Category: Economic Development
Recently, I participated in a survey conducted by Area Development magazine asking site selectors to name their top 10 states that meet eight key criteria.
The advisors chosen for the survey work with a nationwide client base and are in a unique position to understand the specific needs of their corporate clients.
Please find below the eight criteria used to rank the states. It should come as no surprise that these items are critical during the site selection process.
1. Business costs
2. Business friendly
3. Corporate tax environment
4. Overall labor climate
5. Workforce development programs
6. Fast-track permitting
7. Rail and highway accessibility
8. Shovel-ready sites
The ten states named most often by the consultants participating were:
3. South Carolina
8. North Carolina
To see how the consultant picks measured up against other well-respected national rankings, Area Development editors also looked at the following studies:
Chief Executive’s “Best/Worst States for Business 2010”
2. North Carolina
CNBC’s “America’s Top States for Business"
4. North Carolina
(Ranking includes a heavily weighted quality-of-life factor, which was not in the Area Development consultant survey).
Tax Foundation’s “2010 Business Tax Climate Index”
1. South Dakota
(The Tax Foundation’s ranking considered individual and business taxes).
Directorship’s “Boardroom Guide to the Best States for Business”
4. South Dakota
(The Boardroom Guide puts an emphasis on a states’ litigation climate).
Forbes’ “Best States for Business 2009”
5. North Carolina
(Ranking includes three factors not included in the Area Development survey of site selection advisors: current economic climate, prospects for growth, and quality of life).
Inc.’s “Top 500, Top 10 States 2009”
3. New York
(Ranking is based on the location of the nation’s Top 500 firms in terms of revenue growth).
While a favorable ranking can provide a starting point in a site selection decision, a city or state’s ability to follow through on commitments and show examples of other successful projects carries a great deal of weight. When so many factors can make or break a project, failing a business once it has made a decision to move forward will guarantee that other companies will keep their distance from that area in the future.
Moreover, the individual needs of a client can often carry the most weight in a project decision. In our combined 50 plus years of site selection and economic development work for public, private and not-for-profit organizations, prior experiences with governmental entities have influenced our recommendations to clients, especially as we go deeper into the process of location modeling and comparative analysis.
For example, when governmental entities provide timetables for infrastructure improvements and permits, and hold to those promises, they are cementing their positive reputations and assuring future business for the state. Similarly, when metro areas can provide quality labor force and workforce development opportunities that help our clients fulfill their employment needs, we, as consultants will make every effort to return to that area to create similar results for their other clients. Finally, predictability, consistency and clarity in terms of the environmental permitting process is important in that it allows a state to demonstrate its ability to fulfill their commitments to a company’s project.
As British Economist Ronald Coase once said, “If you torture the data long enough, it will confess." Surveys and rankings are much like research - know all the facts before you commit.
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