The Tar Heel State has always been a contender in CNBC’s annual competitiveness rankings, rarely finishing outside the top 10 since the study began in 2007. The state finished a close second last year. But 2022 is the first year he managed to climb to the top. What made the difference this year? First, state leaders continue to manage to put aside their deep political divisions to stimulate business and the economy. North Carolina Governor Roy Cooper speaks to the crowd during an election night event for Democratic Senate candidate Cheri Beasley on May 17, 2022 in Raleigh, North Carolina. Sean Rayford | Getty Images When Democratic Gov. Roy Cooper signed a deal in March with Vietnamese electric vehicle maker VinFast to build a $2 billion plant in the state, state Senate President Phil Berger and House Speaker Tim Moore, both Republicans, were close. The three had worked together, across party lines, to craft a $1.2 billion stimulus package that sealed the deal. “VinFast’s commitment to North Carolina solidifies our position as a global leader in driving innovation and supporting business,” Berger said that day. It wasn’t the first time the trio had collaborated to create a transformative arrangement. Last year, Apple announced it would build its first East Coast hub in the state’s Research Triangle area in exchange for up to $846 million in incentives. “That’s what happens when we work together. That’s what happens when people with different viewpoints, different thought processes, come together,” Moore said at the event announcing the deal in April 2021. The North Carolina Great Seal is seen outside the state legislature building in Raleigh, NC Al Drago | Cq-roll Call, Inc. | Getty Images “We had a tough election in 2020,” Cooper said that day. “They tried to get rid of me, I tried to get rid of them. We ended up the way we were. And I think we looked at each other and said, ‘This is what the people of North Carolina voted for.’ We have to work together to get positive results for our state.” Sure enough, last fall, Cooper and the General Assembly finally came together to pass a two-year state budget — the first comprehensive spending plan since Cooper took office in 2017. This month, Democrats and Republicans met again to tweak the second budget year, which the governor signed into law Monday. Both sides have said they are close to a deal on Medicaid expansion, a bone of contention for as long as Cooper has been in office. “Divided government is working in North Carolina,” Alexander H. Jones wrote on the Politics North Carolina blog in April, citing the stimulus and budget deals as proof. “Cooper and the Republicans worked hand in glove.”
More coverage of America’s top states for business in 2022
Indeed, North Carolina’s solid finances are the cornerstone of the nation’s top economy, as measured by the CNBC study. The state’s creditworthiness is pristine. its fiscal balance is healthy. Economic growth, at 6.7 percent last year, and employment growth at 3.6 percent were among the strongest in the country, according to government statistics. But that’s just the beginning of North Carolina’s power. The state ranks No. 2, behind only California, for access to capital. Having the nation’s second and sixth largest banks based in Charlotte (Bank of America and Truist Financial, respectively) provides an advantage of sorts. But North Carolina companies also attracted about $3.5 billion in venture capital investment last year, the sixth-highest in the nation, according to the National Venture Capital Association. And the state’s business grant and loan programs have been given new life under the state’s bipartisan truce. In Technology and Innovation, the home of the famed Research Triangle Park finishes at No. 5. North Carolina institutions are among the top recipients of National Science Foundation and National Institutes of Health research funding, and the state ranks high for cryptocurrency mining , a new factor in this year’s ranking. Dale Earnhardt Jr, driver of the #88 Hellmann’s Fridge Hunters Chevrolet, looks on during practice for the NASCAR Xfinity Series Call 811 Before You Dig 250 powered by Call 811.com at Martinsville Speedway on April 7, 2022 in Martinsville, Virginia . Jared C. Tilton | Getty Images And North Carolina ranks No. 12 for the workforce. That’s a key feature for NASCAR driver and NBC Sports analyst Dale Earnhardt Jr., who also owns a small business that employs 140 people at Mooresville-based JR Motorsports. “It’s easy for us to get some of the most talented people to work for our business,” he said. “We can’t win without great people. North Carolina gives us that opportunity.”
