Our economic development community proved last year that it can fulfill its primary mission—to build a better future—while coping with the most disruptive crisis of our lifetime. The outlines of that future can be found on the pages of Business Facilities’ 17th Annual Rankings Report.
The coronavirus pandemic accelerated trends that are speeding up a diaspora of talent from large urban centers. Millennials are on the verge of making up 75 percent of a suddenly dwindling national workforce; they’re migrating to mid-market metros that offer the affordability and quality of life they demand — and a 24/7 work/live/play environment that aligns with their work/life balance. Places like Boise, in our Fastest-Growing State (by population), Idaho.
State EDOs have risen to the challenge of a massive national shortage of skilled labor by spearheading partnerships between industry leaders and universities to create inclusive tech talent pipelines and fill them with thousands of new grads in data-centric disciplines like computer science and software engineering. You’ll find the leaders in our new Tech Talent Pipeline state ranking.
In 2021, there’s no denying the unfolding calamity of climate change, which has prompted several state legislatures to adopt aggressive goals that aim for the Holy Grail of net-zero emissions by producing 100 percent of electricity from renewables. Our new Renewable Portfolio Standards ranking identifies the locations that expect to get there first.
Our 17th Annual Rankings Report is our most comprehensive rankings compilation to date, with 60 categories containing 600 individual results that highlight the State, Metro and Global leaders who are busy building the foundation for a future of sustainable growth. Without further ado, here they are.
Click here to download the full 2021 BF Rankings Report including all State, Metro and Global rankings.
Business Facilities’ 17th Annual Rankings: State Rankings Report
VIRGINIA: BEST BUSINESS CLIMATE AND TOP TECH TALENT PIPELINE
Virginia is the top-ranked state in BF’s flagship Best Business Climate category. The Commonwealth also ranked first in our Cybersecurity leaderboard and in a new category we’re unveiling in our 2021 State Rankings Report: Tech Talent Pipeline.
“Virginia has undertaken the most impressive effort in the U.S. to fill the national shortage of skilled workers in the data-centric sectors that are driving economic growth in the 21st century,” BF Editor in Chief Jack Rogers said. “World-class universities are partnering with industry giants to add thousands of new computer science grads to Virginia’s rapidly expanding tech workforce. This combination positions VA to defend its tech talent pipeline leadership for years to come.”
With a highly educated and skilled workforce—including the highest concentration of tech workers in the nation—world-class universities and unmatched digital infrastructure, Virginia already had established a leadership position in the race to establish the top tech talent pipeline when the Commonwealth recently unleashed a bevy of new market-responsive talent pipeline initiatives.
Virginia is injecting more than $2 billion into a Tech Talent Investment Program that cumulatively represents the largest state commitment to computer science education.
Virginia’s Tech Talent Investment Program will generate an additional 31,000 computer science grads, strengthening and enhancing CS programs beginning in K-12. Universities and colleges across Virginia have committed to the state effort to strengthen the computer science talent pipeline, with several unveiling new facilities that aim to be the crown jewels of tech talent development. The top-ticket projects include:
- Virginia Tech is tripling its Northern Virginia footprint with the development of its new $1-billion Innovation Campus in Alexandria, which will eventually make its home on 3.5 acres in the first phase of a new mixed-use development and innovation district near the future Potomac Yard Metrorail Station.
- With state funding and matching private philanthropy, George Mason University is investing $250 million at its Arlington, VA campus, more than doubling the number of students enrolled in computer science majors to 15,000 and building a new HQ for the Institute for Digital InnovAtion that was launched at the university last year.
- Bolstered by the largest philanthropic gift in the school’s history ($120 million), the University of Virginia established the School of Data Science to address the increasing national shortage of data scientists. The School of Data Science will position UVA as a global leader training students in data analysis, machine learning, statistics, computer science and communication.
The U.S. Bureau of Labor Statistics projected 531,200 computer science and information technology jobs would be added nationally from 2019 to 2029. Through its Tech Talent Investment Program agreements with 11 universities, Virginia committed to creating 31,000 new computer science/engineering graduates over 20 years. The Innovation Campus in Alexandria is a major component to that commitment.
