The honeymoon is clearly over between the state of California and business. A recent survey conducted by Chief Executive magazine rated Texas as the friendliest US state for business. California ranked 50th.
I'll admit that was kind of shocking. Silicon Valley is still the gold standard for technology development. Though the magazine's survey was not technology-specific, some of the state's shortcomings hit technology in the heart.
Each year, the evidence that businesses are leaving California or avoid locating there because of the high cost of doing business due to excessive state taxes and stringent regulations grows… According to Spectrum Locations Consultants, 254 California companies moved some or all of their work and jobs out of state in 2011, an increase of 26 percent over the previous year and five times as many as in 2009.
California does love its regulations, and its intentions are always good. The California Transparency in Supply Chains Act and the proposed regulation changes by the California Department of Toxic Substance Control (DTSC) are aimed at making working conditions and the environment better. But Michael Kirschner, principal at Design Chain Associates, has urged us to take a look at what it takes to comply with the DTSC proposal. (See: Tracking Calif. Consumer Products Proposal.)
What is Texas doing right?
“Texas, by contrast, has been welcoming companies and entrepreneurs, particularly in the high-tech arena,” J.P. Donlon, editor-in-chief of Chief Executive magazine and ChiefExecutive.net, said in a press release. “Local economic development corporations, as well as the state Texas Enterprise Fund, are providing attractive incentives. This, along with the relaxed regulatory environment and supportive State Department of Commerce, adds up to a favorable climate for business.”
Florida, North Carolina, Tennessee, and Indiana rounded out the top five. New York, Illinois, Massachusetts, and Michigan joined California at the bottom of the list.