Posted by: Richie Bernardo

U.S. economic growth depends heavily on the performance of individual states. But some contribute more than others. California, for instance, blossomed in 2017 as the fifth largest economy in the world, boasting a GDP larger than that of countries like the U.K., France and India. Meanwhile, Alaska, a state with valuable natural resources, is struggling with the highest unemployment rate in the country, at 7.3%.

In order to determine which states are pulling the most weight, WalletHub compared the 50 states and the District of Columbia across 28 key indicators of economic performance and strength. Our data set ranges from GDP growth to startup activity to share of jobs in high-tech industries. Read on for our findings, expert insight from a panel of researchers and a full description of our methodology.

1. Main Findings
2. Ask the Experts
3. Methodology

Main Findings

Embed on your website<iframe src="//d2e70e9yced57e.cloudfront.net/wallethub/embed/21697/geochart-best-performing-states.html" width="556" height="347" frameBorder="0" scrolling="no"></iframe> <div style="width:556px;font-size:12px;color:#888;">Source: <a href="https://ift.tt/2xEvoye>  

Best State Economies

Overall Rank (1 = Best)	State	Total Score	‘Economic Activity’ Rank	‘Economic Health’ Rank	‘Innovation Potential’ Rank
1	Washington	81.30	1	4	2
2	Utah	74.24	2	1	10
3	Massachusetts	73.02	4	23	1
4	California	70.75	3	32	3
5	Colorado	66.45	8	3	4
6	District of Columbia	58.81	7	7	17
7	Idaho	58.03	13	2	18
8	Oregon	57.37	12	21	7
9	Georgia	57.03	5	12	25
10	Texas	55.83	10	8	21
11	Michigan	55.10	21	30	5
12	North Carolina	55.06	19	9	11
13	Arizona	54.86	11	17	14
14	New Hampshire	54.12	32	11	6
15	Maryland	53.48	18	31	9
16	Delaware	52.32	16	19	15
17	Minnesota	52.10	28	14	12
18	New York	51.42	9	39	20
19	Virginia	50.31	15	10	26
20	Nevada	49.71	6	20	43
21	Florida	49.40	14	5	35
22	New Jersey	48.16	20	44	13
23	Indiana	45.55	26	22	31
24	Pennsylvania	45.08	23	40	22
25	Vermont	45.02	40	25	16
26	Tennessee	44.88	22	6	42
27	Wisconsin	44.69	33	16	27
28	South Carolina	44.35	17	26	40
29	Missouri	43.76	35	24	24
30	Connecticut	42.82	46	45	8
31	Ohio	41.86	24	41	30
32	Rhode Island	41.19	36	38	23
33	North Dakota	40.99	31	27	37
34	Montana	40.70	37	18	33
35	Illinois	40.35	27	49	28
36	Nebraska	39.84	44	13	34
37	Iowa	38.41	42	33	32
38	Alabama	38.13	34	36	39
39	Kansas	37.41	48	35	29
40	Wyoming	36.09	30	43	41
41	Kentucky	35.88	25	42	47
42	New Mexico	35.20	45	50	19
43	Hawaii	35.13	41	29	44
44	Oklahoma	34.51	47	37	38
45	South Dakota	34.00	51	15	46
46	Maine	33.97	38	28	48
47	Arkansas	31.50	43	34	49
48	West Virginia	31.22	29	48	51
49	Alaska	31.19	39	51	36
50	Mississippi	28.14	50	46	45
51	Louisiana	26.07	49	47	50

 

Ask the Experts

Not all economic growth strategies are effective. For the best ways to stimulate the economy and achieve lasting prosperity, we asked a panel of experts to share their thoughts on the following key questions:

1. What are the most effective ways for state and local officials to boost their local economies?
2. What can states do to prevent “brain drain” and develop, attract and retain highly skilled workers?
3. States often compete for business investment by offering tax breaks and other incentives. Do such efforts more often result in a net positive or net negative impact on state economies? Do such efforts create a “race to the bottom” across states?
4. What makes a state attractive to potential entrepreneurs?
5. In evaluating the states with the best economies, what are the top five indicators?

< >

• Adrian Lottie Associate Professor at Eastern Michigan University
• Steven C. Deller Professor and Community Development Specialist in the Department of Agricultural and Applied Economics at University of Wisconsin—Madison
• Stephan Weiler Professor of Economics, William E. Morgan Chair and Director of the Regional Economic Development Institute (REDI) at Colorado State University
• Mike Paruszkiewicz Adjunct Instructor of Economics and Research Associate, Northwest Economic Research Center at Portland State University
• Kim Rueben Senior Fellow at Urban Institute and Adjunct Fellow at Public Policy Institute of California
• James Davenport Professor of Political Science at Rose State College
• Edward Montgomery Dean of the McCourt School of Public Policy at Georgetown University
• David Primo Ani and Mark Gabrellian Professor and Associate Professor of Political Science and Business Administration at University of Rochester
• David J. Hebert Assistant Professor of Economics in the Manuel H. Johnson Center for Political Economy at Troy University
• Christopher R. Bollinger Sturgill Professor of Economics and Director of the Center for Business and Economics in the Gatton College of Business and Economics at University of Kentucky
• Brent R. Hickman Assistant Professor of Economics at University of Chicago
• Cecil E. Bohanon Professor of Economics at Ball State University, Muncie, Indiana
• Katherine Chalmers Associate Professor of Economics at California State University at Sacramento
• Gregory H. Wingfield Fellow at the Center for Public Policy in the Douglas Wilder School of Government and Public Affairs at VCU Wilder School

