Are certainty and predictability the same thing? They’re very close. One of our two Top Business Climate Ranking states, Georgia, credits the former in large part for its win. The other, North Carolina, went with the latter. Both are making essentially the same point: Businesses want these qualities in the locations they are scrutinizing for capital investment projects, particularly in a pandemic-induced economic downturn. We can quantify annual college graduates, professional certificates in a geographic area, land costs, miles to the nearest deepwater port, energy reliability, average wage and any number of other location ingredients.
Certainty and predictability, you feel in your bones.
That’s why this ranking of state business climates is so important. Fifty percent of the ranking, remember, is based on what site selectors say are their best states for business. And it’s why the commissioners of economic development in the winning states made sure to stress the importance of these qualities when asked what their capital investors are telling them. The same can be said of the several other Southeast states that rank in the Top 10 — and of states outside the region, like Ohio and Arizona, that did as well. Congratulations to all top finishers in this gauge of state business climates.
This issue also features a sound — and editorially defensible — ranking of top free trade zones in the U.S. and abroad. That’s hard to do, but our uber-researcher and managing editor Adam Bruns and our director of programming & analytics Daniel Boyer pulled it off. These locations and the states with go-to business climates are good clues about where to go with capital investment when the economic climate turns inclement. The pandemic won’t last forever, but it’s consumed most of 2020. A recovery is on the horizon, but how will that be affected by the recent election? Investment will continue, even in areas like Hong Kong and Thailand that are seeing spikes of unrest. CapEx projects are long term, so the location umbrella needs to be big enough to shelter corporate investors from a wide variety of unforeseen developments, or black swans.
I cringe reminding you that every cloud has a silver lining. But it’s pretty cloudy out there right now and may be for some time. This is the first Business Climate Ranking report that includes so many comments from survey respondents participating in formulating the ranking. Take it from them, not me, as to what they are looking for in a strong and safe investment destination. (The COVID-19 question responses are particularly telling.) You’re probably looking for much the same thing. And your location options may or may not come with a silver lining.
Till next time,
Mark Arend, Editor in Chief