Everett, Wash.
Published: Wednesday, July 18, 2007

Is Washington fifth best for business? It's arguable

Richard S. Davis

 According to the American Film Institute, "Citizen Kane" is the greatest American film of all time. I've watched it twice and don't understand the fuss. "The Godfather," which I enjoyed, came in second, followed by "Casablanca." AFI's list of the "100 Greatest" can provide hours of happy, if pointless, debate.

Baseball fans rank the best major league teams in history, with the 1927 Yankees generally getting the nod. Foodies list restaurants, while others rate symphony orchestras, novels, wine or rock songs. Whenever two or three come together, someone will try to put them in rank order. It's a way of imposing discipline on chaos and is not without merit.

Publishers love lists, because readers love lists. Bookstores carry books that contain nothing but lists, with clever names like "The Book of Lists," "The Top Ten of Everything," and "The Best Book of Lists Ever."

Forbes magazine has lots of lists. From the Forbes 400 Richest Americans to - and I just discovered this one today - The World's Top Earning Models. Check their Web site; the folks at Forbes rank everything.

If you're in the game at all - whatever game that is - you probably want to be on and near the top of the "best of ... " list. Last week our state cracked the big time on the Forbes second (presumably annual) list of Best States for Business, coming in fifth, up from 12th last year. Even better, in the brief article accompanying the ratings, Forbes said, "... Washington is the big story ... With a highly educated work force and a pro-business regulatory environment, Washington is poised to remain one of the best states to do business in. ..."

That would be nice. Of course, like the movie, restaurant and wine lists, these rankings combine objective measures with subjective evaluations. Forbes, for example, used six multi-factor indexes. Washington ranked 33rd on business costs, fourth on labor (education, availability), fifth on regulatory environment, 16th on economic climate, fourth in growth prospects, and 32nd in quality of life (schools, health, crime, cost of living, poverty).

While we might quibble about the components or the measures, the approach works at a flyover level. On the ground experiences will vary.

Others attempt to assess state business climates, too, and sometimes reach different conclusions. In January, the nonprofit Corporation for Enterprise Development issued a development report card for the states, giving Washington a B for performance, a D for business vitality, and an A for development capacity. CFED concludes "the climate in Washington for typical businesses remains unfavorable," though they applaud investments in education and research. None of the top five CFED states - Connecticut, Delaware, Colorado, Massachusetts and Minnesota - appears on the Forbes top five of Virginia, Utah, North Carolina, Texas and Washington.

And so it goes. Washington fails to make the top 25 states in Site Selection magazine's 2006 Business Climate rankings. Its top five are North Carolina, Texas, Ohio, Georgia and Tennessee.

The disparities reflect differences in values and measures, and should be expected, even welcomed. High tech industry groups tend to focus on education, tax incentives, and research and development funding. Manufacturers pay more attention to energy costs and land availability. Rather than thinking about a statewide business climate, policy makers and business owners have to consider the various microclimates that cluster geographically and by industry sector.

Gov. Chris Gregoire said the Forbes ranking meant "that Washington is moving in the right direction and that our state is a great place to do business, work and raise a family." Certainly, as marketer-in-chief, the governor should trumpet good news whenever possible. But even the generally glowing report suggests lingering competitiveness concerns for our state, particularly in costs and regulation. With paid family leave, climate change initiatives, a dramatic rise in state spending, and new health care regulation, the last session of the Legislature has put our desirable ranking at risk.

Political chatter following release of the rankings suggested that Forbes may have somehow altered the 2008 gubernatorial race. That's doubtful. The election's a long ways off. Besides, these lists never settle anything. At best, they just get the conversation started.

I still can't believe "The Maltese Falcon" didn't make AFI's top 10.

Richard S. Davis, vice president-communications of the Association of Washington Business, writes every other Wednesday. His columns do not necessarily reflect the views of AWB. Write Davis at richardd@awb.org or Association of Washington Business, P.O. Box 658, 1414 Cherry Street SE, Olympia, WA 98507-0658.
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