Adrian Lottie Associate Professor at Eastern Michigan University What are the most effective ways for state and local officials to boost their local economies? There is not one answer to this question. Much of it depends upon the physical as well as intellectual infrastructure. For example, if there is a history of a certain industry in an area as was the case with the coach making industries and lumber industries in Southern Michigan in the early 20th century, you could capitalize on the physical as well as intellectual infrastructure. Michigan had the advantage of the great lakes Northern woods physical environment as well as a large number of tradesmen with skills that could be converted to the manufacture of automobiles. In addition, the research of Michael Porter at the Harvard Business School and Richard Florida at the University of Toronto may be useful. States often compete for business investment by offering tax breaks and other incentives. Do such efforts more often result in a net positive or net negative impact on state economies? Do such efforts create a “race to the bottom” across states? I have not researched this issue thoroughly but, on a tentative basis, it does not appear that tax policies alone are the answer; New York and California have outpaced many states with better, much better tax structures. What makes a state attractive to potential entrepreneurs? Attractive life styles, tolerance for diversity in a real sense and innovative leadership make a state more attractive. Leadership should be in a position to take advantage of the comparative advantages (in the economics academic sense of the term) available in a state. In evaluating the states with the best economies, what are the top five indicators? Flat labor markets as discussed by Florida, innovative leadership, attractive lifestyles for creative innovative youths, opportunities for youths to pursue unusual career paths consistent with 21st century opportunities, thick intellectual infrastructure and obvious overt support for such infrastructure. Steven C. Deller Professor and Community Development Specialist in the Department of Agricultural and Applied Economics at University of Wisconsin—Madison What are the most effective ways for state and local officials to boost their local economies? Entrepreneurship and small business development is vital. Too much attention is paid to large existing businesses and not enough on the smaller "home-grown" businesses. Three reasons. Who has the ear of elected officials? Larger existing businesses, not small business owners who are focused on their businesses 110%. Entrepreneurship development is a long-term strategy and too many elected officials, particular at higher levels of government, have very high discount rates: they would rather play long odds for an immediate grand slam rather than better odds of getting as many runners on base as possible. The grand slam gathers a lot of media attention while a series of singles does not. Local communities, however, are looking increasingly more favorably on small business development. We have been doing a lot of work on firm movement, and the vast majority (over 95%) never move and are in the same community where they were started. Of those that do move, about 2/3rds move less than ten miles: they outgrew their space or found a better space (or lost the lease) and moved down the road, but still in the same community (maybe a neighboring community, municipal boundaries are irrelevant, it’s the larger regional area, say a cluster of 5 or 6 communities). What can states do to prevent “brain drain” and develop, attract and retain highly skilled workers? We used to think, and the data supported, that "people followed jobs," but increasingly it’s flipped, "jobs follow people." What this means is that quality of life in the community is increasingly important: more highly educated people want to live in nice places. Many communities are adopting the idea of "place making," let’s make the community as nice to live as possible, people will want to live here, and then we promote entrepreneurship. This means recreational opportunities, nice restaurants, quality and affordable housing, quality schools (more on this below), public safety, etc. While the vast majority of firms don't move, those that do move for a couple reasons and the final location is often based on quality of life: will top management want to live there? Thus, we want good schools, not to produce quality labor but to be attractive to people: schools do two things, produce quality labor and is a point of attraction. Many communities are looking at "boomerang" migration: encourage youth to go off to college, experience life, then when they are ready to settle down and rise a family, look at returning home. "Place-making" and entrepreneurship are key pieces to this approach. But again, it’s a long-term approach. States often compete for business investment by offering tax breaks and other incentives. Do such efforts more often result in a net positive or net negative impact on state economies? Do such efforts create a “race to the bottom” across states? Tax incentives don't work, but businesses will demand and take them. Goes back to who has the ear of elected officials, larger established businesses. Those are the businesses that are extracting these incentives. There is a theory within the firm location literature referred to as "institutional theory:" big firms are able to extract rents from government, i.e., tax incentives. Think professional sports teams, if you don't build us a new stadium we are leaving, boarder lines on extortion. Too often, the people putting these incentives in place get so wrapped up in "winning" (hitting that grand slam) that they lose sight of the bigger issue. There is a story about Mercedes-Benz moving to Alabama. It was down to South Carolina and Alabama, Mercedes made the decision internally but did not tell either state, because both states kept sweetening the pot. If I was involved with Mercedes I would had done the same thing. The final "sweetening the pot" by Alabama was to purchase 100 of the Mercedes SUVs they were going to build there to be part of the state vehicle fleet. Now think of this, I am a university Extension employee and I travel out to a poor rural community to help them with their economic development efforts, and I show up in a state fleet car, a brand new Mercedes. There are two types of businesses out there: those that face ordinary competition and those that face quality competition. The former businesses really have no influence on the prices that they can charge and the only way to drive profits is to keep costs down (cheap labor, low taxes, limited regulation). The latter businesses drive profitability through innovation, bringing new ideas, products, services to market. What types of firms do you want your economy based on? Low cost of operation or innovation focused? Points you in two different (opposite) directions. What makes a state attractive to potential entrepreneurs? Quality of life. See the discussion above. Where do people want to live? Low cost -- low services, or willingness to pay higher taxes to have better services? Go back to ordinary versus quality competition. Ideally, we want entrepreneurs investing in quality competition businesses. This means quality of life beyond low taxes and limited regulation comes into play. In evaluating the states with the best economies, what are the top five indicators?

• What is happening to the housing markets over time?

• The Kauffman Foundation Entrepreneurship Index.

• Access to higher education (some studies suggest that "some college" is more important than a college degree for economic growth development).

• Greater flexibility for local control (look at states with tax and expenditure limitations that limit local communities from experimenting).

• Higher rates of immigration (foreign) in-migration.

