Best and Worst States for Business

Operating in a state where workers are happy and would be more likely to choose to live there if recruited is important for businesses, and Vermont ranks as the second best state in measures of quality of life. The state has a high concentration of arts, entertainment, and recreation establishments. It also has the second lowest share of residents who lack health insurance and the second lowest violent crime rate.

Delaware’s business climate ranks higher than most states due in part to several measures of innovation. Companies in Delaware drew in 48 venture capital deals in 2018, equal to five for every 100,000 people, more than in all but four other states. Delaware also has some of the most favorable corporate laws in the country. The majority of Fortune 500 companies are incorporated in the state.

California ranks as the second best state in the country after only Massachusetts in the technology and innovation component of the index. There were over 3,000 venture capital deals in the state in 2018, and even after adjusting for the state’s nation-leading population, California had the second most venture capital deals per capita. The state also had the most total venture capital monetary investment per capita and the second most patent grants awarded per capita that year.

Connecticut ranks worse than most states in business costs thanks to its business tax climate and utilities prices. But the state ranks as one of the best in terms of quality of life for workers, as well as for having one of the most highly educated workforces, with above average shares of adults with bachelor’s and professional degrees.

A high quality of life in New Hampshire contributes to the state’s better than average business environment. One of the safest states in the country, New Hampshire has a violent crime rate of just 173 incidents per 100,000 people, the third lowest in the country and well below the national rate of 381 violent crimes per 100,000.