U.S. Chamber study ranks states’ economic performance


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The fourth annual Enterprising States study, commissioned by the U.S. Chamber of Commerce Foundation and prepared by Praxis Strategy Group, was unveiled April 28 at the U.S. Chamber’s Small Business Summit.
“Small business is already leading the recovery, but with the right policies we can move past the recovery stage and on to revitalization,” said U.S. Chamber President and CEO Thomas J. Donohue. “We need more policies like those outlined in the Enterprising States study to drive stronger growth, competition, and success among small businesses across the country. When these businesses succeed, America succeeds.”
The 2013 Enterprising States study measures state performance overall and across five policy areas important for job growth and economic prosperity — exports and international trade; entrepreneurship and innovation; business climate; talent pipeline; and infrastructure. In addition, the study highlights a number of specific policies and programs that many states are implementing, often in cooperation with local and regional economic development organizations, to encourage entrepreneurship and support business development and expansion.
Every state has policies and programs that are intended to encourage entrepreneurship and support small business development and expansion. Many states have introduced legislation or established programs to focus on startup companies, and have bolstered policies targeted at helping existing businesses grow and expand their markets.
According to the chamber’s study, state funding of programs for entrepreneurial development is estimated to have increased by 30 percent between 2012 and 2013. During a panel discussion at the Small Business Summit, governors Paul LePage of Maine, Tom Corbett of Pennsylvania, and Scott Walker of Wisconsin discussed many of the initiatives they are implementing to create and expand small businesses.
“These governors recognize the importance of small businesses and are working to reform state policy to make growth and commerce easier for small business owners,” said U.S. Chamber Foundation President Margaret Spellings. “By offering fast-track access to financial resources and state services and searching for innovative ways to encourage job creation through the private sector, they are helping to grow and sustain the true driving force of the economy.”

U.S. Chamber’s findings,
Pennsylvania

According to the U.S. under Gov. Corbett, the Keystone State has made infrastructure improvement one of its economic growth priorities, an area in which the state ranks 43rd in this year’s report. In addition to working with state leaders to advocate for upgrades and expansion of the Port of Philadelphia, the governor launched a Transportation Funding Advisory Committee in 2011 to evaluate and identify infrastructure funding priorities and options. The committee’s work laid the foundation for new policy proposals to the 2013 Pennsylvania Legislature, recommending billions of dollars in new infrastructure funding targeted at relieving congestion and facilitating expanded economic activity.
Booming North Dakota leads the way again in overall economic performance, owing to the confluence of its energy boom, strong agricultural economy, and (perhaps surprisingly) well-educated young workforce. Two more energy-rich states, Wyoming and Oklahoma, also appear in the top 10. Texas offers the strongest economic momentum as the fastest growing large state. High-tech and innovation fuel growth in Virginia, Washington, Utah, and Maryland, while Louisiana bounces back strongly in the face of economic headwinds to rank eighth overall.
The top-performing states are determined by a normalized, weighted combination of the following measures:
* Ten-year job growth.
* Two-year job growth.
* Overall expansion of gross state product.
* Productivity: State output per job.
* Productivity growth: Growth in out
put per job.
* Income growth: Growth in per capita
personal income.
* Livability: Median income of four-
person household adjusted for state
cost of living.

Pennsylvania’s Exports
Rank: 30th
International trade supports 38 million American jobs today. One in three manufacturing jobs depends on exports, and one in three acres on American farms is planted for hungry consumers overseas. The global economy is dynamic and highly competitive, so getting serious about exports and trade can have meaningful long-term benefits for all Americans.
Ninety-eight percent of America’s exporters are small businesses from every state in the country, not large multinational corporations. A record 293,000 U.S. companies exported in 2010 (latest available data), and small and mid-sized firms continued to grow their share of overall U.S. exports to 34 percent in 2010, up from 27 percent in 2002.
While the number of small and mid-sized firms currently exporting grew 20 percent since 2000, just 1 percent of all small firms are exporters and of those 58.5 percent export to only one market. Of the small manufacturers that take orders from abroad, just 12 percent actively market their products or services in other countries. Small companies most often cite the trouble of locating sales leads as the biggest limiting factor to increasing exports. Increasing the number of small business exporters is a primary goal of most state export assistance and training programs.
The 10 export states were determined by a normalized, weighted index comprising four measures of export activity:
* Export Intensity: export activity as a share of gross state product.
* Growth in export intensity.
* Change in a state’s share of total national exports.
* Growth in overall gross exports since 2002.
* Only “manufactured exports” are included in the metrics, which excludes bulk commodities that are often attributed to the state of the port location Pennsylvania’s Innovation and
Entrepreneurship
Rank: 29th
The commonwealth’s Business Opportunity Fund helps minority-owned, women-owned, and other small businesses that might otherwise face difficulty accessing financing. By offering support to small businesses in underserved areas, the program helps businesses succeed and create jobs in regions that might otherwise go overlooked.

Pennsylvania’s Business Climate
Rank: 33rd
To increase collaboration between the public and private sectors, business and government leaders in Pennsylvania work together through the Team Pennsylvania Foundation. Co-chaired by the governor, the nonprofit public-private partnership identifies and advocates for policies and reforms that allow business and government to work in concert to unleash job creation. By facilitating networking, the organization has helped business and government find ways to work together to create a more business-friendly environment.

Pennsylvania’s Talent Pipeline
Rank: 36th
Pennsylvania is working to expand its workforce training efforts. The Keystone Works program, launched in late 2012, is designed to put unemployed Pennsylvanians back to work while increasing workforce supply in high-priority occupations. Under the program, unemployed workers can receive training from a business while still receiving their unemployment benefits. The business is not required to pay wages during the training, which gives it a chance to evaluate a potential employee in a professional setting. At the end of the training, businesses may hire the newly trained person and receive financial benefit for doing so, facilitating job creation.

Pennsylvania’s Infrastructure
Rank: 43rd
Infrastructure provides the critical foundation for state economies and commerce. Research by the U.S. Chamber’s Transportation Performance Index Project shows that infrastructure performance is directly related to economic growth. Recognizing this, many states are making strategic investments in the facilities and roads needed to move goods, such as the major investments to deepen ports on the Gulf and Atlantic Coasts to serve manufacturers in southeastern states.
Broadband data access is becoming an increasingly important factor to support state and regional economic performance. A 2012 Boston Consulting Group report found that the Internet accounted for 4.7 percent of all U.S. economic activity in 2010, more than the federal government.
The top infrastructure states are determined by a combination of four metrics weighed equally:
* Broadband capacity: share of households with 25-megabit download speed available
* Broadband availability: share of households with five or more providers available
* Road quality
* Share of bridges determined to be deficient or obsolete

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