Texas and Florida again top Chief Executive magazine’s annual “best and worst states for business” rankings. Washington comes in at No. 31, up one from last year’s ranking.
While we don’t consider these types of “business climate rankings” definitive, we still think it’s useful to see how others see us. And these rankings are based entirely on perceptions (methodology here).
In our survey, we ask CEOs to consider three criteria: Taxes and Regulations, Workforce Quality and Living Environment. In most companies, the CEO makes the ultimate decisions about where to locate and/or expand the business, making his or her perceptions of each state critically important.
More than 500 CEOs complete our detailed survey every year during the first quarter.
Washington ranked 11th in Workforce Quality, 13th in Living Environment, and 36th in Taxes and Regulation.
J.P Donlon, editor-in-chief of Chief Executive, writes,
As important as taxes and regulation are, they aren’t the only factor influencing a region’s attractiveness…
CEOs indicate that the quality of workforce is just as important—in some cases more important than the tax environment. (Utah and Nebraska score highest in workforce quality among all the states.) At $117 billion GE, CEO Jeff Immelt moved the industrial giant’s headquarters from Fairfield, Connecticut to Boston because he felt that the city would give GE access to the advanced thinking and talent afforded by an area with many top universities and colleges offering technical training…
But a state’s talent pool can only take it so far. Few states are blessed with as benevolent a climate and a first-rate university system as California, yet it is consistently ranked last each year by CEOs. In 2014, it topped New York for the largest out-migration of people. Much of the reason lies with the perception that Sacramento has a hostile attitude toward business.
A sidebar story by Warren Strugatch singles out metro Seattle for its approach to development.
Home base for Microsoft, Amazon and Boeing, greater Seattle has enjoyed a balmy economy for decades. To defend marquee employers against corporate poaching, regional business, government and academic leaders united to devised a growth strategy over 10 years ago to leverage its major employers’ economic mojo, tap the brainpower at University of Washington and Washington State to catalyze R&D initiatives and train a technically savvy work force.
Evidence suggests the plan’s working.
For a broader look at the various approaches to evaluating state business climates, check out this 2012 policy brief from the Washington Research Council, which concludes
While the measurements vary, the substance of most business climate studies remains consistent. High quality public services and competitive costs are critical to a state’s long-term growth prospects.