Stephan Weiler Professor of Economics, William E. Morgan Chair and Director of the Regional Economic Development Institute (REDI) at Colorado State University What are the most effective ways for state and local officials to boost their local economies? Attracting and retaining talent, alongside encouraging an entrepreneurial culture that extends to recreation, culture and the arts. States often compete for business investment by offering tax breaks and other incentives. Do such efforts more often result in a net positive or net negative impact on state economies? Do such efforts create a “race to the bottom” across states? Economists have regularly proven that such competition is at best zero-sum, and more generally a net drain on the overall economy. Companies know that they can have states and localities bid against each other, so ultimately make their decisions primarily on the best location by far more relevant variables (infrastructure, labor force, costs, markets), independent of those incentives anyway. Having businesses change location isn’t a net gain for the broad economy; it simply moves existing pieces. The key to dynamic growth is creating new, innovative businesses exploiting fresh niche opportunities, which creates both local and national gains. What makes a state attractive to potential entrepreneurs? Highly skilled workers and potential entrepreneurs, often an overlapping set, gravitate towards amenities, both natural (e.g., coasts, mountains, cooler summers, warmer winters) and human (e.g., arts, entertainment, culture), plus an existing set of young entrepreneurial talent. States can make themselves more interesting to potential entrepreneurs by encouraging creativity in all its forms, from technological innovation to good music. In evaluating the states with the best economies, what are the top five indicators? Job growth, establishment birth rate, income growth, lower income inequality, educational attainment. Mike Paruszkiewicz Adjunct Instructor of Economics and Research Associate, Northwest Economic Research Center at Portland State University What are the most effective ways for state and local officials to boost their local economies? There is obviously no one recipe that will work for all regions, but we've seen that it really comes down to the fundamentals: building, and then leveraging, an area's productive capabilities and advantages over its peers. For the Portland region, this has largely had the flavor of other west coast locales, wherein entrepreneurial activity is attracted to (and attracts) talent, in a sort of beneficial cycle. But we have certainly leveraged one distinct advantage over the other coast cities: a far lower cost of living and doing business. Now that the regional economy has seen outstanding growth, maintaining that cost advantage is our fundamental challenge. What can states do to prevent “brain drain” and develop, attract and retain highly skilled workers? I think of this as an issue of opportunity. Many of the "freshman" boom towns around the country not only had access to a top notch labor market by default (I'm thinking of say, Austin), they also had opportunities waiting for local and imported graduates. In places without a dominant university presence, the opportunity has had to be strong enough the pull not only talented young people, but businesses. For such towns, that often means having a critical mass of businesses in a given cluster (like performance outwear here in our region) that attracts and retains a collective talent pool. States often compete for business investment by offering tax breaks and other incentives. Do such efforts more often result in a net positive or net negative impact on state economies? Do such efforts create a “race to the bottom” across states? These strategies can certainly go either way: they can be executed carefully, in a targeted, limited fashion, or they can resemble a "race to the bottom." In my opinion, most states engage in both strategies simultaneously. An interesting example of doing things carefully would be the incentives offered by the State of Oregon for film and television production. Many, many states do this, and it is quite controversial. I'm not making a judgment on ours, but it does differ from others in that, rather than concentrate on big name Hollywood productions (as is regular practice), the Oregon incentives are intended to grow and support a local ecosystem of professionals and businesses, which mitigates some of the valid arguments against incentives. What makes a state attractive to potential entrepreneurs? I touched on this above, but it really comes down to fundamentals: access to productive talent and room to operate. This is where policy decisions have to manage a difficult balance between quality of life and economic efficiency. In evaluating the states with the best economies, what are the top five indicators? To a large extent, this is a normative question, rather than a matter of fact. For example, a state can have huge local employers, high average income, and be completely unaffordable for working class residents. Or it can boom, with income and upward mobility reaching almost everyone, but rely entirely on one industry. Both those hypothetical states look great from one angle and bad from another. There are lots of real-world combinations like this I can think of. Here are the indicators I tend to focus on:

• Cyclicality (how exposed/sensitive a local economy is to the macro business cycle).

• Population change, particularly migration.

• Industrial makeup (i.e., economic diversity and resilience).

Kim Rueben Senior Fellow at Urban Institute and Adjunct Fellow at Public Policy Institute of California What are the most effective ways for state and local officials to boost their local economies? While places often look for a silver bullet about how to grow their economies, in general what works often depends on the current characteristics of a location and what businesses and people they are trying to attract. Most evidence, however, shows that government investment is not the primary driver of business decisions or outcomes. Governments should target their scarce resources toward gaps in support that businesses cannot fill through the private marketplace and realize that often providing investment in infrastructure or an educated workforce can be as attractive to companies as tax incentives. We examine what tools are available to states to encourage economic development. What can states do to prevent “brain drain” and develop, attract and retain highly skilled workers? The answer could depend on the individuals. Often, investments in colleges and universities and helping researchers convert ideas into new businesses can help retain people in specific places. We found that providing technical assistance or help with financing can help individuals develop and start new businesses. Individuals are increasingly mobile so having amenities that workers want also can help retain them in an area. Ultimately, to keep highly skilled workers in an area there need to be jobs they find attractive, activities they want to do and potentially a way for them to imagine having a thriving future at home. States often compete for business investment by offering tax breaks and other incentives. Do such efforts more often result in a net positive or net negative impact on state economies? Do such efforts create a “race to the bottom” across states? The answer depends on the details of the incentives offered and the role they are hoping the company plays. In general, places should carefully consider what they are hoping to get out of luring a company to their state and weigh the costs in tax breaks and incentives against the foregone income received and what else they could do with those tax dollars. We examined Massachusetts deal to lure General Electric from Connecticut and found that while they offered a $275 million package, many of the investments would help benefit other businesses as well. In addition, part of the reason that the relocation was possible had as much to do with intrinsic characteristics of the Boston area. What makes a state attractive to potential entrepreneurs? Often, the presence of other entrepreneurs, access to capital, an understandable business environment and often a customer base that would be interested in their product. In general, it will depend on what types of businesses the entrepreneur is creating. Some retail or restaurant establishments may be very reliant on a local customer base, some companies need workers with specialized skills so may migrate to places where others have started similar businesses. For new entrepreneurs, the presence of incubators or help finding financing (either through direct loans or assistance accessing capital) can be most important. In evaluating the states with the best economies, what are the top five indicators? I feel like looking at unemployment, per capita income, job growth and house prices all indicate how an area is doing. Of course, some of the indicators of a thriving economy also make it more expensive to locate in. So again, the answer may depend on what a person or business is looking for. San Francisco is booming, but high real estate costs can make it difficult for a new business to succeed. James Davenport Professor of Political Science at Rose State College What are the most effective ways for state and local officials to boost their local economies? At the state level, the most effective thing that can be done for long-term economic growth is to create policies that are conducive to entrepreneurship. This would include things such as relative low tax rates, reducing barriers to work and entrepreneurship such as occupational licensing, and creating an education system that allows students to pursue their interests while developing important skills. At the local level, it is similar, but there is also the opportunity to use public investment to spur economic activity that can be much more efficient and effective than at the state or national levels. Oklahoma City’s MAPS projects are a good example of this. The city passed a one-cent sales tax to invest in certain public projects that spurred private investment. There are a variety of reasons why this can be done more effectively at the local level than at the state or national levels, but probably the most important one is accountability -- it is much easier to know who is responsible for managing these efforts. What can states do to prevent “brain drain” and develop, attract and retain highly skilled workers? First, the state needs to develop an education system as mentioned above. An education system that is more individualized to the student, offers more choices to students and families, and that is unencumbered by a variety of well-intentioned, but ultimately unproductive, state and federal regulations is what states need to create. It is this type of system that will organically grow the entrepreneurial talent in a state. Second, as mentioned above, states need to have policies that are conducive to entrepreneurship. A third thing is something best done at the local level -- to build a culture that inspires talented people to want to stay in their communities. This means having plenty of entertainment and cultural events, and promoting diversity and tolerance of both ideas and lifestyles. If you want to keep and attract “highly skilled” workers, you have to allow them to be who they are. They will not want to live in a place that seems unwelcoming or oppressive. States often compete for business investment by offering tax breaks and other incentives. Do such efforts more often result in a net positive or net negative impact on state economies? Do such efforts create a “race to the bottom” across states? Tax credits and tax breaks are an example of pursuing short-term economic growth at the expense of long-term growth. But this is a difficult challenge for state officials -- especially elected officials. When a neighboring state creates a package of inducements to recruit large employers into their state, it puts a great deal of pressure on any other state who also wishes to recruit that or similar businesses. There’s no question that in the short-run, bringing in an employer who hires 100 or more people and produces a product that a sales tax can be applied to improves both the economy and state/local revenues. The opportunity cost for this short-term boost in the economy is that long-term growth is sacrificed via the tax credits and other incentives, since they reduce the revenues, state and local governments will have to maintain transportation infrastructure, fund education, and a variety of other needed functions that are conducive to private sector economic growth. In addition, companies that move specifically because of these incentive packages can’t be relied upon to remain in a location long-term, if someone else comes along and offers a better deal. The better long-term strategy is to have low tax rates with few “loopholes” so that businesses can properly budget and plan, and that will have them spending less time lobbying. The problems with tax credits and such are that they are a way of subsidizing industries. Often it is argued that this is needed temporarily, until the industry or business “takes-off.” But generally, these subsidies become part of the business expectation and they spend a great deal of time protecting and expanding them, rather than weening themselves off of the subsidies. What makes a state attractive to potential entrepreneurs?

