There is nothing quite like a couple trillion dollars in federal money to get companies and states focused on infrastructure.
Landmark programs including the CHIPS and Science Act, the Inflation Reduction Act, and the Bipartisan Infrastructure Law each include hundreds of billions of dollars to revitalize domestic manufacturing and to secure supply chains.
Plus, global turmoil and the Covid-19 pandemic have reminded companies about the importance of keeping production close to home and accessible.
“When you’ve got all those variables combined — the federal money, the mitigation of risk, and reshoring, moving production capacity away from abroad and moving it back to the United States— it has created a situation where you’ve got a lot of companies vying for a limited amount of sites in the U.S.,” said Seth Martindale, Chairman of the Site Selectors Guild, the industry trade group for corporate location consultants.
Which states are winning the battle over infrastructure — and everything else that makes a state great for business? America’s Top States for Business 2024, CNBC’s 17th annual study on state competitiveness, is here to find out.
Our time-tested methodology, first developed in 2007, rates the states in ten categories of competitiveness — weighted each year based on how frequently they appear as selling points in state economic development marketing.
This year, states are touting their infrastructure like never before. So, for the first time in 2024, Infrastructure is the heaviest-weighted category in our study. The category considers not only roads, bridges, ports and airports, but also broadband, utilities, and sustainability. New in 2024, the category includes shovel-ready development sites and state-sponsored site readiness programs.
“Most companies are looking to move quickly, especially in the current environment,” Martindale said. “A company knows that if you have a site that is pad-ready, and you can just walk into that site and start building almost immediately, that cuts down on your time to actually deliver the capacity of what it is that you’re trying to do.”
Workers walk with U.S. President Joe Biden, after he delivered remarks during a visit to the Intel Ocotillo Campus, in Chandler, Arizona, U.S., March 20, 2024.
Kevin Lamarque | Reuters
The Site Selectors Guild supplied some of the data on site readiness for this year’s CNBC study.
Workforce, which had been the top category since 2014, remains crucial. But, with roughly 1.8 million fewer job openings nationwide compared to a year ago, according to Labor Department data, the worker shortages that fueled the war for talent in recent years have eased, if only slightly.
Other categories increasing in importance in 2024 include Business Friendliness — all those companies looking to build new facilities are searching for the path of least regulatory resistance — and Access to Capital, with inflation and interest rates still stubbornly high.
AI a new factor in Top States for Business
The 2024 CNBC study also reflects the incredibly dynamic nature of American business.
For the first time, America’s Top States for Business delves into the world of artificial intelligence. Which states are innovating — and hiring — in the fast-growing sector?
“The state that’s actually investing and allowing for people to go either into industry or into government to be able to help make a difference is the state that I think is going to succeed,” said Russell Wald, Deputy Director of the Institute for Human-Centered Artificial Intelligence at Stanford University, which is supplying some of the data for this year’s Top States study.
New metrics in the Technology and Innovation category look at where new AI models are being developed, and where the AI jobs are. And the Business Friendliness category considers which states are leading the way in developing a regulatory framework to allow AI to thrive.
“What businesses want in terms of regulation is some degree of coherence, and how to be able to understand whether they’re on the same playing field or not,” Wald said.
Climate risk and the states
Sustainability and climate risk have been factors in the CNBC study for some time. But in 2024, the economic impact is more profound than ever, said Jeremy Porter, Head of Climate Implications at First Street Foundation, a nonpartisan, nonprofit research organization that supplied some of the risk data for this year’s study.
“I think climate risk, over the next 20 to 30 years, is going to make its way into all communities across the country,” he said. “Whether it’s individuals making decisions about where to live, companies making decisions about where to locate and have their operations, supply chain analytics, all are going to start to incorporate climate change. So, it’s making its way into all facets of our economy.”
Climate risk has already helped set off a growing insurance crisis, as carriers raise homeowner and business premiums, and leave some states altogether. The effect varies from state to state, which we consider in our Cost of Doing Business and Cost of Living categories.
And our Economy and Access to Capital categories factor in foreign direct investment. Which states are the rest of the world betting on?
Other categories include Quality of Life — where can employees be safe, secure, healthy, and enjoy the most freedom? And Education — which states are most effectively turning out the next generation of skilled workers and business leaders?
Watch CNBC’s Top States section over the next month for a lot more about competitiveness as we put the finishing touches on this year’s rankings. As always, we want to hear from you on social media, using the hashtag #TopStates.