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2020 Top States for Doing Business Showcase Their Pro-Business Environments

Despite changes brought by the COVID-19 pandemic, the states across the South seem to have all their ducks in a row when it comes to attracting business.

Q3 2020
It would be easy to look at current economic statistics and conclude that we may as well remove words such as “business growth” and “expansion” from our collective vocabularies for the time being. On a macro level, the economy is anything but healthy, thanks to the coronavirus. And yet there are plenty of individual businesses that continue to expand or relocate to desirable places.

The question of which states are the best for doing business is as valid a question as ever. Our roster of location experts knows the answers, from years of experience helping to guide site decisions and negotiate favorable deals. As we do each year, Area Development surveyed them about the specific location considerations that matter most in corporate decision-making, and which states stand out in each of those categories.

What we learned is that, even amid the earth-shattering change the current pandemic has wrought, there are important things that have not changed. States across the South continue to have their ducks in a row when it comes to making themselves attractive to businesses. They remain well-prepared for creating positive business headlines — they’re doing so now and will continue to do so as the economy regains its liveliness.


  1. 1. Georgia
  2. 2. Tennessee
  3. 3. South Carolina
  4. 4. Texas
  5. 5. North Carolina
  6. 6. Alabama
  7. 7. Indiana
  8. 8. Virginia
  9. 9. Ohio
  10. 10. Florida
  11. 11. Mississippi
  12. 12. Louisiana
  13. 13. Utah
  14. 14. Arizona
  15. 15. Kentucky
  16. 16. Michigan
  17. 17. Missouri
  18. 18. Oklahoma
  19. 19. New York
  20. 20. Illinois

Individual Categories

Overall Cost of Doing Business

  1. 1. Georgia
  2. 2. Texas
  3. 3. Tennessee
  4. 4. South Carolina
  5. 5T. Indiana
  6. 5T. North Carolina
  7. 7T. Alabama
  8. 7T. Mississippi
  9. 9. Utah
  10. 10. Virginia

Business Incentives Programs

  1. 1. Georgia
  2. 2. South Carolina
  3. 3. Tennessee
  4. 4T. Alabama
  5. 4T. Mississippi
  6. 6. Texas
  7. 7. Virginia
  8. 8T. Ohio
  9. 8T. Louisiana
  10. 8T. North Carolina

Access to Capital & Project Funding

  1. 1T. New York
  2. 1T. California
  3. 3. Texas
  4. 4. Massachusetts
  5. 5T. Georgia
  6. 5T. Illinois
  7. 7T. North Carolina
  8. 7T. Florida
  9. 9. Ohio
  10. 10. Colorado

Competitive Labor Environment

  1. 1. Georgia
  2. 2. North Carolina
  3. 3T. Tennessee
  4. 3T. Texas
  5. 5. Indiana
  6. 6. Alabama
  7. 7T. South Carolina
  8. 7T. Utah
  9. 9. Virginia
  10. 10. Ohio

Workforce Training Programs

  1. 1. Georgia
  2. 2. Louisiana
  3. 3. Alabama
  4. 4T. Virginia
  5. 4T. South Carolina
  6. 6T. Tennessee
  7. 6T. North Carolina
  8. 8. Ohio
  9. 9T. Kentucky
  10. 9T. Indiana

Energy Availability & Costs

  1. 1T. Georgia
  2. 1T. Tennessee
  3. 3. North Carolina
  4. 4. Texas
  5. 5.
  6. 6T. Alabama
  7. 6T. South Carolina
  8. 8T. Indiana
  9. 8T. Mississippi
  10. 8T. Louisiana
  11. 8T. Kentucky

Logistics & Infrastructure

  1. 1. Georgia
  2. 2. Texas
  3. 3. Tennessee
  4. 4. Indiana
  5. 5. Ohio
  6. 6T. South Carolina
  7. 6T. Virginia
  8. 8T. Florida
  9. 8T. Illinois
  10. 10. Missouri