• A strong education system that develops entrepreneurial skills.

• Low barriers to starting a business (or an occupation that could lead to starting a business).

• Tax policies that are conducive to business formation (generally low and few loopholes).

• A cultural life that inspires what economist Richard Florida has termed the “creative class” for those who want to live and share their talents in.

In evaluating the states with the best economies, what are the top five indicators?

• Low barriers to entrepreneurship and business formation.

• Low tax rates (especially corporate and personal taxes).

• Quality education system (recognizing that not everyone defines this the same way).

• Centers of culture and entertainment within the state.

• Willingness to accept “outsiders” into their communities and allow creative people the freedom to be who they are and express that creativity in ways that will profit both them and their communities.

Edward Montgomery Dean of the McCourt School of Public Policy at Georgetown University What are the most effective ways for state and local officials to boost their local economies? There is no single magic bullet or one size fits all formula that guarantees success for local officials looking to generate economic growth. Successful strategies depend upon the extent and nature of local assets (physical and human) and institutions. Building a tourism based economy makes more sense in areas with lots of natural assets like Hawaii or Florida, just as making a high tech economy makes more sense where there are lots of universities like around Boston or in San Francisco. Given those assets, local officials need to focus on putting in place the infrastructure to support the development of those assets, being mindful that individual companies or industries may come and go so long term success requires attention to the basics: educational system; transportation system; access to energy, capital and technology; public safety and livability; tax and regulatory environment; What can states do to prevent “brain drain” and develop, attract and retain highly skilled workers? Fast growing areas are dynamic areas. This mean that they tend to be places where people and firms flow into and even flow out of. Focusing too much on stopping the outflow can make areas overlook the importance of attracting inflow. That said, highly skilled workers want to live in areas where they have career options, where their non-work passions can be met and where it’s easy to find and associate with like minded people. This is why cities are rebuilding their old waterfronts or other city center areas with restaurants, micro-breweries, music and other cultural activities to serve as magnets to attract and retain entrepreneurs and highly skilled workers. A good school system helps keep them there as their families grow and age. States often compete for business investment by offering tax breaks and other incentives. Do such efforts more often result in a net positive or net negative impact on state economies? Do such efforts create a “race to the bottom” across states? The evidence is very mixed about the effectiveness of tax incentive plans. In many instances, the cost in lost tax revenue or direct investments (e.g., public stadiums) per job created is excessive and temporary. Too often, local areas end up competing against each other for a single company offering more and more inducements when they would be better off cooperating to attract them to the region rather than focusing on whether they locate in a particular jurisdiction. All that said, taxes and other incentive do matter. The quality of the services and amenities provided by the location matter too. There are many factors that go into the determination of where firms locate and of their ability to grow, so local governments would be better served to focus on the overhaul environment than on individually tailored tax breaks and incentive package. What makes a state attractive to potential entrepreneurs? Entrepreneur tend to want to be with like-minded people and to have access to networks of people working on similar problems. Industries tend to grow up in clusters where competition spurs innovation and where they can learn from and feed off each other. Depending upon the business and industry, it may be access to other related industries, to universities or research and development centers, to transportation systems, etc. In some cases, they cluster together because it is a great place to live. The best things a state can do are to support those activities that make it easy for an entrepreneur to grow and develop their ideas and to live. In evaluating the states with the best economies, what are the top five indicators?

• Rate of growth of employment;

• Rate of new business startups;

• Median wages or household income;

• Share of the population employed;

• Some measure of resiliency or dependency on a single industry or sector.

