TEXAS: BEST BUSINESS CLIMATE
This year Business Facilities’ State Rankings found Texas to be the top state for Best Business Climate. A low tax burden, robust incentives, world-class higher education institutions, and steady population growth combine to offer an environment where businesses across varied industries have the opportunity to thrive.
Texas is one of six states in the United States that does not impose a corporate income tax. (The others without that tax are Ohio, Nevada, South Dakota, Washington, and Wyoming.)
A signature incentive, the Texas Enterprise Fund, are offered to projects that are offering significant projected job creation and capital investment and where a single Texas site is competing with another viable out-of-state option.
In the fourth quarter of 2021, the state’s economy grew at a rate of 10.1%, outpacing the nation’s rate of 6.9%, as reported by the U.S Bureau of Economic Analysis.
In 2022, Texas attracted more than 1,000 projects, more than double the second-highest state, representing an expected $44.75 billion in capital investment and the creation of more than 35,000 jobs. Foreign direct investment accounts for $16.3 billion and about half of new jobs recorded for that year. Advanced manufacturing in the state has seen robust growth, with significant investment from semiconductor, electric vehicle, and aerospace/aviation firms.
And major companies are choosing the Lone Star State for corporate headquarters with 55 Fortune 500 firms calling the state home. In 2022, Caterpillar Inc. moved its global headquarters to Irving, TX. The construction machinery and equipment manufacturer had a presence in Texas since the 1960s and decided to establish its headquarters in an existing Irving facility.
In a state as large as the Lone Star State, diversity abounds. Just a few instances: North Texas boasts the second-largest metropolitan area in the United States and is a magnet for corporate headquarters. South Texas borders Mexico and offers businesses access to the four Foreign Trade Zones (FTZs) to facilitate cross-border trade. Central Texas is known for its diverse business sectors and is home to seven top-ranking colleges and universities to contribute to the growing talent pipeline.
According to U.S. Bureau of Labor Statistics, 575,000 jobs were added in Texas from March 2022 to March 2023.
Rounding out the top five states for Best Business Climate in the 19th Annual Rankings Report are North Carolina, Virginia, Utah, Tennessee.
Virginia Takes Lead For Workforce Training
This year, Virginia tops the Customized Workforce Training category. With workforce attraction and retention a crucial factor for companies across all industries, the Virginia Talent Accelerator program launched by the Virginia Economic Development Partnership in 2019 delivers what new and expanding businesses need—quickly and efficiently. Taking the top spot for Customized Workforce Training, the Virginia Talent Accelerator Program is a custom workforce initiative in collaboration with higher education partners throughout the state.
Characterized by the direct delivery of recruitment and training services that are fully customized to a company’s products, processes, equipment, standards, and culture, the Virginia Talent Accelerator Program supports a business from the moment it chooses to invest in the state.
The Virginia Talent Accelerator Program team has made great strides to attract and retain investment to the state since program inception. This innovative, high-quality service has played a significant role in creating more than 10,000 jobs since 2019.
In 2022, The LEGO Group chose Virginia for its first U.S. manufacturing facility, and the company has made clear the role that this program played in its decision to locate there, creating over 1,700 jobs.
In the 19th Annual Rankings Report, the top five for the Customized Workforce Training program ranking is rounded out by Louisiana, Alabama, Texas, and Missouri.
Louisiana Tops Tech Talent
Taking first place for the Tech Talent Pipeline category is Louisiana. The state’s move up from second place in 2022 to the top spot this year recognizes an impressive and proactive focus on expanding the skilled tech workforce through programs that are quickly delivering results. Also noteworthy is the state’s initiatives toward developing its skilled workforce for a burgeoning renewable energy industry.
A bevy of tech-focused economic development initiatives and incentives, such as the Small Business Innovation and Research grant match program, have firmly established Louisiana as a standout state for tech companies across all sectors to develop. Meanwhile, investment into the Cyber Corridor in the northern part of the state are drawing academia, industry, and government resources and supporting the demand for talent in cybersecurity. Backed by the full array of the state’s workforce programs under Louisiana Economic Development, the tech talent pipeline in Louisiana has nowhere to go but up.
Following Louisiana in the top five states for Tech Talent Pipeline in the 19th Annual Rankings Report are: Virginia, Massachusetts, California, and Connecticut, respectively. They are followed by Colorado, Texas, Washington, Delaware, Utah, New Jersey, and Michigan.
Population Growth A Boost In Search For Talent
Workforce training and talent pipelines depend on availability of potential employees. While current residents are certainly an asset, with today’s migration activity across state lines the rate of population growth is as factor to take note of in site selection.
This year’s Population Growth rankings looked at U.S. Census Bureau data from July 2021-July 2022, with taking into account growth by number, and also by percentage. Florida is the leader in the ranking with more than 22 million people moving to the state. This represents a 1.9% increase, and just above the states ranked next—Idaho (1.8%) and South Carolina (1.7%).
Florida’s labor force grew by 352,000, or 3.4%, over the year in November 2022, more than double the national rate. Florida’s defense industry is one economic driver with more than 860,000 direct and indirect jobs. In June 2022, Governor Ron DeSantis signed six bills to support veterans, military members, and their families in finding employment and educational opportunities. Business creation is benefitting from this influx with data indicating that Florida has led the country in new business formations with over 1.7 million created since January 2020 and that over one-third of those were launched in 2022.
Making Moves: Automotive & Electric Vehicles
The traditional Automotive ranking is led by Michigan, Indiana, and Ohio. The choice of the 10 states included in this ranking took into account employment (by number and % of workforce), percent of state GDP, exports, and expected growth from announced company investments. The Alliance for Automotive Innovation, 2022 Report, noted that motor vehicles and parts accounted for 50.8% of Michigan’s state trade in 2021, and that 67% of all motor vehicle and parts R&D in the industry occurs in that state.
