by James A. Bacon
For those who haven’t yet succumbed to state-ranking overload, here’s one more, this from the U.S. Chamber of Commerce. Its fourth annual Enterprising States report ranks states for the degree to which they are “best positioned to grow, create jobs and prosper in the coming five to ten years.”
The Chamber examines each state for 33 measures, which it organizes in six broad categories. Virginia snags a No. 5 spot for overall performance. Here is the breakdown by category:
Economic performance — 5th
Exports — 46th
Innovation and entrepreneurship — 3rd
Business climate — 16th
Talent pipeline — 5th
Infrastructure — 24th
Three of the top five performing states — North Dakota, Texas and Wyoming — are all enjoying natural resource booms. Of course, it could be said that Virginia has benefited from a federal spending boom. Here’s what the report says about the Old Dominion:
Virginia takes 1st place in our measure of general standard of living: median family income adjusted for cost of living. The state’s steady performance—ranking between 14th and 23rd in the other six performance measures—lands it 5th overall in growth and performance. Partly owing to its proximity to the nation’s capital, Virginia is a national leader in professional, scientific, and technical services. Virginia grew that sector 37% over the past decade — impressive growth for an already large sector.
And here is what Governor Bob McDonnell had to say:
Creating the best environment for private-sector job creation and innovation has been the top focus of our administration. Since we took office, our unemployment rate has fallen from 7.3 percent to 5.3 percent, the lowest rate in the Southeast and the second lowest east of the Mississippi. This report confirms that when it comes to supporting startups and new jobs, Virginia is a national leader and continuing to make substantive progress. But there is more to do. We have continued last year’s “Year of the Entrepreneur” campaign in Virginia with the ongoing “innoVAte” initiative, including an undergraduate business plan competition that brought some of the most promising startup ideas from 21 of Virginia’s colleges and universities to Richmond yesterday. Innovators like the young people who pitched their business plans to investors yesterday will form the backbone of a culture of entrepreneurship in Virginia that will continue to make the Commonwealth one of the best places to live, raise a family, and find a good job.
Bacon’s bottom line:
To what extent can McDonnell, or any other governor, take credit for Virginia’s strong performance? That’s a really sticky question. Clearly, the national economy is a major factor in Virginia’s performance, and so is proximity to the federal spending machine in Washington, D.C. The boom in major industries, especially the energy and agricultural sectors, also has driven state performance recently — in Virginia’s case, an energy-importing state, acting as a drag on performance. It’s difficult to disentangle the effect of state or regional policy, and any claims must be taken with a grain of salt.
My first rule of economic development is, “Do no harm.” And other than raising taxes to crank up spending on transportation, McDonnell has done no harm. The initiatives he highlights in the prepared statement above have little more than symbolic value. What he has not done — he hasn’t passed a lot of expensive regulations or spending programs — is more important that what he has. And his record on that score is fairy good.
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