Special Report

The Best (and Worst) States for Business

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6. New Hampshire
> 1-yr. real GDP change: +1.6% (17th largest growth)
> Avg. salary: $52,747 (15th highest)
> Adults w/ bachelor’s degree: 36.6 (7th highest)
> Patents issued: 63.7 (6th most)
> Working-age population chg. 2010-2020: -3.9% (6th largest decrease)

Those living in poverty are far less likely to have disposable income to spend on nonessential consumer goods, and so places with a low concentration of poverty are more likely to have plenty of paying customers. In New Hampshire, just 7.3% of the population lives in poverty — the lowest rate in the country. Part of the reason for this low poverty rate is that a very small share of New Hampshire’s labor force cannot find work. The state’s annual unemployment rate of just 2.8% is the lowest in the country. New Hampshire’s low unemployment is also is a sign businesses are doing well.

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7. Minnesota
> 1-yr. real GDP change: +2.1% (13th largest growth)
> Avg. salary: $53,445 (13th highest)
> Adults w/ bachelor’s degree: 34.8 (11th highest)
> Patents issued: 79.6 (4th most)
> Working-age population chg. 2010-2020: +3.6% (11th smallest growth)

Less than 10% of the Minnesota population lives in poverty, the fifth lowest rate among states. This low poverty rate indicates the state’s businesses are more likely to have interested and paying customers.

According to the American Survey of Entrepreneurs, state businesses are among the least likely to report a negative impact on sales from slow business, lost sales, and late or non-paying customers. Like many states on this list, Minnesota has a substantial STEM sector, which coincides with a high issuance rate for patents.

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8. Washington
> 1-yr. real GDP change: +4.2% (the largest growth)
> Avg. salary: $58,977 (7th highest)
> Adults w/ bachelor’s degree: 35.1 (10th highest)
> Patents issued: 87.5 (3rd most)
> Working-age population chg. 2010-2020: +9.7% (9th largest growth)

Rapid economic growth is not always favorable for businesses in the long term, as they can lead to an economic bubble and long-term crisis for regional enterprise. However, growth can often be sustained, and in the short term, it is a positive sign for a region’s economy. Washington state has one of the fastest growing economies in the country, with a nation-leading 4.2% GDP growth in 2016. With companies such as Microsoft and Amazon operating in the state, there has also been a great deal of innovation in Washington. Over 87 patents are issued per 100,000 state residents in a year, the third most of any state.

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9. Vermont
> 1-yr. real GDP change: +0.7% (12th smallest growth)
> Avg. salary: $44,089 (11th lowest)
> Adults w/ bachelor’s degree: 36.4 (8th highest)
> Patents issued: 72.2 (5th most)
> Working-age population chg. 2010-2020: -5.4% (3rd largest decrease)

The presence of violent crime can drive residents out of a given area and hamper businesses’ ability to thrive. One of the safest states in the country, Vermont’s violent crime rate of 158 incidents per 100,000 residents is less than half the U.S. violent crime rate of 386 per 100,000. The state also ranks relatively well for its capacity for innovate. There were about 72 patents issued in the state for every 100,000 residents in 2015, more than in all but four other states.

Educated populations can be a draw for companies requiring skilled workers, and Vermont’s population is one of the best educated of any state. Among adults in the state, 36.4% have at least a bachelor’s degree and 15.2% a graduate or professional degree — each among the 10 highest shares in the country.

10. Virginia
> 1-yr. real GDP change: +0.5% (7th smallest growth)
> Avg. salary: $56,319 (10th highest)
> Adults w/ bachelor’s degree: 38.1 (6th highest)
> Patents issued: 24.5 (22nd fewest)
> Working-age population chg. 2010-2020: +7.8% (14th largest growth)

A well-educated workforce can make a region especially attractive to potential employers — and Virginia has one of the best educated populations of any state. In Virginia, 38.1% of adults have a bachelor’s degree or higher, well above the 31.3% of adults who do in the United States as a whole and a larger share than in the vast majority of states.

A low crime rate further contributes to Virginia’s appeal to new and relocating businesses. A high incidence of violent crime can drive top talent as well as potential customers out of a given region, and there were just 218 violent crimes for every 100,000 people in Virginia in 2016, the fourth lowest violent crime rate of any state. Virginia’s population is also more likely to have more disposable income than most Americans, which in turn can drive up consumer spending. The typical household in the state earned $68,114 in 2016, over $10,000 more than the typical American household.