When the going gets tough, the tough get going. That pretty well sums up the race between U.S. states for business and jobs in 2023.
Interest rates and overall costs are still rising, a possible recession is looming, and the nation is still figuring out the future of work in a post-pandemic world. All that is making businesses wary about expanding, and it is forcing every state to up its game.
Which states are meeting the challenge? America’s Top States for Business is back to find out. The annual CNBC study puts all 50 states through their paces using a methodology we first developed in 2007. The aim: to determine which states are delivering most effectively on the things that mean the most to business.
To do that, we start with ten broad categories of competitiveness. These are the factors companies consider year after year when making site selection decisions, and that states pitch in their efforts to woo business.
Next, we analyze each state’s economic development marketing pitches to determine the appropriate weight for each category. For example, if more states are talking about their workforces, the Workforce category is worth more possible points. That way, we measure the states based on the attributes they use to sell themselves.
The more weight a category carries, the more metrics it includes. This year’s study employs 86 metrics across the ten categories. We develop our metrics with input from a broad and diverse range of business leaders, policy experts, and the states themselves. States can earn a maximum of 2,500 total points. The states with the most points are America’s Top States for Business.
Despite policymakers’ best efforts to blunt inflation by slowing the economy, companies are still voraciously hiring. Employers posted more than 10 million job openings in April, in an economy with only about half that number of people available for work. So, it is little wonder that Workforce remains the most talked about topic in economic development circles in 2023, and it is again the heaviest-weighted category in the CNBC Top States study.
The ongoing effort to rebuild the domestic supply chain, powered by massive federal dollars in the CHIPS and Science Act and the Bipartisan Infrastructure Law, has helped solidify Infrastructure as the second most important category. Economic uncertainty has led to more states touting a strong, stable and diverse Economy, raising that category’s weight in 2023. And the unrelenting need to attract qualified workers has raised the profile of Life, Health & Inclusion.
Categories carrying slightly less weight this year include Cost of Doing Business as inflation begins to cool, and Education.
Our study is not an opinion survey. We gather empirical data on the states’ performance in each metric using the most recent figures available. Where it makes sense, we calculate some metrics on a per capita basis to allow large and small states to compete on a level playing field.
In addition to their point totals, states receive a letter grade in each category to measure their performance relative to the competition. Grading is scaled, with the high score equal to 100 percent and the low score equal to 50 percent. However, each state’s overall ranking, as well as its ranking within each category, is based solely on the number of points scored.
Here are this year’s categories and weightings, and an explanation of each:
Workforce (400 points – 16%)
No state is immune from worker shortages, but some states have more and better workers available than others. With skilled workers in such short supply, and with the push to bolster domestic manufacturing, the definition of a qualified worker is expanding. In addition to measuring each state’s concentration of science, technology, engineering and math (STEM) workers and the percentage of workers with college degrees, we also consider workers with associate degrees and industry-recognized certificates. We look at which states are most successful in attracting talent at all levels, considering the net migration of educated workers to each state. We look at state worker training programs, right-to-work laws, and worker productivity based on economic output per job.
Infrastructure (390 points – 15.6%)
Rebuilding supply chains and redefining the very nature of work takes a reimagined infrastructure. We measure the vitality of each state’s transportation system by the value and volume of goods shipped by air, waterways, roads and rail. We look at the condition of highways and bridges, the availability of air travel, and the time it takes to commute to work. With the rise of remote work, we also consider the quality, availability, and price of broadband service in each state. We consider access to markets by measuring the population within 500 miles of each state. We look at the availability of vacant land, and office and industrial space. We rate each state’s utility infrastructure including the condition of drinking water and wastewater systems, the reliability of the electrical grid, and the availability of renewable energy. And we measure each state’s sustainability in the face of climate change, looking at the risk of flooding, wildfires, and extreme weather.
Full article @ https://www.cnbc.com/2023/06/15/how-we-are-choosing-americas-top-states-for-business-in-2023.html