The Editors' Blog

June 30, 2014

CNBC survey: Silicon Valley must have been an accident

CNBC has ranked North Carolina as one of the top states for business. Aside from the absolute accuracy of the North Carolina ranking, I have a few concerns about this survey.

CNBC has just ranked America’s top states for business, and North Carolina came in 5th.

I am all in favor of rankings that place North Carolina high. I have nothing but the utmost respect for such rankings. They must be methodologically impeccable.


I find something problematic with CNBC’s thinking. The heaviest weighting is given to a category called “Cost of Doing Business,” with 450 points. A couple of other categories get lower weighting. “Technology & Innovation” got 300 points and “Education” got 150.

So I went through this thought exercise. What state ranked best for “Cost of Doing Business?” Why, it was Oklahoma.

And where was California in this category? It ranked 48th.

This is the category that CNBC’s ranking folks felt was the most important.

But where is Silicon Valley, which has been mankind’s greatest technology incubator?

It is, of course, made up of the communities of San Jose, Mountain View, Cupertino, Santa Clara, etc., in California. These are expensive places to do business. Salaries are high. Real estate is ridiculous. State regulators get the hives when companies want to enlarge their carbon footprints.

But despite the high cost of doing business, Apple, Cisco, Hewlett- Packard, Intel and many other technology companies were born and thrived in Silicon Valley and not in Muskogee.

Overall, ranked across 10 categories, California placed 32nd among the nation’s “Top States for Business.” I guess if you don’t like states with high salaries, lotsa unions, and very pesky state bureaucrats, you don’t like California. All California has done is produce some of the world’s greatest companies on the south side of the San Francisco Bay. In spite of itself, I guess. Well, maybe Stanford, Berkeley and a zillion genius engineers and computer scientists helped.

Now, Nebraska (#4 overall in the survey), there’s a state for bidness.

This is why I’m skeptical about the CNBC survey, except for its spot-on high ranking of North Carolina.

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