Best States For Businesses
To determine what the best states are to build and expand a business 24/7 Wall St. identified nearly 50 measures that contribute to the business climate and reviewed them in every single state. Then Wall St. took those measures and classified them into eight larger categories which independently measured various risks and benefits of doing business in each state.
The result of a confluence of factors and the health of a state’s economy is perhaps the most important consideration for businesses trying to choose the location.
The 10 best states for business had unemployment rates below the national unemployment rate of 7.4% in 2013, while four of the worst states for business had unemployment rates that exceeded the national rate. A state’s economy is tied to a host of factors but not all factors benefit businesses in the same way.
The business climate, in some states, was more favorable to companies which were primarily concerned with minimizing the costs and risks of operation a business. These states include North Dakota, Wyoming and Texas. They tended to enjoy ample natural resources, low cost of living and low regulation.
The average cost of goods and services in six of the best states for business was lower than the national average. A low cost of doing business is a major reason to choose to operate in a particular state and it is emphasized more in some industries than in others.
Some states benefit from a well-educated and highly skilled labor force. States like Massachusetts, Virginia and Minnesota are able to attract businesses that require skills such as professional and business services, health and education services and information. In return these businesses drive economic growth in these states through technology and innovation.
The average wage and salary in three of the 10 best states for business was roughly in line with the national average of $50,012 in 2013 while the average wages were below the national figure. Although the type and size of operating costs carry considerably between industries, wages are a major expense for many businesses.
Here are the best states for business:
- Utah
- Real GDP growth, 2012-2013: 3.8% (7th highest)
- Average wages and salaries, 2013: $42,693 (16th lowest)
- of adults with bachelor’s degree, 2013: 31.3% (14th highest)
- Patents issued to residents, 2013: 1,228 (23rd highest)
- Projected working-age population growth, 2010-2020: 20.5% (23rd highest)
- Massachusetts
- Real GDP growth, 2012-2013: 1.6% (23rd lowest)
- Average wages and salaries, 2013: $60,307 (3rd highest)
- of adults with bachelor’s degree, 2013: 40.3% (the highest)
- Patents issued to residents, 2013: 6,409 (4th highest)
- Projected working-age population growth, 2010-2020: -0.6% (4th highest)
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- Wyoming
- Real GDP growth, 2012-2013: 7.6% (2nd highest)
- Average wages and salaries, 2013: $45,751 (23rd highest)
- of adults with bachelor’s degree, 2013: 26.6% (17th lowest)
- Patents issued to residents, 2013: 113 (3rd lowest)
- Projected working-age population growth, 2010-2020: 8.8% (3rd lowest)
- South Dakota
- Real GDP growth, 2012-2013: 3.1% (9th highest)
- Average wages and salaries, 2013: $36,818 (the lowest)
- of adults with bachelor’s degree, 2013: 26.6% (17th lowest)
- Patents issued to residents, 2013: 129 (6th lowest)
- Projected working-age population growth, 2010-2020: 3.7% (6th lowest)
- Delaware
- Real GDP growth, 2012-2013: 1.6% (20th lowest)
- Average wages and salaries, 2013: $51,093 (12th highest)
- of adults with bachelor’s degree, 2013: 29.8% (19th highest)
- Patents issued to residents, 2013: 453 (15th lowest)
- Projected working-age population growth, 2010-2020: 8.9% (15th lowest)
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