The folks at Pollina Corporate Real Estate are out with their annual Top 10 Pro Business States list.
The ranking looks at 32 different factors, ranging from tax rates, right-to-work legislation, energy costs, infrastructure spending, worker compensation legislation and job creation to state financial incentive programs and state economic development department evaluations.
Here’s Pollina’s top 10, showing a decided tilt to states in the Plains and Midwest:
1. Utah
2. Virginia
3. Wyoming
4. North Dakota
5. Indiana
6. Nebraska
7. South Dakota
8. Kansas
9. Missouri
10. Oklahoma
“In the U.S. today, if you combine state, local, and federal taxes, the tax burden on companies is among the highest the world,” Pollina wrote. ”Add labor costs, and we are one of the highest cost nations to do business in. American companies, if they are to survive in a global economy, must be located in the most pro-business locations possible.”
But is there universal consensus about what “pro business” means and how it translates, and does it always equate to more jobs? As we have just kicked off the college football season, in the words of ESPN analyst Lee Corso, not so fast my friend.
In February, economic analysis firm IHS Global Insight forecast the top states for job creation in 2012. Only three of the Pollina states – Utah, North Dakota and Indiana – appeared on its list.
When CNBC put out its America’s Tops States for Business rankings in June, it also weighted taxes and business costs heavily and used many of the same factors, including cost of doing business, “business friendliness”, workforce and education that Pollina studied. The CNBC list, topped by Texas, included six Pollina states – Utah, Virginia, North Dakota, Nebraska, South Dakota and Wyoming.
And when bizjournals.com looked at job growth trends over a five-year period, from May 2007 to May 2011, its list of the top states in percentage of job growth included five Pollina states – North Dakota (No. 1 with anearly 17 percent increase in the five-year period), Oklahoma, South Dakota, Nebraska and Wyoming. In terms of raw jobs, only North Dakota and Oklahoma showed any substantial job additions.
Pollina notes that the states on its top 10 understand “the importance of producing the best business environment, and thus the best opportunities for job growth and economic prosperity. All 10 top-ranked states should be held up as models for the other 40 states and the federal government.”
Certainly all the states on Pollina’s Top 10 have offer much to model in terms of creating a favorable environment for investment and job creation. And that is to their credit. But it would also seem they don’t the exclusive recipe.
Favorable tax and cost structure, labor costs, regulatory climate and transportation infrastructure are important, and so are industry cluster concentrations, access to supply chains and markets, energy resources, weather, quality of place attributes and a host of other factors that states can’t directly control. Every state offers advantages and attributes that could be a model for what to do and how to do it. Pollina identified 10 states that are doing all the right things. But by no means are they the only states doing things right.
Share your thoughts. What factors do you consider the most important in creating a pro-business environment? Is there a straight line connection between ‘pro-business envrionment’ and job creation?