David Primo Ani and Mark Gabrellian Professor and Associate Professor of Political Science and Business Administration at University of Rochester What are the most effective ways for state and local officials to boost their local economies? The premise of the question is that governments should actively manage economies, but in reality, government officials are ill equipped to pick winners and losers. This approach fosters corruption and encourages corporations to seek advantages in the political arena instead of in the economic realm. What can states do to prevent “brain drain” and develop, attract and retain highly skilled workers? “Brain drain” is a natural outgrowth of poor job prospects. States can improve those job prospects by creating environments that are welcoming to all businesses, rather than advantaging some companies over others. States often compete for business investment by offering tax breaks and other incentives. Do such efforts more often result in a net positive or net negative impact on state economies? Do such efforts create a “race to the bottom” across states? Assuming a fixed amount of government revenue needs, a tax break for one company implies a tax increase for every other taxpayer in that state or locality, at least in the short run. For instance, many in New York State were outraged when Governor Cuomo created “Start-Up NY,” which provided businesses that locate or expand near college campuses ten years with essentially zero local and state taxes for ten years, while other NY businesses operated in one of the worst tax environments in the country. David J. Hebert Assistant Professor of Economics in the Manuel H. Johnson Center for Political Economy at Troy University What are the most effective ways for state and local officials to boost their local economies? The most effective way to boost local economies is to take a long term approach. Trying to promote economies in the short term is like trying to grow an entire vegetable garden overnight. What can states do to prevent “brain drain” and develop, attract and retain highly skilled workers? The “brain drain” argument entirely misses the point and is wildly insulting. The argument is basically, “There exists some small number of smart people who are capable of being productive and we must attract them here so they can be productive for us.” This is silly because quite literally everyone is capable of being productive, not just people with fancy degrees or high IQs. The real problem that we need to focus on is two-fold: 1) How do we ensure that people have the opportunity to be productive? 2) How to we make sure that productivity is rewarded? To accomplish this, we want to make sure that it’s easy to start a business, that the regulations involved are as light as possible while keeping public safety in mind, and that taxes are low so that people get to keep most of what they earn. Cities and states that do this tend to attract and retain people who are productive, which is what we really want, not smart people. States often compete for business investment by offering tax breaks and other incentives. Do such efforts more often result in a net positive or net negative impact on state economies? Do such efforts create a “race to the bottom” across states? The empirical evidence of tax breaks is often very mixed, with ideology playing a large role in what the economist concludes. Economists on the left tend to view them as harmful to growth; economists on the right tend to view them as beneficial. That being said, I can’t think of a single situation where a tax break led to a race to the bottom. What makes a state attractive to potential entrepreneurs? Entrepreneurs are attracted to places that are conducive to doing business. The two things you really need are easy taxes and stable rules. Easy taxes allow entrepreneurs to keep more of what they earn and stable rules help them plan further ahead in the future. When the rules/regulations are constantly changing, entrepreneurs have less certainty about what they’ll be allowed to do in the future and will focus only on the short term as opposed to taking the long term into consideration. Christopher R. Bollinger Sturgill Professor of Economics and Director of the Center for Business and Economics in the Gatton College of Business and Economics at University of Kentucky What are the most effective ways for state and local officials to boost their local economies? In all honesty, it appears to be rather difficult for any public official to “boost” the local economy, particularly in the short run. In many cases, there is some response when governments reduce some regulations, which make it difficult for businesses. However, these are often not the “boon” hoped for, and occasionally result in unintended consequences. For example, while it may sound great to have lower property taxes, if this results in lower services (e.g., police, fire, snow removal) which then add costs to operation (crime or missed work days), the benefit is far lower than anticipated. An important aspect of a healthy economy is a richly diverse economy. Local economies which are highly concentrated on one industry (in particular extractive industries) are highly vulnerable when demand fluctuates or when competing firms in other regions adopt new technology first (e.g., coal in Eastern Kentucky, Automobile in Detroit, Steel in Pittsburgh). Leaders should not focus efforts on a single industry or firm, but rather should endeavor to provide a region which is attractive to many industries. What can states do to prevent “brain drain” and develop, attract and retain highly skilled workers? Brain Drain is a somewhat overhyped phenomenon. It’s often measured poorly (e.g., measuring the educated individuals who leave, without examining migration into the state). In general, states gain and lose workers as their economy performs better or worse than the region or country. As I note earlier, a broad based economy allows workers to find new employment in different industries as different parts of the economy wax and wane. States often compete for business investment by offering tax breaks and other incentives. Do such efforts more often result in a net positive or net negative impact on state economies? Do such efforts create a “race to the bottom” across states? The evidence suggests that there is very little net effect of these kinds of policies. Evaluations by a number of economists have found that economic growth may occur in the short run, but generally, long run growth is based on other factors. What makes a state attractive to potential entrepreneurs? This, of course, depends on a variety of factors. However, one general factor appears to be a well-educated and skilled labor force. As one examines economies which thrive and those which seem to struggle, education appears to be highly predictive. Estimates by colleagues of mine suggest that educational patterns 100 years ago largely predict differences in economic grown across counties today. In evaluating the states with the best economies, what are the top five indicators? I assume that what you really mean here is “what factors predict good economies.” Educational attainment is certainly one of them. It is, indeed, one of the most important and consistently so. Other factors appear to be population growth, historical performance, and access to transportation. Brent R. Hickman Assistant Professor of Economics at University of Chicago What are the most effective ways for state and local officials to boost their local economies? This is a huge question that could occupy days and days of discussion from half a dozen sub-fields of economics. But, if you would like one suggestion that I particularly believe in strongly, check out this webpage that discusses recent research by a colleague of mine, Jim Heckman (Nobel, 2000), about investing in development of the one most crucial resource society has: human beings. The basic point Jim makes is that investments in the early lives of the most disadvantaged among us tend to reap large rewards to society later on, in the form of a more stable and productive citizenry that requires much less spending on costly programs like criminal justice and social safety nets. I think there are probably two main roadblocks to implementation of this kind of approach, from a purely political standpoint. The first is simple electoral myopia: elected officials wishing to boost their economies this way have to be willing to play the long-run game, but most of them, with an eye to their next re-election campaign, want to focus on investments that will reap tangible returns (even if much smaller ones) that they can point to now. The second problem is that for a long time, political rhetoric in the U.S. has vastly oversimplified the causes and consequences of poverty, so that the electorate is now largely uninformed on and unsupportive of the most effective solutions. Many voters are under a campaign-rhetoric-fueled impression that poor people tend to stay that way because they are just fundamentally unambitious, shiftless, addicted, or criminally inclined, when this is rarely ever true. For example, many of our best and brightest leaders of today would likely not be who they are now (and thus, society would be missing out on the benefits of their leadership) if they had been forced to grow up in the low-income, low-healthcare, low-school-quality, high-violence, low-opportunity setting of some of the more troubled neighborhoods on the south side and south suburbs of Chicago. Neighborhoods where thousands of young kids struggle to grow and develop every day. If you grow up in a stable setting, where relatively cheap housing exists in decent school districts, where schools are not so overwhelmed with behavioral problems from children from broken homes that teaching is hindered, where safe and well-maintained public spaces exist for children to play in, where hospital emergency rooms are not constantly clogged with uninsured families seeking routine healthcare, and where social assistance programs are not hopelessly inundated with need, then you don't have to be one of the best, brightest, or richest families to have a good shot at a productive life. Almost anyone can make it in a setting like that, because when the most basic needs are being met, families and children are freed to concentrate more on higher-order developmental tasks like education and exploring the child's interests and ambitions. By contrast, if you grow up attending under-funded, overwhelmed schools, if your only guaranteed meals during the day are the ones you consume at school, if your primary healthcare provider is whoever happens to be on shift at the ER, if your free time is spent on streets and public spaces where violence can arise at any moment, and if your life is constantly disrupted by moving from address to address and from school to school because of frequent evictions, you better have something exceptional about you in order to compensate. In such a setting, not just anyone can make it anymore; only the more exceptional families and individuals will find the wherewithal to escape the currents that are moving so swiftly against them. Unfortunately, the majority of the American electorate is under the impression that social safety net programs are just "handouts" to undeserving people. What they don't realize is that by investing in a more stable environment for young people, with better access to security, healthcare and education, we will reap large future benefits of having these people be future taxpayers and community pillars instead of ending up on the public dole as adults, or in prisons which is even more expensive. Back to the previous point about the American electorate being under the impression that poor people stay that way simply