It’s notable that Indiana and Ohio were listed as having the third and second highest automotive industry employment, according the Alliance report and based on 2020 data.
With 2022 considered a pivotal point for the growth of electric vehicle adoption, this year’s Annual Rankings introduces the Electric Vehicle Industry Investment and Electric Vehicle Charging Infrastructure categories. The former evaluates existing and expected capital investment and job creation, and the latter reveals which states are leading in charging infrastructure for electric vehicles (EVs).
The National Automobile Dealers Association (NADA) reported that in 2022 alternative fuel vehicles gained market share in the U.S., as sales of hybrids, plug-in hybrids, and battery electric vehicles accounted for 12.3% of new vehicles sold. That is an increase of 2.7% compared to 2021.
At the top of the leaderboard for EV Industry Investment are Michigan, Tennessee, and Georgia—each attracting more than $15 billion and 16,000 jobs over the past eight years from the industry (including battery and component manufacturing). Investment from the past 12 months in these states has also been significant. Rounding out the top five are Nevada, Kentucky, South Carolina, and Ohio.
In the 19th Annual Rankings Report, California, New York, and Florida lead the top 10 states for EV Charging Infrastructure. They are followed by Texas, Massachusetts, Colorado, Washington, Georgia, Maryland, and Pennsylvania, respectively. Based on the U.S. DOE’s Alternative Fuel Station Locator online tool, there nearly 55,000 fueling stations for electric vehicles (all charger types). Set at number one in this ranking, California has 14,863 stations, followed by New York with 3,494.
Manufacturing Hubs
Over the past two years, post-pandemic shifts have touched virtually every aspect of economic growth and social shifts in some fashion. Manufacturing relocation and expansion decision-making is one of these aspects, with supply chain challenges set off by the pandemic cascading right into 2023. States traditionally known for manufacturing have retained existing companies and attracted new investment, while locales not historically considered for industrial operations have made their way on the site selection map for many firms.
In this year’s manufacturing rankings, Indiana leads for Manufacturing Jobs (% of workforce) and Manufacturing Output (% of real GDP). Taking into account 2022 figures from the U.S. Bureau of Economic Analysis, along with data from the National Association of Manufacturers, Indiana tops the list.
For Manufacturing Jobs, the list of 15 includes a close second Wisconsin, followed by Iowa, Michigan, Kentucky, Alabama, Arkansas, Mississippi, Ohio, Kansas, South Carolina, Tennessee, Minnesota, North Carolina, and South Dakota.
Ranked second for Manufacturing Output is Louisiana, followed by Wisconson, Michigan, Kentucky, Alabama, Iowa, Ohio, North Carolina, Mississippi, Kansas, Tennessee, South Carolina, Arkansas, and Oregon.
Medtech Sees Steady Growth
Medical device and equipment manufacturers employ nearly 400,000 in the U.S., accounting for 19% of the nation’s biosciences jobs. That’s according to the TEConomy/BIO October 2022 report, “The U.S. Bioscience Industry: Fostering Innovation and Driving America’s Economy Forward.” And, since 2018, the subsector has grown by 5.5% and has averaged 1.8% growth annually, about the same average growth rate seen since 2015 for medical device jobs, stated the report. Performance across the individual component sectors has been mixed, with strong double-digit job growth in electromedical equipment production and analytical lab instruments and above-average growth in medical and surgical instrument manufacturing offset by slower growth in other sectors.
Based in part on U.S. Bureau of Labor statistics and data from the TEConomy/BIO report, Business Facilities ranked California, Minnesota, and Massachusetts as the top 3 states for Medtech/Medical Devices. Employment growth, employment concentration, and a specialized concentration of jobs was taken into account.
Rounding out this ranking are: Connecticut, Ohio, Indiana, Florida, Wisconsin, Utah, and Puerto Rico.
Digital Infrastructure & Broadband Access
Internet connectivity, that is reliable and affordable, is being heralded as a basic right and when it comes to economic development, building a modern broadband infrastructure is one factor that can help level the playing field. Rural locations may be among those areas that do not have a dependable system in place. Private industry infrastructure companies are building out resources, but the federal government stepped in with the Broadband Equity and Access Deployment program (BEAD), created out of the Infrastructure Investment and Jobs Act (IIJA) which was signed into law in late 2021.
BEAD is a $42 billion federal grant program intended to bring broadband to all Americans by funding partnerships between states or territories, communities, and stakeholders to build the infrastructure where needed and increase high-speed internet. The program prioritizes unserved locations with no internet access or underserved locations, with low speed internet. The progress will be in the form of funding planning, infrastructure deployment and adoption programs in all 50 states, Washington D.C., Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands.
In June 2023, President Biden announced the allocation to individual states of broadband infrastructure funds under the BEAD Program. Each state has six months to submit an initial proposal to the National Telecommunications and Information Association (NTIA), which is administering the BEAD Program, outlining how they intend to bring reliable, affordable broadband connection to their residents and how they will award funds to subgrantees to achieve their broadband priorities.
In Business Facilities’ ranking of states for their level of Broadband Access was chosen before the June news. The top state is Maryland, followed by New Jersey, New York, and Delaware. This was based in part on the FCC Broadband Map, introduced online by the Federal Communications Commission in late 2022. The map displays where Internet services are available across the United States, as reported by Internet Service Providers (ISPs) to the FCC. The map will be updated continuously to improve its accuracy through a combination of FCC verification efforts, new data from Internet providers, updates to the location data, and information from the public.
On Location: Film & Television
Entertainment is big business, and the film and television industry is steadily making its mark in economic development. Film and television production operations, and related work such as digital media, create jobs and stimulate local economies in numerous other ways.