Site-Readiness Programs

  1. 1. Tennessee
  2. 2. Georgia
  3. 3. North Carolina
  4. 4. South Carolina
  5. 5. Indiana
  6. 6. Alabama
  7. 7T. Virginia
  8. 7T. Ohio
  9. 7T. Michigan
  10. 10. Texas

Available Real Estate

  1. 1. Georgia
  2. 2. Texas
  3. 3. Tennessee
  4. 4. North Carolina
  5. 5T. Alabama
  6. 5T. Indiana
  7. 5T. Ohio
  8. 8. South Carolina
  9. 9T. Florida
  10. 9T. Mississippi

Cooperative & Responsive State Government

  1. 1. Georgia
  2. 2. South Carolina
  3. 3. Tennessee
  4. 4. North Carolina
  5. 5. Indiana
  6. 6T. Alabama
  7. 6T. Virginia
  8. 8. Mississippi
  9. 9T. Texas
  10. 9T. Arizona

Corporate Tax Structure

  1. 1. Florida
  2. 2. Texas
  3. 3. Tennessee
  4. 4. Georgia
  5. 5. Nevada
  6. 6. South Dakota
  7. 7. North Carolina
  8. 8. South Carolina
  9. 9T. Indiana
  10. 9T. Ohio

Favorable Regulatory Environment

  1. 1. Georgia
  2. 2T. Tennessee
  3. 2T. South Carolina
  4. 4. Texas
  5. 5. Alabama
  6. 6. Indiana
  7. 7. North Carolina
  8. 8. Mississippi
  9. 9T. Virginia
  10. 9T. Louisiana

Speed of Project Permitting

  1. 1. Georgia
  2. 2. Alabama
  3. 3. South Carolina
  4. 4. Tennessee
  5. 5. Mississippi
  6. 6. Louisiana
  7. 7T. Texas
  8. 7T. Indiana
  9. 9. North Carolina
  10. 10T. Virginia
  11. 10T. Utah
  12. 10T. Arizona
  13. 10T. Missouri
Before saying “the envelopes, please…,” it’s worth mentioning that these kudos are valid observations but also generalities that need a caveat. It may be hard to go wrong with a site in one of these top states, but every business has unique and individual needs — so the absolute best choice for a particular project could well be in a place that’s not on these lists. It’s all in the details.

The big overall headline is, indeed, what has not changed. The top three states for 2020 are the same as they were in 2019. Georgia, Tennessee, and South Carolina — same states and same order. That’s the seventh consecutive win for Georgia. Texas, North Carolina, and Alabama placed fourth, fifth and sixth this year — and that same trio placed sixth, fifth, and fourth, respectively, last year. And as one might guess, states that are at the top of the overall rankings will be found at or near the top in the assessments of the individual categories below.

Overall Cost of Doing Business
This is a great place to start a conversation on best states for doing business, because a place where the bottom line doesn’t add up simply isn’t going to work. Georgia is tops in this department, helping solidify its case as the overall winner for 2020. Like a lot of winners, the state is not content to rest on past success, and its legislative leaders have continued to focus on how to make low costs even lower.

Last year’s runner up, Texas, is runner-up again this year in this category, continuing to benefit from a favorable tax environment and generous incentives. Tennessee was first last year and is third this year, a reflection of the hot competition to drive down business costs.

Of course, there’s a lot that goes into the overall cost of doing business, and the mix of factors that best serves one company will be different from what is appealing to another. That’s why some of the categories below get a bit more specific about factors that impact overall cost.

Business Incentive Programs
Georgia also ranks highest this year in business incentive programs, which can have a significant impact on the cost of doing business by reducing both startup and operational costs. It earned its spot with a menu that includes tax credits for job creation, plus credits for R&D investments, using its ports, and expanding operations.