because they are shiftless, unambitious, or disinterested, I have some current research that demonstrates just the opposite, and suggests that there are vast quantities of untapped human potential among our poor. In a field experiment with Chicago suburban middle-schoolers, we (including myself and John List at the University of Chicago, Chris Cotton at Queen's University, and Joe Price at BYU) found a way of measuring kids' effort level and motivation in the kinds of routine learning-by-doing tasks that make up a child's math education. Some data analysis on this project is still underway and a paper will be available for circulation this summer, but preliminary results are that Black and Hispanic kids in our sample (who tended to come from much poorer homes and who were much more likely to attend struggling, underfunded schools) were actually more willing to give up their free time to study math than were their richer (mostly White and Asian) counterparts. Moreover, we also found that by some measures, poor minority kids put in more observable effort to get the best possible score they could get on a math test, their self-reported preferences for studying math and science over other subjects was actually higher, and they were more intrinsically motivated to study than were other students. These patterns in our data provide a strong repudiation of many prevailing perceptions that poverty is indicative of something fundamental about the individual. Unfortunately though, we also found that these students were receiving fewer inputs to their development, in the form of under-funded schools, lower enrollment in adult-supervised clubs, sports, and after-school activities, fewer helpers for their school work (and especially fewer adults to help), lower incomes, etc. I take these patterns in our data, in combination with Jim's work (and many other economists) to mean that the best investment in economic development is investment in development of actual people. Although this strategy is less dramatic and will take longer to pan out than many politicians want, a more stable, more productive, better educated populace will be better poised to become producers of solutions for our problems, rather than perpetual consumers of the current, ineffective solutions we have now. What can states do to prevent “brain drain” and develop, attract and retain highly skilled workers? States should think long and hard about specializing on their comparative advantages, and partnering with local colleges and universities. For a little background, the world of higher education is largely split in two halves: there are what we call "teaching" schools -- those who primarily specialize in undergraduate education -- and what we call "research" schools -- those who train new PhDs in addition to undergraduates. For this second type, the reason for the name is that in order to earn a doctoral degree, you must produce new knowledge that didn't exist before. Faculty at these universities must also continually produce new cutting edge knowledge through research in order to keep their jobs, which is where the saying "publish or perish" comes from. Even after tenure, a research faculty member's career advancement still depends on the quality and importance of his/her research and that of his/her students. Now back to the original question: When large firms have pressing problems to solve, they often hire big, expensive, consulting firms to help them find solutions. Most people don't recognize this, but research universities (usually top private universities like Chicago, Stanford, Yale, and flagship state schools like Berkely, UMichigan, and UVirginia) serve as de facto consulting firms for society's problems. For example, academic social scientists try to better understand how to allocate scarce economic resources and solve problems like crime, poverty, inequality, international conflict, and political polarization; academic engineers and scientists try to develop better medical procedures, building materials, alternative energy sources, and vaccines; academic statisticians work to develop methods for predicting outcomes from incredibly complex patterns in big data; and the knowledge they all produce is mostly in the public domain, for the betterment of everyone. Virtually every piece of technology that affects your life for the better was facilitated in some way (if not dreamed up entirely) by some academic egghead at a research university who is paid to think about answers to big questions. Much of the public discourse on state funding for colleges and universities focuses only on issues connected to student tuition for undergraduates, but it ignores the benefits of the second role of research universities, which is serving as society's consultants. Each public dollar invested in a research university is a form of investment in economic development, and it doesn't always happen in an indirect, organic fashion either. Several examples come to mind. Pittsburgh used to be an industrial hub for steel production, until the industry collapsed a few decades ago. More recently, the city has re-invented itself as a sort of "Silicon Valley of the East" by taking advantage of the fact that Carnegie Mellon University (in Pittsburgh) is one of the leading engineering and computer science research engines of the world. CMU provides local technology startups, and even established firms like Google, with a steady flow of top programming and engineering talent, including graduates and faculty members involved in relevant ongoing research. The University of Wisconsin-Madison essentially houses the "Harvard of Food Science Departments." Ongoing investments by the state into this institution make a lot of sense given how important is agribusiness to the state economy. Not surprisingly, large agribusinesses and food firms, including Oscar Meyer and Kikkoman, have large hubs of production, R&D, and business operations in Wisconsin, which might not be the case if not for the public investment into UWM as an engine of growth. The University of Utah also feeds into the large medical and biotech industry in the state of Utah, and the Marriott School of Business at BYU (technically a teaching university but one with more of a research focus), is believed to be a major driver of entrepreneurship, another hallmark of the Utah state economy. I suppose at the end of the day, investment into partnerships with research universities to spur development goes back to the main idea I believe in: investing in people. States often compete for business investment by offering tax breaks and other incentives. Do such efforts more often result in a net positive or net negative impact on state economies? Do such efforts create a “race to the bottom” across states? This is another big question. Of course it creates a "race to the bottom" in terms of corporate taxes, but the harder question is whether local governments typically recuperate those revenues from income taxes (more jobs) and sales taxes (if workers making more money also spend more of it too). I suspect that they usually do. What makes a state attractive to potential entrepreneurs? Research universities are drivers of entrepreneurship as well. It is quite common, for example, for new ideas that come up in academic engineering research to be spun off as startup companies to further develop and commercialize the idea. Another trend among the top US universities lately is to have dedicated space for incubating startups of all kinds. The University of Chicago, and several of its peer institutions (e.g., Northwestern, MIT, Stanford, Harvard, and others) have startup incubators which are buildings where students can request office space to make an attempt at starting a new company based on a novel idea. Often, these entrepreneurship centers offer other forms of support too, like business mentoring and connecting top business students with other students having technical expertise. The basic idea is simple: in order to have a successful new business that will become big you need a novel idea that adds value to society. Research universities have always specialized in producing novel new ideas, but more recently they are taking a more active role in converting those ideas into direct economic growth. In evaluating the states with the best economies, what are the top five indicators? 1) Invest in people; 2) Invest in people; 3) Invest in people; 4) Invest in people; 5) Invest in people! The thing about human beings is that, of all our natural resources, they are the only one capable of re-inventing the production process or creating new production processes, rather than just serving as passive inputs to some existing process. If you can figure out how to unleash the vast potential of human creativity, you can change the world. Cecil E. Bohanon Professor of Economics at Ball State University, Muncie, Indiana What are the most effective ways for state and local officials to boost their local economies? Adam Smith, the father of economics, gave a formula for economic development: “Peace, easy taxes and a tolerable administration of justice.” Although this advice is over 250 year old, it rings true today. State and local officials promote economic development when they do their jobs well. Make sure the streets are paved and street signage is clear, the courts are in operation, police and fire services are adequate and keep taxes and regulations low and predictable. Basic government, of course, likely includes maintaining-developing public recreational infrastructure and other amenities. It certainly includes government’s friendly encouragement of local non-profit philanthropic and cultural institutions. This is an environment that not only attracts entrepreneurs and commercial interests from outside the region to relocate to the region but perhaps more important, nurtures the formation of local capital and entrepreneurial ability. What can states do to prevent “brain drain” and develop, attract and retain highly skilled workers? Some forms of brain drain are probably inevitable. The best and brightest high school students in the small town will likely gravitate to larger urban areas. No one expects an Andy Warhol to stay in Pittsburg. The risk is that a targeted public initiative to attract certain kinds of “brains” may well lead to simple copycatting of locations that are known for attracting and retaining talented employees. Eastern Kentucky is unlikely to beat Silicon Valley at its own game. Better to develop the unique assets, history and lifestyle offered in your part of the world knowing that some highly talented folks are looking to exit from their current locations. States often compete for business investment by offering tax breaks and other incentives. Do such efforts more often result in a net positive or net negative impact on state economies? Do such efforts create a “race to the bottom” across states? This is a tough question. Local economic development authorities often note that they must have tax-benefit package that are competitive with other locations. However, some simple marginal cost-benefit analysis are always in order on any incentive package. What additional benefits do members of the community obtain by Firm X coming to their town? What additional costs do the existing members of the community bear by Firm X coming to their town? Reduce this to tax and spending liabilities and if the ratio of benefits to costs for local residents is less than one, someone needs a long and hard look at the package. It is OK to say no. Impoverishing the locals is no road to economic development. What makes a state attractive to potential entrepreneurs? The entrepreneur can make more profit in your state than elsewhere. In evaluating the states with the best economies, what are the top five indicators?

