CNBC Special Correspondent Scott Cohn to Reveal the 2023 America’s Top States for Business across CNBC Platforms on Tuesday, July 11th
ENGLEWOOD CLIFFS, N.J., June 15, 2023 – From rising interest rates to recession fears to the debt ceiling standoff and some early angst over the 2024 elections, this year has proven to be a challenging for states hoping to attract and keep businesses. Fortunately, CNBC’s America’s Top States for Business study is built for years like this and anything else that our ever-changing economy can throw at us.
Beginning Monday, July 10th, CNBC, First in Business Worldwide, will broadcast coverage of its 16th America’s Top States for Business study. The network will present special coverage around the exclusive study with the rankings being revealed during the network’s Business Day programming on Tuesday, July 11th. CNBC.com will feature the complete overall ranking for all 50 states and include an in-depth look at each of their corresponding rankings across the ten broad categories of competitiveness.
CNBC Special Correspondent Scott Cohn will broadcast live from the top-ranked state beginning on Monday and will announce the top five states on the 2023 list on “Squawk Box” (6AM-9AM ET) Tuesday morning.
In addition, CNBC Digital will feature a variety of coverage on topstates.cnbc.com about each state including economic snapshots (employment, budget, tax and housing data) and exclusive stories looking at the unique issues facing all of the states this year.
Follow @CNBC on Twitter and take part in the social conversation using #TopStates.
CNBC’s exclusive study scores all 50 states on 86 metrics across ten categories of competitiveness. The methodology grades the states based on factors companies consider each year when making site selection decisions, and that states pitch in their efforts to win business. Then, every state’s economic development marketing pitches are analyzed to determine the appropriate weight for each category. The more weight a category carries, the more metrics it includes.
Here are the 2023 categories and weightings:
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.
Economy (360 points – 14.4%)
Particularly in uncertain times, companies are seeking states with stable finances and solid economies. We examine the economic strength of each state by looking at gross domestic product growth and job growth over the past year. We measure each state’s fiscal condition by looking at its credit ratings and outlook, its overall budget picture including spending, revenues and reserves, as well as pension obligations. We rate the health of the residential real estate market. Because a diverse economy is important in any environment, we consider the number of major corporations headquartered in each state. New in 2023, we measure each state’s entrepreneurial economy based on new business formations.
Life, Health and Inclusion (350 points – 14%)
With workers in short supply, companies are seeking to locate in states that can attract a broad array of talent. That makes quality of life an economic imperative. We rate the states on livability factors like per capita crime rates, environmental quality, and health care. We look at worker protections. We look at inclusiveness in state laws, including protections against discrimination of all kinds, as well as voting rights, including accessible and secure election systems. With studies showing that childcare is one of the main obstacles to employees returning to the workforce, we consider the availability and affordability of qualified facilities. And with surveys showing a sizeable percentage of women considering reproductive rights in deciding where they are willing to live and work, we factor abortion laws in this category as well.
Cost of Doing Business (290 points – 11.6%)
As inflation erodes company balance sheets, we measure each state’s tax burden and the strength of its business tax climate. We also measure wage and utility costs, as well as the cost of office and industrial space. We consider the incentives and tax breaks that states offer to reduce business costs, and we consider available incentives targeted toward development in disadvantaged communities.
Technology and Innovation (270 points – 10.8%)
Truly competitive states prize innovation, nurture new ideas, and have the resources to support them. We measure the states based on results, including the number of patents issued per capita, as well as health, science and agriculture research grants. With domestic semiconductor research, development and manufacturing taking center stage, we look at how each state’s place in this crucial technological ecosystem.
Business Friendliness (215 points – 8.6%)
Companies follow the path of least resistance. That includes a legal and regulatory framework that does not overburden business. We measure each state’s lawsuit and liability climates, regulatory regimes covering areas such as trade and labor, as well as overall bureaucracy. We also consider how hospitable states are toward emerging industries including cryptocurrency and cannabis.
Education (125 points – 5%)
A state’s education system is its source for talent and an engine of innovation. It is also a key consideration for companies and families deciding where to put down roots. We look at multiple measures of K-12 education including test scores, class size and spending. We consider the number of colleges and universities in each state as well as long-term trends in state support for higher education. We also consider historically Black colleges and universities (HBCUs), which companies are increasingly seeking to partner with. With the search for talent expanding to include employees with marketable, industry-recognized skills, we measure each state’s community college and career education systems.
Access to Capital (50 points – 2%)
As business costs and interest rates rise, companies large and small need ready access to financing. We look at venture capital investments in each state, as well as traditional bank lending by state in relative and absolute terms. We also look at state-backed capital and loan guarantee programs.
Cost of Living (50 points – 2%)
With inflation persisting, companies and workers are seeking states where prices are stable and daily living is affordable. The cost of living helps drive the cost of doing business. We measure the states based on an index of costs for basic items, with an added emphasis in 2023 on housing affordability.