South Carolina is a perennial leader in incentives. Though it drops to second this year, its incentive list continues to be generous, rewarding job creation, investments in economic impact zones, doing research, and operating corporate headquarters, among many others. Tennessee ranks third, and as always, this list tilts heavily toward the South.

Access to Capital and Project Funding
There’s no more prominent financial center than New York, and no place that relies more on venture capital investment than California, so it’s no surprise that these two states perennially hit the top of this list. Massachusetts, also one of the hottest places for VC, is fourth, and third-place is owned by Texas, where generous incentives and special programs make project funding a relative cinch. Tied for fifth place in this category are Georgia and Illinois.

Competitive Labor Market
Georgia, North Carolina, Tennessee, and Texas were leaders last year in labor, and they are again in this year’s list. Indiana lands the fifth-place spot for 2020. All happen to be right-to-work states, and they also have an appealing combination of educational opportunities and qualify-of-life attributes that together encourage a well-educated, eager workforce.

Tennessee, in fact, ranks fifth in population growth among the sought-after millennial workforce, according to a U.S.News report, and North Carolina is eighth. Interestingly, Utah, which is tied for seventh in this category, is first for growth of its young workforce according to U.S.News.

As cities, some of the most attractive places for millennials are in these top states — Austin, Nashville, Raleigh, Dallas, Charlotte, Atlanta, Indianapolis, Houston, Memphis, and Salt Lake City. Of course, the mix of factors that best serves one company will be different from what is appealing to another.

Workforce Training Programs
The pandemic has created massive upheaval in employment, and as the nation recovers, it’s likely that many workers will wind up in different places or even entirely different occupations. A key to recovery is the ability to get workers trained or retrained quickly and efficiently — something that has always been important, and now is more so than ever.

Georgia ranks first in this category, and its Quick Start program has years of experience creating customized job-training programs that are free to qualified companies. Linked to the Technical College System of Georgia, the program is so highly regarded that a number of other states have used it as a model.

Second in this category is Louisiana, which a dozen years ago launched its FastStart program that aims to ensure workers are ready from the first day on the job at a new or expanding facility. AIDT is a state agency that’s in the business of recruiting and training workers for new and expanding employers in the third-place state of Alabama.

Tied for fourth in this category are Virginia, with its Virginia Talent Accelerator Program offering company-specific recruitment and training services, and South Carolina, home of the well-regarded readySC program with recruiting, assessment, training development, management, and implementation services.

Energy Availability and Costs
Depending on the company, the cost and availability of energy can be a make-or-break aspect of a site choice and is certainly a key component of the overall cost of doing business. Tied for the top spot in this category are Georgia and Tennessee. An abundance of hydropower helps keep rates lower in Tennessee — it’s among the leading hydropower states east of the Rocky Mountains.

Washington, in the fifth spot in this category, is even bigger in hydropower, producing nearly a third of America’s supply of that particular renewable resource.

Meanwhile, third-place North Carolina is near the top in production of nuclear power. And fourth-place Texas is a major player in wind power.

Logistics and Infrastructure
For companies making supplies and products that need to safely and confidently arrive at their destination, the quality of infrastructure and logistics capabilities are of significant importance. In top-ranked Georgia, for example, the job is accomplished by a solid mix of highway infrastructure, deepwater port facilities, and the world’s busiest passenger airport in Atlanta. Texas weighs in with the lengthiest collection of freight rail and public roads of any state, and nearly a dozen deepwater ports, including the busy port of Houston.

How will prospects feel about the cooperative nature of government leaders/programs, regulators, and tax collectors? The states ranked third and fourth in this category, Tennessee and Indiana, claim the biggest and second-biggest FedEx airport hubs among their logistics and infrastructure assets. Memphis is the nation’s number-one airport in terms of cargo handled. Indiana took the top slot in a recent CNBC ranking of infrastructure, aided by highway and rail assets, ports, and a central location. Ranked fifth in this category, Ohio, has similar location and infrastructure advantages as its neighbor and was also near the top of the CNBC review, as were Tennessee and Georgia.