Boeing recently became the first foundational partner for Virginia Tech’s Innovation Campus, making a $50-million, multiyear commitment. Virginia Tech President Tim Sands said Boeing’s commitment will help jump-start the university’s effort to create the most diverse graduate technology campus in the country. The investment will provide student scholarships, help recruit world-class faculty and fund STEM programs for underserved students in K-12.
NORTH CAROLINA SNARES APPLE’S 1B CAMPUS
North Carolina, BF’s 2020 State of the Year, surged into second place in our annual Best Business Climate ranking, up from fifth place in last year’s leaderboard for this flagship category.
NC, which ranked fourth in our new Tech Talent Pipeline category, has put down a potent marker that it intends to duke it out with its northern neighbor for the Tech Talent crown. The Tar Heel State snared the most coveted economic deal from the tech sector this year when Apple chosen Research Triangle Park as the location of its first East Coast campus, a $1-billion project that will create 3,000 new jobs with an average annual salary of $185,000.
In April, Apple announced a commitment to invest $430 billion in the U.S. over the next five years. Rogers said the tech giant’s selection of Research Triangle Park as the site of its first mega-project in this five-year plan gives North Carolina a leg up on what is expected to be a heated competition for forthcoming investments from Apple.
“The deal that North Carolina secured in winning the Apple campus is a template for equity-driven economic development,” Rogers said, noting that the tech giant has agreed to invest $100 million to support schools and community initiatives in Raleigh-Durham as well as $112 million to help rural areas improve infrastructure so they can attract more businesses.
“This crown jewel of high-tech R&D will build a sustainable tech talent pipeline as it develops world-class facilities,” Rogers said. “As the home of NASCAR, North Carolina is no stranger to high-performance racing. NC has secured the pole position in a high-stakes contest for tech sector hegemony.”
The focus of Apple’s East Coast campus in NC will be machine learning, artificial intelligence and software engineering, the tech giant said. Gov. Roy Cooper said that once Apple creates the jobs, the tech giant will be eligible for incentives he considers “transformational.”
Under an agreement approved by a state incentives panel, Apple would get $846 million in cumulative cash payments over the next 39 years if the company meets job-creation and investment thresholds. The payments are calculated based on the income tax the state withholds from paychecks of the new workers.
The state Commerce Department estimates the project will generate nearly $2 billion annually in additional state revenues through 2061. Groundbreaking on the new campus is expected this fall.
“Apple’s global name recognition and the scale of its new presence in the Research Triangle will elevate North Carolina’s already strong reputation for producing highly skilled tech workers as well as having the quality of life and affordability that attract more of the same,” said Christopher Chung, chief executive officer of the Economic Development Partnership of North Carolina, which was among the state and local partners that helped attract the Apple investment.
Other tech players that have announced new investments in North Carolina in 2021 include Google, Robinhood, Adverum Biotechnologies, Invitae, Pennymac and Gilead Sciences. In total, these companies are expected to create more than 2,500 jobs in NC.
RISING STARS: ARIZONA, WEST VIRGINIA
Two states that have been rising stars on our radar had breakthrough results in our 2021 State Rankings Report.
Arizona was among the top 10 states in our rankings for Best Business Climate, Tech Talent Pipeline, Aerospace/Defense, Semiconductors, Installed Solar Power Capacity, Percentage of Electricity from Solar Power, Solar Power Jobs and Fastest-Growing States.
AZ has a rapidly expanding semiconductor fabrication sector that includes Intel’s largest manufacturing site. In March, Intel announced it would invest an additional $20 billion in Arizona to build two new semiconductor fabs to meet the demands of a global semiconductor shortage that has crippled the automotive industry, which increasingly relies on chips as it packs new technology in vehicles. [At presstime, Arizona and Texas are the frontrunners for Samsung’s $17-billion chip fab project.]
“As one of the fastest-growing states with an established tech talent pipeline; a specialized, high-tech supply chain; and an innovation ecosystem that keeps churning out new semiconductor applications, Arizona is surging to the top in this critical growth sector,” Rogers said.