• Economic growth overall;

• Economic growth in income per capita;

• In migration to the region, or more precisely, net changes in in-migration;

• Business profits;

• Wage/employment increases.

Katherine Chalmers Associate Professor of Economics at California State University at Sacramento What are the most effective ways for state and local officials to boost their local economies? The best way for state and local officials to boost their local economies is by focusing on the inputs that will be needed for productive firms and especially the quality of those inputs. A lot of focus is typically placed upon the regulatory environment and tax structure of a location, but in reality, if a firm wants to (re)locate somewhere, those qualities are less influential than a highly skilled labor force and access to land that has well-connected transportation infrastructure. People, and firms, want to live in attractive places. The most effective strategies for boosting a local economy are those that increase the attractiveness of a local economy, things like improving and extending public transportation. Denver did this several years ago with its extension of light rail service along the I-25 corridor as well as extending it out to the airport. I am still amazed by the number of cities I visit that don't have public transportation to/from the airport. Admittedly, there are intrinsic locational characteristics that cannot be modified by economic strategy, thinking particularly here about certain locations blessed with geographical features like mountains, rivers, coastline. However, even those locations that aren't blessed by geography can improve the quality of the local schools, improve/extend public transportation, create public gathering spots and program local events to encourage civic unity, etc. For example, Sacramento, where I live, has pursued a "Farm to Fork" development strategy of promoting local agricultural production and its link to local restaurants that culminates in an annual dinner on a local landmark, the bridge over the Sacramento River. By introducing farmers to the eventual consumers of their food, they are creating civic ties that wouldn't exist otherwise. Tickets for this event sell out within hours. Basically, there's no one silver bullet, but those programs that help to make it easy to live someplace, in spite of geography and in spite of climate, are going to be more successful. The NY Times had a nice front page article this week about how Pittsburgh has turned itself around since the collapse of the steel industry and no longer matches the stereotype of coal/steel Appalachia that people like Trump still carry around in their heads. What can states do to prevent “brain drain” and develop, attract and retain highly skilled workers? The presence of large research universities helps to attract highly skilled workers and keep them in the area. Part of the reason that Denver has thrived is the presence of University of Colorado and Colorado State University graduates who want to remain in the area once they complete their studies. The San Francisco Bay Area is also blessed with a large number of research universities nearby as well. The more entrenched/entangled an area can make its local student population during the course of their studies, the less likely that student is to leave upon graduation. Programs that promote strong links between the local business community and the university such as internships, job training, etc. will make it easier for students to stay. Why leave when you already have housing and a job in the city where you went to school? There are some large cities (New York, Boston, Chicago, and San Francisco come to mind) that attract people because of the diversity of employment options they offer. Smaller cities, like Denver or Detroit, need to focus on home-grown talent because unfortunately, attracting highly skilled labor is a "If you build it, they will come" sort of scenario. States often compete for business investment by offering tax breaks and other incentives. Do such efforts more often result in a net positive or net negative impact on state economies? Do such efforts create a “race to the bottom” across states? Simply put, such efforts result in what's known in economic theory as a "winner's dilemma" or in your words a "race to the bottom." You've won by offering the most tax breaks and potentially hobbling your ability to fund public programs, but what have you really won? Is the price worth it? And firms are well aware of this competition and more than happy to game the system. A classic example of this is Volkswagen in the 1980s pitting the states of Pennsylvania and Ohio against each other. Even though the company had already decided to locate in PA, they wanted to sweeten the deal and could do so by making the two states compete against each other. Firms like to focus attention on regulations and taxation because it will benefit them directly, but if the labor force is highly skilled and relatively low cost, they will (re)locate in spite of those regulations. How many companies have located in Silicon Valley or in Boston even though California and Massachusetts are widely perceived to have restrictive regulatory policies? Gregory H. Wingfield Fellow at the Center for Public Policy in the Douglas Wilder School of Government and Public Affairs at VCU Wilder School What are the most effective ways for state and local officials to boost their local economies?

• Invest in education: K-12, the Trades, STEM , Community Colleges and Higher Ed.

• Fund more infrastructure: port improvements, better airports and more alternative transit.

• Revisit the existing tax burden on new and existing business and cut where appropriate.

