Is high-tech business friendly?

Posted at 11:28 AM on January 18, 2011 by Bob Collins (5 Comments)
Filed under: Economy

Comparing business tax climate from state to state is a dicey proposition. Tax laws in each state are so different, sometimes a direct comparison is difficult. Today's report that Minnesota has to hustle to close a "high-tech" jobs gap, however certainly invites some comparison of "business-friendly" climate vs. high-tech economic activity.

The Tax Foundation annually releases this map, which names the best and worst "business tax climate." Minnesota annually appears as one of the 10 worst. 2011 is no exception. It comes in #43. Click the image for a larger version. The darker the color, the less business friendly, according to the Tax Foundation:

The Minnesota report on high-tech job growth uses data from the State New Economy Index.

Here's the overall scorecard. The darker the state's color, the higher the score:

There appears to be comparatively little association between "business friendly" and the overall score.

"Knowledge jobs" presents an even murkier picture. Several of the Tax Foundation's "best" states for business appear in the top 10. But so do several of the "worst," including Minnesota.

Ditto for jobs in information technology:

According to the report, issued in November, Massachusetts, Washington, Maryland, New Jersey and Connecticut "are the top five states at the forefront of the nation's movement toward a global, innovation-based new economy. On the business-friendly survey, that's #32, #11, #44, #48, and #47.

The bottom five states were unchanged from 2008. Mississippi and West Virginia have lagged most in making the transition to the New Economy, the report said. The other lowest-scoring states include, in reverse order, Arkansas, Alabama and Wyoming. On the business-friendly scale, in order, that's #21, #37. #39. #28, and #3.

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Comments (5)

I'd like to see a map that shows education related statistics, let's say how well students do on Math and Science tests and how that correlates, or doesn't, with the job numbers.

Posted by JackU | January 18, 2011 12:53 PM

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There is an education map at that link, but I don't know if it's based on math and science testing.

Posted by Bob Collins | January 18, 2011 1:19 PM

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How odd, the "bad states" are the ones I (with a PhD) can most easily get a job.

Posted by nt | January 18, 2011 3:27 PM

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How odd, the "bad states" are the ones in which I (with a Physics PhD) can most easily get a job.

Posted by nt | January 18, 2011 3:27 PM

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Thomas Lee tackled this topic for MedCity News last summer. His conclusion: High taxes don't always stunt economic growth, especially for biotech/high-tech. What matters most is not the rate of taxation but how those tax dollars are being spent. For example, states like Massachusetts, California and Kansas have poured public money into supporting research and start-ups. Minnesota, Lee says, hasn't done the same. Here's his piece:

http://www.medcitynews.com/2010/08/minnesotas-bioscience-community-benefits-little-from-states-high-taxes/

Posted by Dan Haugen | January 19, 2011 8:01 AM

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