Representing the largest private sector investment in state history, Intel’s $20 billion expansion in Arizona will include the construction of two new semiconductor fabs at the company’s Ocotillo campus in Chandler, AZ. The expansion project will create 3,000 new high-tech, high-wage jobs and 3,000 construction jobs, while supporting an estimated 15,000 additional indirect jobs.
The expansion is part of Intel’s IDM 2.0 upgrade, a major evolution of the company’s integrated device manufacturing (IDM) model.
“I’m thrilled to announce plans for Intel’s first large-scale foundry operation, which will be in Arizona,” said Intel CEO Pat Gelsinger, at the project announcement in March. “To make [this] expansion in Arizona possible, we are excited to be partnering with the state of AZ and the Biden Administration on incentives that spur this type of domestic investment.”
Intel’s operations in Arizona go back more than 40 years. With this new expansion, Intel will employ nearly 16,000 Arizonans and will have invested more than $50 billion in the state. Intel operates four other fabs in Arizona, including Fab 42, the company’s largest chipmaking factory in the U.S., said to be the most advanced in the world. In addition to high-volume manufacturing, Arizona is also home to Intel’s Assembly Test Technology Development Group.
West Virginia joined the top 10 in BF’s 2021 State Rankings Report in our flagship Best Business Climate category for the first time.
National coverage of West Virginia usually includes an invocation of the dim future of the coal industry. So it may surprise readers to learn that WV has grabbed a leadership position in an emerging technology that promises to transform high-speed transportation: in October, Virgin Hyperloop announced that it has chosen the Mountain State as the home of its $500-million Hyperloop Certification Center.
High-speed Hyperloop travel works using electric propulsion and electromagnetic levitation in “near-vacuum conditions” within the hyperloop tube system. The Hyperloop Certification Center will be constructed on nearly 800 acres of land in Grant and Tucker counties in Northeast West Virginia, an area selected, in part, because of its topography and proximity to large population centers in the Eastern United States, according to Mike Schneider, VP for project development at Virgin Hyperloop.
Construction on the certification center is set to begin in 2021. The center will serve first as a construction testing hub for hyperloop pod vehicles, and later as a training ground for conductors and operators when Virgin Hyperloop is ready to offer commercial hyperloop travel in the U.S. Virgin Hyperloop officials said they plan to have hyperloop travel available in the United States beginning in 2030.
North-Central West Virginia has been called the Silicon Valley of America’s biometrics activity. West Virginia University (WVU) is the Federal Bureau of Investigation’s lead academic partner in biometrics research.
LED FASTSTART: GOLD STANDARD IN CUSTOMIZED TRAINING
Louisiana Economic Development’s FastStart continues to set the standard for excellence in Customized Training, maintaining its status as our top-ranked state in this flagship category for a record 12 consecutive years.
In a recent letter to Business Facilities, Gov. John Bel Edwards announced that Louisiana is now establishing the LED FastStart Technology Center (FSTC).
“For over 12 years, LED FastStart has been providing ‘best-in-class’ talent recruitment and workforce training services to secure new and expanding projects in Louisiana,” Gov. Edwards said in the letter. “During this period, LED FastStart operations have been both highly successful and increasingly complex. What is now required is a state-of- the-art facility focused on designing and delivering these advanced training services.”
The FSTC as planned will become a training facility with fully developed Augmented Reality (AR) and Virtual Reality (VR) production suites, high-tech training material production capacity, client meeting and demonstration areas and conference rooms. The new facility, along with the dedicated staff at LED FastStart, will soon be equipped to provide client companies with customized training programs in advanced manufacturing and a host of other skill sets and sectors, as never before.
“LED FastStart, the top-ranked workforce training program in BF’s annual State Rankings Report, consistently delivers exceptional results for client companies,” Edwards said. “Its investments in higher education shape and create the talent pipeline industry and communities need to thrive. LED FastStart’s forward-looking approach to workforce development and talent attraction ensure it continues to set the standard to beat.”
Gov. Edwards noted that, to synchronize training with employer demand, Louisiana has long-focused on higher education partnerships.
“Our partnerships are boosting the number of graduates in advanced manufacturing, computer science and other growth sectors,” Edwards said. “During the past decade, with LED FastStart playing an integral role, those partnerships have produced more than 20,000 new jobs in STEM fields.”
