To Create More Rhode Island Jobs the State Needs to Be More Business Friendly

In order to encourage new companies to any area, local governments must create an environment conducive to business. A variety of things can attract business owners to a particular city. Sometimes its an abundance of highly trained an educated residents; other times it’s laws passed by local officials. Some of the most enticing are tax breaks, low interest loans and property deals.

That being said, Rhode Island was once again ranked 45th in the nation as far as business friendliness goes, according to Forbes magazine’s 33rd annual Best States for Business list. Conditions unfavorable to encouraging new companies to the area may result in fewer new Rhode Island jobs or the loss of existing positions.

As far as growth prospects go, the state was 16th. The decision to give Rhode Island this rank was based on venture-capital investments and business openings. Other factors that were taken into consideration included predicted job growth, personal income and the state’s gross domestic product. Rhode Island was also 20th in the nation for quality of life to be had in the state.

The state’s economic climate received much loser scores. Rhode Island’s GDP was the 30th in the nation. The local labor force was decided to be the 35th in the U.S., based on education, net migration and projected population growth.

The cost of doing business in the area was considered to be some of the worst in the nation. High labor costs, energy expenses and taxes caused the state to be considered 42nd in the nation.

“Business costs are weight the most,” said Kurt Badenhausen in Forbes’ report. “But low costs were not enough to keep Louisiana and West Virgina from being the bottom two in our rankings.” He went on to explain that the company analyzed each state on 32 different points of data in order to compile the six main categories that determined each state’s rank.

In a final category, regulatory climate, Forbes rated the state 49th. This group of criteria included other factors that just legal and regulatory climate. The magazine also took into account transportation, bond ratings and business incentives--or the lack thereof.

Virginia was decided to be the best state for business in the country for the third consecutive year. It was followed by Utah, Washington, North Carolina and Georgia. All of these states are considered midsized, having populations that range from 2.6 million to under 10 million.

“The top five states were all closely bunched together,” wrote Badenhausen. “Georgia is the real story, moving from 15th to fifth place. Georgia finished in the Top 10 in four of the six categories we examined…Just two other state - Virginia and third-tanked Washington - managed this feat.”

The rest of 2008’s Top 10 were as follows: Colorado, Idaho, Florida, Texas and Nebraska.