Are You in a Business-Friendly State?

June 21, 2011
U.S. Chamber study identifies state-level economic development strategies that are working.

While more and more states are facing dire budget situations, some governors are attracting businesses and growing their economies by redesigning government, curbing spending, modernizing their tax systems and eliminating burdensome regulations.

That's the conclusion of a study released earlier this week by the U.S. Chamber of Commerce. The second "Enterprising States" study highlights specific strategies that all 50 states are employing to remain competitive, restore the jobs and drive economic growth.

"When it comes to job growth, where the rubber meets the road is at the state level," said Thomas Donohue, president and CEO of the U.S. Chamber. "Companies, capital and jobs go where they are welcome. States must focus on expanding the economy by embracing free-enterprise principals that will help businesses grow, prosper and hire."

The study, commissioned by the National Chamber Foundation and prepared by The Praxis Group, singles out states that have created business-friendly environments in economic development policy areas such as taxes and regulation; workforce training; and infrastructure.

The top states in each category are:

Entrepreneurship and Innovation

New Mexico -- Home to Sandia and Los Alamos national labs, the state already is a center for STEM jobs, and its strength is increasing. The state ranks ninth in STEM job concentration, eighth in STEM job growth and 10th in entrepreneurial activity. The state also is home to the New Mexico Technology Ventures Corp., one of the longest-running and most successful research commercialization enterprises.


Louisiana -- The multi-port state of Louisiana ranks in the top five in all four export measures in the study. Much of the state's exports are related to the agriculture and energy economies, but manufactured exports include various chemicals and machinery. Its primary trading partners are China, Japan and Mexico.

Taxes and Regulation

Tennessee -- By virtue of its "low cost of living, fourth-lowest state-and-local tax burden and manageable budget gap," the Volunteer State holds the top ranking in the Taxes and Regulation category. "The home state of country music and Elvis' Graceland has long been known for its business-friendly legislature and for how its Commissioners of Economic Development and Revenue work together to make this 'No Surprises' regulatory policy possible," the study explains.

Workforce and Training

Florida -- The Sunshine State locks down the top spot by virtue of its efficient job-placement system, high share of high school students in advanced-placement courses, and affordable and efficient higher education system. The Quick Response Training Program is an employer-driven training program designed to assist new value-added businesses and provide existing Florida businesses the necessary training for expansion.


Maine -- The Pine Tree State is in the top 10 of all three infrastructure measures in the study, including the nation's highest share of broadband connections over 3 megabits per second. A coalition of state and university officials and private companies created the "Three Ring Binder" project, a dark fiber network designed to provide the "middle-mile" telecommunications infrastructure needed to serve the state's business, academic and telemedicine needs. The network is funded with both federal and private sources.

Alaska Ranks as Top Growth Performer

The study also ranks what it calls the top growth performers, which it measures by combining two-year and 10-year job growth; gross state product (GSP) data such as real GSP growth since 2000; and income data.

By those metrics, Alaska came out on top.

"Alaska places in the top 10 in six of seven economic performance rankings, trailing only in adjusted family income," the study explains. "Its rapid gross-state-product increase propelled it to the top spot in this year's rankings. The state has seen job growth in the past decade in every industry super-sector, and is home to high-value energy and natural resources industries whose growth has fueled large gains in gross state product and productivity.

"Since 2002, Alaska has added more than 6,600 jobs in oil and gas extraction, metal-ore mining and related support activities, as well as another 3,800 in the seafood-products industry and 1,700 in new management, science and technical consulting."

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