• Develop a comprehensive workforce training (re-training) program that includes: getting that first rung of the ladder job, re-training for dislocated workers, training for "gap" workers.

• Encourage more research to be conducted at state universities in cyber security, advanced manufacturing, bioengineering, etc.

• Encourage exporting by SMEs by helping to train them for overseas selling and subsidize their efforts.

What can states do to prevent “brain drain” and develop, attract and retain highly skilled workers?

• Provide tax credits to companies hiring tech level employees.

• Waive in-state tuition for those employees of companies moving to the area or expanding.

• Work with State higher education and the business community to hire "local" at job fairs, etc.

• Provide funds to "retain" laid off workers while they are being re-trained so they don't lose their house, car, etc.

States often compete for business investment by offering tax breaks and other incentives. Do such efforts more often result in a net positive or net negative impact on state economies? Do such efforts create a “race to the bottom” across states? I wish incentives were banned in economic development. However, it seems they are a necessary evil. At least in Virginia, we require a positive ROI by year 3-5 depending on the company's investment and the timing of the project. Studies in Virginia show that the state and local governments are getting a positive return on the incentives provided to expanding and new business. However, at what cost to other needs such as higher education, roads, health, etc.? What makes a state attractive to potential entrepreneurs?

• Maintain a positive business climate (Virginia does a very good job).

• Provide access to V.C./Angels/2nd stage funds.

• Provide access to low cost or free business.

In evaluating the states with the best economies, what are the top five indicators?

• Number of new jobs added versus the loss of jobs, and note the net number.

• Keep up with the unemployment insurance pay out not just the unemployment rate.

• Monitor the new housing sales and review the change in housing cost.

• State government surplus or deficit.

• Nonfarm payroll growth.

• Consumer price index and cost of living.

• Consumer and business confidence numbers.

Methodology

In order to determine the best state economies, WalletHub compared the 50 states and the District of Columbia across three key dimensions: 1) Economic Activity, 2) Economic Health and 3) Innovation Potential.

We evaluated those dimensions using 28 relevant metrics, which are listed below with their corresponding weights. Each metric was graded on a 100-point scale, with a score of 100 representing the highest economic performance.

We then determined each state and the District’s weighted average across all metrics to calculate its overall score and used the resulting scores to rank-order our sample.

Economic Activity – Total Points: 33.33

• GDP Growth: Quadruple Weight (~13.33 Points)
• Share of Fast-Growing Firms: Triple Weight (~10.00 Points)Note: This metric measures the number of firms in Deloitte’s Technology Fast 500 list as a percentage of total firms.
• Exports per Capita: Full Weight (~3.33 Points)
• Startup Activity: Full Weight (~3.33 Points)Note: This metric measures the rate of newly established firms.
• Quality of Legal System: Full Weight (~3.33 Points)

Economic Health – Total Points: 33.33

• Unemployment Rate: Double Weight (~4.30 Points)
• Underemployment Rate: Half Weight (~1.08 Points)
• Change in Nonfarm Payrolls (2017 vs. 2016): Full Weight (~2.15 Points)
• Change in Total Civilian Labor Force (2017 vs. 2016): Full Weight (~2.15 Points)
• Increase in Ratio of Full-Time Jobs to Part-Time Jobs (2016 vs. 2015): Half Weight (~1.08 Points)
• Median Annual Household Income Adjusted for Cost of Living: Full Weight (~2.15 Points)
• Growth in State Personal Income (2017 vs 2016): Full Weight (~2.15 Points)
• Government Surplus/Deficit per Capita: Full Weight (~2.15 Points)
• Unfunded Public Pension Plans per Capita: Full Weight (~2.15 Points)
• Share of Uninsured Population: Half Weight (~1.08 Points)
• Share of Population in Poverty: Full Weight (~2.15 Points)
• Foreclosure Rate: Full Weight (~2.15 Points)
• Growth in Number of Businesses (2016 vs. 2015): Full Weight (~2.15 Points)
• Fiscal Health: Full Weight (~2.15 Points)Note: This metric is based on the George Mason University Mercatus Center’s state fiscal rankings, particularly the State Fiscal Condition Index, which refers to the sum of cash, budget, long-run, service-level and trust-fund solvency indices for each state.
• Building-Permit Activity: Full Weight (~2.15 Points)Note: This metric measures the total number of new privately owned residential-building permits issued annually per capita.
• Average Educational Attainment of Recent Immigrants: Half Weight (~1.08 Points)Note: The educational attainment of recent immigrants aged 25 and older from a foreign country is classified as having either no high school diploma; a high school diploma or equivalent; some college experience or an associate’s degree; a bachelor’s degree; or a graduate or professional degree.
• Average Educational Attainment of Recent Migrants from Other U.S. States: Half Weight (~1.08 Points)Note: The educational attainment of recent migrants aged 25 and older from other states within the U.S. is classified as having either no high school diploma; a high school diploma or equivalent; some college experience or an associate’s degree; a bachelor’s degree; or a graduate or professional degree.

Innovation Potential – Total Points: 33.33

• Share of Jobs in High-Tech Industries: Full Weight (~5.56 Points)
• Share of Jobs STEM Professionals: Full Weight (~5.56 Points)
• Independent Inventor Patents per 1,000 Working-Age Population: Full Weight (~5.56 Points)
• Industry R&D Investment Amount per Total Civilian Employed Population: Full Weight (~5.56 Points)Note: “R&D” refers to research and development.
• Nonindustry R&D Investment Amount as Share of GDP: Full Weight (~5.56 Points)Note: “R&D” refers to research and development.
• Entrepreneurial Activity: Full Weight (~5.56 Points)Note: This metric is based on the Kauffman Index of Startup Activity, which is an equally weighted index of three normalized measures of startup activity, as defined by the Kauffman Foundation: the Rate of New Entrepreneurs (percentage of adults becoming entrepreneurs in a given month); the Opportunity Share of New Entrepreneurs (percentage of new entrepreneurs driven primarily by “opportunity” vs. “necessity”); and the Startup Density of a Region (number of new employer businesses, normalized by the business population).

 

Sources: Data used to create this ranking were collected from the U.S. Census Bureau, Bureau of Labor Statistics, Bureau of Economic Analysis, Deloitte, United Health Foundation, Mercatus Center at George Mason University, Council for Community and Economic Research, Renwood RealtyTrac, United States Patent and Trademark Office, National Science Foundation and Ewing Marion Kauffman Foundation.

from Wallet HubWallet Hub


via Finance Xpress