Small Business Survival Index 2008: Ranking the States

Today (December 9), the Small Business & Entrepreneurship Council (SBE Council) released its 13th annual rankings of the states according to their public policy climates for small business and entrepreneurship in the "Small Business Survival Index 2008: Ranking the Policy Environment for Entrepreneurship Across the Nation."

SBE Council chief economist Raymond J. Keating, author of the study, said: "The U.S. economy is in a serious downturn, and the outlook for a robust recovery seems remote. That means state and local policymakers face some very difficult decisions, especially on budget matters. Depending on the policy course that state lawmakers choose, they can either make the economic situation in their own state better or far worse."

Keating continued: "A significant impediment to small business, entrepreneurship and investment is public policy gone awry. Quite often, policies have unintended consequences for small businesses when they raise costs, create uncertainty and diminish incentives for starting up, investing in and building a business. On the other hand, positive policies can be advanced that enable small business growth, job creation and entrepreneurship. The ‘Small Business Survival Index' measures these policy actions."

The "Small Business Survival Index" serves as the most comprehensive measure of the states in terms of which ones offer the most conducive environment for small businesses, and those that make it more difficult for entrepreneurs from a government-cost perspective. The factors included in the Index - taxes, various regulatory costs, government spending, property rights, health care and energy costs, and much more - matter a great deal to the competitiveness of each state and to the well being of small business.

The 2008 Index has been expanded to cover 34 major government-imposed or government-related costs affecting small businesses and entrepreneurs. The measures are added together for an overall rating.

In terms of their policy environments, the most entrepreneur-friendly states under the "Small Business Survival Index 2008" are: 1) South Dakota, 2) Nevada, 3) Wyoming, 4) Florida, 5) Washington, 6) Texas, 7) South Carolina, 8) Alabama, 9) Virginia, and 10) Colorado. The more difficult state policy environments for entrepreneurs include: 40) West Virginia, 41) Hawaii, 42) Iowa, 43) Vermont, 44) Massachusetts, 45) New York, 46) Minnesota, 47) Rhode Island, 48) Maine, 49) California, 50) New Jersey and 51) District of Columbia.