Site-Readiness Programs
Your organization may come across a nice piece of open land in just the right location. But is it available for development and, even more important, ready to roll? That readiness can be a deal-maker or a deal-breaker. Tennessee responds with a handy, easily searchable database listing dozens of certified sites, along with ongoing efforts to prepare additional sites for project-readiness, and was ranked first in this category.

Georgia, in the number-two spot, counters with its GRAD Certified Sites program. Short for Georgia Ready for Accelerated Development, the program has more than five dozen industrial certified sites that have all the due diligence already completed and are prepared for fast-track construction. Similar programs in many states offer pre-vetted sites, and our survey respondents were particularly impressed with the offerings in the Carolinas and Indiana.
Methodology for 2020 Top States for Doing Business

Our 2020 Top States for Doing Business rankings reflect the results of our recent survey asking leading consultants to industry to give us their top state picks in 13 categories that impact companies’ location and facility plans. The states in each category were ranked based on their number of mentions in the particular category, and total mentions in all 13 categories were calculated to rank the top 20 states overall.

Available Real Estate
Site readiness is important for eager, expanding businesses. But initially, there needs to be ideal and available real estate.

The consultants who responded found Georgia to have an especially attractive inventory of available real estate. They also spotlighted good prospects in Texas, Tennessee, and North Carolina. Tied for fifth place in this category are Alabama, Indiana, and Ohio.

Cooperative and Responsive State Government
We wind up this detailed exploration of Top States for Doing Business with a look at four interrelated categories that essentially have to do with the welcome mat states have put out. Just how will prospects feel about the cooperative nature of government leaders and programs, regulators, and tax collectors? The answer starts with a handshake — or maybe an elbow-bump in a post-pandemic world — but that has to be backed up by actions that include assistance with location selection, local introductions and approvals, and the crafting of programs for incentives and training.

The responding consultants generally have found the most cooperative and responsive state governments in the Southern States, led by Georgia, South Carolina, Tennessee, and North Carolina. They are attracted by what people in Indiana call Hoosier Hospitality, which is reflected in the state government. But then the list heads southward again, visiting Alabama, Virginia, Mississippi, and Texas before landing out West to Arizona.

Corporate Tax Structure
Florida tops the list in this category by saying “no” to a lot of pesky taxes. For certain kinds of corporate structures, there’s no corporate income tax at all. There’s no state-level property tax, no property tax on business inventories, and no corporate franchise tax on capital stock. “No” on a lot of other taxes too — and also no state personal income tax.

Texas, in the second spot, also says “no” to some significant taxes, including corporate and personal income tax. The respondents also find the corporate tax structure advantageous in Tennessee, Georgia, and Nevada, to round out the top five.

Favorable Regulatory Environment
There’s also the issue of “red tape,” or the absence thereof. Regulatory hassles can make a great location decision turn sour, and site consultants will tell you the Southern States are where you’re least likely to encounter that bad taste.

Indeed, the top 10 states for favorable regulatory environment are all in the southern part of the country, with the lone exception of Indiana, in the sixth spot. In all of these states, an economic development prospect can expect an easier-than-average experience dealing with environmental regulations, zoning matters, workplace safety authorities, and other potential roadblocks.

Speed of Permitting
Of course, regulatory matters are a fact of life throughout the lifespan of a business operation, but they make their first appearance before a shovel hits the dirt. If the permitting process moves at a snail’s pace, the benefits of business expansion get stuck in the mud.

Again, states in the South have a leg up in this vital out-of-the-gate aspect of development. Georgia leads the pack, followed by Alabama, South Carolina, Tennessee, and Mississippi. That said, the top 10 list suggests that a commitment to speedy permitting can be found outside the usual spots in the South — Indiana, Utah, Arizona, and Missouri also earn recognition from the consultants responding to our survey.

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