Edwards referenced a recent McKinsey Global Survey which illuminated the scope of the workforce skills gap, with most respondents experiencing skill gaps in the workforce or expecting them soon. “Few respondents indicated they had a solution to this challenge,” Edwards said. “I believe LED FastStart is that solution, and will power successful companies in Louisiana in the challenging days that lie ahead.” He noted that Louisiana has installed advanced Haas 5-axis machining centers at every community and technical college in the state, the first state in the nation to do so.
“These Universal Machining Centers enable the automated production of parts on five vertical, horizontal and rotational axes at one time. CNC, or computer numerical control, automation enables a trained operator to become a critical part of an advanced manufacturing workforce,” Gov. Edwards said. “For Louisiana to continue as a global leader in manufacturing, we must make these investments in the highest-quality manufacturing equipment on our campuses to ensure our future workforce is trained to be best-in-class.”
Edwards also touted LED FastStart’s recently launched next-generation online recruiting platform. “This portal creates a unique online experience for employers and identifies job seekers using artificial intelligence tools,” he said.
The new LED FastStart Recruiting site includes customized landing pages, with vivid content about each company, and a hiring process that is searchable by job position, category, company or region within Louisiana.
“The establishment of the LED FastStart Technology Center, with fully developed Augmented Reality and Virtual Reality production suites, ensures that Louisiana’s premier workforce development program will stay ahead of the curve for years to come,” Rogers said.
Rogers also noted that a weighted factor in BF’s evaluation of customized training programs this year was the flexibility exhibited by these programs in response to the challenges created by the COVID-19 pandemic.
As COVID-19 cases spread in Louisiana and it became apparent that high schools needed to suspend on-site classes for the school year, LED FastStart coordinated with the Louisiana Department of Education and partner high schools to transition to online delivery of C4M curriculum.
LED FastStart rapidly transitioned project-specific training to remote delivery formats such as webinars and virtual classes. The LED FastStart eLearning team quickly converted many traditional instructor-led training courses to webinar format, including courses on Talent Management and Quality Programs. The eLearning team developed enhanced processes for virtual walkthroughs with subject matter experts, employing robust virtual review sessions of training content.
The media division of LED FastStart produced 26 Public Service announcements during the crisis for radio, TV and social media, including messages from Gov. Edwards and Ed Orgeron, the LSU football coach.
Louisiana’s hegemony in workforce training is facing a strong challenge from Virginia, which ranked second in our customized training category.
Virginia offers companies a choice of workforce development incentives, including the state’s customized training and recruiting program, as well as grant funding that permits companies to choose training and recruitment providers.
The Virginia Talent Accelerator Program provides recruiting and training services fully customized to a company’s unique jobs, operation and culture. The program is led by a highly experienced team, hired from the private sector, and all services are provided free of charge as an incentive for job creation.
Since its launch, the results generated by the Virginia Talent Accelerator Program have been impressive. Morgan Olson’s step-van assembly plant in Danville, VA is a good case in point. The company started hiring assemblers and fabricators for its new, $57.8 million, 703-job step van production facility in March of 2020.
The original plan projected that it would take three years for the operation to reach 703 employees. Now Morgan Olson is on track to reach that milestone in about half the time, with the Virginia Talent Accelerator Program playing a vital role in accelerating the start-up. In addition to expediting the new hire training process, the program has helped Morgan Olson dramatically reduce new-hire turnover relative to other plants, according to Mike Ownbey, Morgan Olson President Mike Ownbey.
“In our other plants across the country, we have about a 50 percent first-year attrition rate from employees coming in the door. In Virginia, we only have a 10 percent rate, which is amazing. I credit it all to the Virginia Talent Accelerator Program,” Ownbey said.
Mike Grundmann, senior vice president, Talent Solutions, at Virginia Economic Development Partnership told BF that the key to the success rate at Morgan Olson was the Virginia Talent Accelerator Program’s commitment to start training recruits before they actually were hired, ensuring that the candidates selected for these jobs are a good fit for the company.