Where North Carolina falls short
No state is perfect, however. North Carolina is ranked No. 28 for Livability, Health and Inclusion. The state long ago backed away from the controversial “bathroom bill” known as HB2 after heavy criticism from businesses. In 2017, lawmakers agreed to repeal provisions of the law that require people to use restrooms that match the gender on their birth certificate. The rest of the law expired in 2020. However, North Carolina remains one of five states without a law protecting non-disabled residents from discrimination, according to the National Conference of State Legislatures. The state also lags on two other important measures of Life, Health and Inclusion: per capita public health spending and hospital resources. Both are among the many areas where North Carolina’s explosive growth is straining resources.
Employees weigh heavily in ratings
The CNBC study measures all 50 states in 10 competitiveness categories, for a total of 2,500 possible points. North Carolina earns 1,580 points to capture this year’s crown. Our methodology assigns a weight to each category based on how often states report it as a point of sale. In 2022, the Labor category bears by far the greatest burden, with workers in dire shortage. We’ve also revamped the category, measuring things like industry-recognized skills, as companies look for states with a ready pipeline of the kind of workers they need. Drone Aerial of Downtown Charlotte, North Carolina, NC, USA on the skyline. Kruck20 | Istock | Getty Images “There’s a strong need for people who have the ability to not only work with their hands, but then deal with that across technology,” said Tom Stringer, managing director of the national site selection practice at BDO in New York. Here are all of this year’s categories and point totals:
Labor force: 410 points (16%) Infrastructure: 380 points (15%) Cost of doing business: 345 points (14%) Economy: 325 points (13%) Life, Health & Integration: 325 points (13%) Technology & Innovation: 250 points (10%) Business friendliness: 200 points (8%) Education: 165 points (7%) Access to capital: 50 points (2%) Cost of living: 50 points (2%)
The runners-up
This year’s runner-up is Washington. The Evergreen State won top honors in 2017 and became a consistent contender after that, but fell out of the top five last year when the study put more emphasis on business costs as the Covid pandemic waned. The renewed focus on Workforce 2022 plays to Washington’s strengths. No state has a greater concentration of STEM (science, technology, engineering and math) workers. One in 10 workers in Washington makes a living in these basic occupations, according to the U.S. Bureau of Labor Statistics. However, costs remain high in the state, leaving companies and families particularly vulnerable to inflation. Virginia finishes Tuesday. The Old Dominion became the first back-to-back Top State for Business in 2021 thanks to the strength of its education system and workforce. But net migration to the state among college-educated workers has slowed, according to Census data, hurting the commonwealth’s Labor Force rankings. Denver, Colorado Walter Bibikow | Getty Images Colorado finishes No. 4 with America’s top workforce strength as measured by the CNBC study. Nearly 42% of workers in the Centennial State hold a bachelor’s degree or higher, according to the Census Bureau, making Colorado’s workforce the second most educated in the state (after Massachusetts). But those workers command some of the highest wages in the country, hurting the state’s ranking on the Cost of Doing Business. Texas completes the top five. The Lone Star State maintains its perfect record — it has never finished outside the top five, a feat unmatched by any other state. Not only is Texas’ workforce great, but it’s also growing rapidly as companies and people flock to the state. When they arrive, however, they find a growing set of issues. For companies, Texas has an increasingly bloated regulatory regime, according to researchers at George Mason University. This hurts the state’s business-friendliness ranking. Residents, meanwhile, have limited options for childcare. Health care resources are also stretched in the state with the highest percentage of people without health insurance. Texas is another one of five states that does not have an anti-discrimination law for non-disabled residents. And it further erodes inclusiveness under Republican Gov. Greg Abbott. While many measures targeting transgender youth and their parents have either died in the legislature or stalled in court, the deeply controversial election law that took effect this year has made Texas one of the most difficult states to vote in, researchers say at Northern Illinois University. Put it all together, and Texas finishes at No. 49 for Liveability, Health and Inclusion, dragging down its overall ranking. The state’s many other strengths keep it in the top five, just 4 points behind No. 6 Tennessee.
State movers and shakers
Allard Schager |…
