first state to break the record of having more than $10 billion in surface trade with Mexico in a one month period.  Six Texas ports rank among the top 17 US ports for North American trade which is heavily influenced by the maquiladora industry south of the border.  After Laredo, El Paso ranks as #5, Hidalgo #7, Houston #10, Eagle Pass #12 and Brownsville at #17.

And the winner for the worst state in the US to do business?  California was ranked 50th for the second year in a row.  In 2009, California was ranked as the world’s eighth largest economy with a GDP of $1.89 trillion.  While California clearly leads in many areas such as innovation, climate and technology; the growing burden of over-regulation and the state’s worsening deficit is eroding away advantages.

CEO magazine’s editor-in-chief J.P. Donlon’s Editor’s Notes included commentary from a research paper written by urban development scholar Joel Kotkin.  Mr. Kotkin noted that the most rapid increase in an educated population was taking place in Texas, Salt Lake City and areas of the Midwestern US.  (This was measured by the number of people with BA and BS degrees.)  Further reinforcing this point was Ben Boychuk who wrote in the Sacramento Bee;  “When bright young people start deciding they’d rather live and work in Salt Lake City than in Silicon Valley, maybe California has a bigger problem than its boosters (economic developers) want to admit.  California can no longer take its economic and cultural dominance for granted.  Nice weather won’t save us.  Wiser policies might.”

Warren Carter is an executive search consultant with ExeQfind.  Warren is passionate about helping clients from all over the world find the talent they need to lead and manage their organizations in the US and Mexico.   He enjoys the challenges inherent in matching people that both meet client’s needs as well as them being compatible with the culture of the organization.  Warren can be reached at (619) 921-1795 

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