After a project is announced, the Virginia Talent Accelerator Program’s job-specific training work begins. This training is fully customized to a client’s unique processes, equipment, procedures and standards. A Virginia Talent Accelerator Program team travels to an existing client facility with similar operations to observe the process and specific work being performed by equipment operators. The team works closely with the client’s operations and human resource officials to understand their best practices for recruiting and training.
Customized Training was not the only rankings category in our 2021 State Rankings Report that reflected the impact of the coronavirus crisis. We based our Recovery Leaders category on the percentage increase of a state’s GDP for 4Q 2020 compared to 3Q 2020. South Dakota topped this recovery leaderboard by registering 9.9 percent GDP growth for this period, with Texas, Utah, Connecticut and Tennessee filling out the top five, respectively.
The top five states in our Most Educated category, which is based on the percentage of grads with a Bachelor’s Degree or better, tracks closely with the leaderboard in our Highest Average Income ranking. Massachusetts takes the brainiac crown, followed by Colorado, New Jersey, Maryland and Connecticut, respectively. The top salaries crown belongs to New Jersey, followed by Connecticut, Massachusetts, Maryland and California.
TRACKING THE RACE TO NET-ZERO
BF has augmented its suite of renewable energy rankings this year to include a leaderboard of the states that have adopted the most aggressive Renewable Portfolio Standards and a top-10 ranking for Offshore Wind Power that compares commitments states have made to develop offshore wind power (measured in megawatts) by 2035.
Rogers compared the competition in the race to get the highest percentage of electricity from renewables to the mountain stage of the Tour de France.
“The race to net-zero carbon emissions has finally begun in earnest, and the leaders have separated themselves from the peloton by aiming for the top of the mountain,” Rogers said. “Let’s hope the stragglers catch up before the unfolding catastrophe of climate change overtakes all of us.”
In our new Renewable Portfolio Standards state ranking, we ranked the leaders who have the most stringent short-term (to be achieved by 2030) and longer-term goals, based on RPS adopted by state legislatures as of April 2021, as compiled by the National Conference of State Legislatures.
This formulation has produced the first tie among top-ranked states in the 17-year history of our annual Rankings Report: Maine, which has set the bar at 80 percent of electricity from renewables by 2030 and 100 percent by 2050, shares first place with New York, which has adopted a goal of 70 percent by 2030 and 100 percent by 2040.
“We recognize that New York’s mountain to climb will be much steeper because of its huge population and the amount of energy it takes to power the Empire State,” Rogers said. “This ranking focuses on the goals that have been set and rewards the leadership that set those goals, which should be emulated by all 50 states.”
Rounding out the top five in BF’s RPS category are Washington (100 percent by 2045), California (44 percent by 2024, 60 percent by 2030) and Nevada, (50 percent by 2030, 100 percent by 2050), respectively.
Offshore wind power is now a key component of U.S. energy strategy: President Biden announced a new U.S. goal of installing 30 GW of offshore wind power by 2035. [Biden also decided that drilling for oil in the Arctic will not be a component of our national energy strategy.] Analysts believe the new U.S. target may finally spur the West Coast to get serious about offshore wind, which until now has been an East Coast initiative.
Our top 10 in Offshore Wind Power (MW by 2035) is based on targets set by state legislatures or legislative targets now being considered. New York is no. 1 with its 9,000 MW commitment, followed by New Jersey at 7,500 MW and Virginia, which recently upped its target to 5,200.
IDAHO IS NOW THE PLACE TO GO
BF’s leaderboard for the Fastest-Growing States by population may raise a few eyebrows. Southwestern states who have dominated this category in recent years now have some stiff competition from the Rocky Mountains. Sparsely populated Idaho—you read that right, Idaho—is now the destination of choice for migrating Americans.
“Anyone who has been tracking recent trends in economic development shouldn’t be surprised by the exodus that is bringing thousands of people to the Gem State,” Rogers said.
“The good news for Idaho is that most of these newcomers aren’t golden agers who want to bask in the sun in retirement communities. Millennials who demand an affordable but superior quality of life—and a thriving tech ecosystem—are finding all of that and more in Idaho. A thriving and expanding tech hub in Boise in a state with unmatched scenic beauty is a tough combination to beat for locations striving to be top millennial magnets,” he added.