HARRISONBURG — On Wednesday, Virginia was named the top state for business in America by CNBC, a news business outlet, for the first time since 2011.
Good showings on business ranking lists contribute to economic development, said Frank Tamberrino, president and CEO of the Harrisonburg-Rockingham Chamber of Commerce.
Companies go through what’s called a site selection process when deciding where to conduct business, be it manufacturing, logistics, services, etc., based on data.
“The best way I can describe this is, basically, a lot of times, the site selection game is not one of inclusion — but one of elimination,” he said.
As businesses look for what they need from a site, they eliminate competing areas based on what they can offer, until they have whittled down their options to the best choice, Tamberrino said.
Brian Shull, economic development director for Harrisonburg, agreed.
“When these reputable groups, like CNBC, look at many different metrics, their findings are widely used,” he said.
And Virginia’s success is not by accident, Shull said.
The Virginia Economic Development Partnership “really made it a goal to try and get back up in the rankings,” he said.
The economic and business development community in Virginia worked together to “make sure everybody was at the top of their game,” Tamberrino said.
“One of the goals at that point was looking at where we were historically and where Virginia had slipped in the rankings and what Virginia what they needed to do to get back on top,” Tamberrino said.
The rankings are based on a state’s showing in 10 categories, including infrastructure, technology and innovation, and access to capital.
Virginia’s best rankings include a No. 1 spot in workforce and education, though it did tie with Massachusetts in the education ranking.
“This recognition underscores our work to build an inclusive and diversified economy, invest in our workforce, and create quality jobs — and is proof that companies of many different sizes and industries can find a home in Virginia,” Gov. Ralph Northam said in a press release.
About 38% of Virginians possess a bachelor’s degree or higher, according to the U.S. Census Bureau.
This available educated workforce was a major draw for online retail titan Amazon to set its $2.5 billion “HQ2” in Crystal City, Va., right outside Washington, D.C.
However, Virginia was not top dog in all the metrics, lagging behind other states in several categories.
Virginia ranked No. 35 for cost of doing business, No. 32 for cost of living and No. 17 for quality of life.
Reducing costs in the state is something that legislators in Richmond look at frequently, Shull said.
Shull disagreed with the “subjective” ranking of Virginia in the quality of life category.
“Certainly quality of life opportunities are great and the Shenandoah Valley has certainly played a role in quality of life,” he said.
Virginia also was at the top of CNBC’s Top States for Business list in 2007 and 2009.
But it has still been eight years since the state has reached the top of the list.
“One big reason I think Virginia dropped lower in the ranking for several years was we essentially suffered from sequestration,” Shull said, referring to federal budget cuts beginning in 2013.
For Virginia, where the federal defense budget contributes about 12% to the state’s gross domestic product, the cutback had negative effects.
The defense budget has increased over the last several years, and on March 11, President Donald Trump proposed a $750 billion budget for national security in fiscal year 2020, according to a press release from the Department of Defense. This would be an increase of $34 billion from fiscal year 2019’s $716 billion.
Access to capital and strong job growth are also major strengths of the state that have been noticed by economic and business development reports, Shull said.
“When they notice things like that, and rank us No. 1 out of all 50 states — that is a big boost for Virginia,” he said.