State of the States: CNBC’s take on the best ones for business.

In CNBC’s recently published scorecard, don’t look to the Northeast or California to find the states that are best ones for business.

CNBC State Rankings for Business
L’Etoile du nord: Just as in its state motto “Star of the North,” Minnesota is the stellar performer in CNBC’s 2015 state ranking of business competitiveness. (Click on the map for a larger view.)

State and city rankings are a source of fascination for many people. Of course, there are many ways to fashion them to place nearly any state or city you like at the top of the heap.  Some of the lists use criteria that are so convoluted, it stretches credulity.

Since when is Baltimore the best city in America for single men?  Since it was ranked #1 in this evaluation, evidently.  Many of us who know the city’s innards really well would disagree heartily, of course.

But I think the CNBC 2015 scorecard on state business climates, published earlier this month, is based on a more solid set of criteria.

CNBC created it by scoring all 50 states on approximately 60 separate measures of competitiveness – a list that was developed with input from an array of business and policy experts, official government sources, and CNBC’s own Global CFO Council, and that uses government-generated data.

CNBC then grouped these measures into ten broader categories, weighting the results based on how often each is used as “selling point” in state economic development marketing and promotional efforts. This was done in order to rank the states based on the criteria they themselves use to showcase their attractiveness to businesses considering expansion or relocation.

Here are the ten broad categories in the CNBC evaluation, and which states ranked first and last within them:

  • Access to capital: #1 North Carolina … #50 Wyoming
  • Business friendliness: #1 North Dakota … #50 California
  • Cost of doing business: #1 Indiana … #50 Hawaii
  • Cost of living: #1 Mississippi … #50 Hawaii
  • Economy: #1 Utah … #50 Mississippi
  • Education: #1 Massachusetts … #50 Nevada
  • Infrastructure: #1 Texas … #50 Rhode Island
  • Quality of life: #1 Hawaii … #50 Tennessee
  • Technology/innovation: #1 Washington … #50 West Virginia
  • Workforce: #1 North Dakota … #50 Maine

Do we see any surprises here?  To my mind, the high and low rankings look pretty well-aligned with the anecdotal information we hear all the time.

Perhaps we might consider several other states besides Nevada to be “bottoms” in education. And personally, I am pretty shocked to see Tennessee ranked last in quality of life. Having lived there during my college years at Vanderbilt University, I never considered the state to be substandard when it came to that attribute.

But It’s when CNBC amalgamates all of the rankings to come up with its overall state ranking that a few surprises emerge.

Such as … Minnesota notches first place overall. I’m sure some people are genuinely surprised to see that.

For the record, here is CNBC’s list of the Top 10 states for business in 2015:

  • #1 – Minnesota
  • #2 – Texas
  • #3 – Utah
  • #4 – Colorado
  • #5 – Georgia
  • #6 – North Dakota
  • #7 – Nebraska
  • #8 – Washington
  • #9 – North Carolina
  • #10 – Iowa

We see that four of the ten top states are in the Midwest … three are in the South … three are in the West … but none are in the Northeast.

CNBC study on business competitiveness
The center holds: According to CNBC, most of the most competitive states for business are in the Mid-Continent region.

By contrast, for the most part the Bottom 10 states are clustered in other areas of the country … including four Northeastern states plus Alaska and Hawaii, two states that clearly have unique locational circumstances:

Hawaii lacks business competitiveness
Not so sunny: Hawaii’s bad business climate.
  • #40 – Pennsylvania
  • #41 – Alabama
  • #42 – Vermont
  • #43 – Mississippi
  • #44 – Maine
  • #45 – Nevada
  • #46 – Louisiana
  • #47 – Alaska
  • #48 – Rhode Island
  • #49 – West Virginia
  • #50 – Hawaii

CNBC has issued a raft of charts and maps providing details behind how their ratings were formulated, and the results for each of the major categories. You can view the data here.

Speaking for yourselves, in what ways would you challenge the rankings? What strikes you here as different from your own personal experience in doing business in various states? Please share your perspectives with other readers.

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