Eighth Annual State Competitiveness Report.pdf

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					Beacon Hill Institute    Eighth Annual
                                  State
                        Competitiveness
                                 Report
                                                                                                                Subindexes, Rank in 2008
                                                                        Govt & Fiscal                             Human
                                                           Overall                       Security     InfrStrc                   Tech     Biz Incub. Openness Enviro Plcy
                                                                            Policy                               Resources
                                                         Index Rank       I        R      I     R      I     R     I    R      I      R     I     R    I   R    I      R
                                        Alabama            3.39   48     4.97       29   3.01   48    4.97 28 3.72 46 4.55             33 4.45 37 4.66 36 4.67 34
                                        Alaska             4.82   24     2.72       50   4.97   28    5.37 16 4.50 34 4.11             38 3.26 50 7.08       1 5.68 11
                                        Arizona            5.10   22     6.20        8   4.45   36    5.03 27 4.81 32 4.69             32 5.44 12 5.23 16 4.46 39
                                        Arkansas           4.03   43     5.23       23   3.95   43    4.84 32 4.01 43 3.58             49 5.35 14 4.37 45 5.70 10
                                        California         4.70   25     3.19       47   5.61   18    3.31 48 4.18 37 5.92              6 5.19 18 6.03       4 4.87 32
                                        Colorado           6.73     4    4.97       30   6.92     1   5.67     9 5.42 20 6.21           4 6.09      6 4.71 34 5.73       9
                                        Connecticut        5.16   21     4.01       43   6.22     2   4.32 38 5.74 13 5.86              7 4.54 36 5.33 12 4.42 41
                                        Delaware           5.37   19     5.05       24   4.40   38    4.80 33 5.10 25 5.50             14 8.53      1 5.27 14 2.92 50
                                        Florida            4.58   32     6.74        1   3.80   45    3.64 47 4.23 36 3.99             43 5.61 11 5.28 13 5.07 26
                                        Georgia            4.28   37     5.88        9   2.89   49    5.21 20 3.70 47 4.45             36 6.45      4 4.80 28 4.50 38
                                        Hawaii             3.94   45     3.14       48   5.34   25    4.00 43 5.46 18 4.51             34 3.53 48 4.97 21 5.41 19
                                        Idaho              6.58     5    5.33       20   5.75   13    6.88     3 5.13 24 5.20          19 6.29      5 4.70 35 5.89       7
                                        Illinois           4.45   33     4.68       35   4.56   33    4.27 40 4.81 31 5.01             24 4.37 39 5.34 10 4.91 30
                                        Indiana            4.37   36     6.33        6   4.56   34    5.32 18 4.85 30 4.48             35 4.36 40 4.98 20 3.45 48
                                        Iowa               5.74   12     5.37       19   5.73   14    6.19     6 6.32     5 5.00       25 3.79 46 4.64 37 5.52 16
                                        Kansas             5.62   18     4.97       31   4.84   30    5.60 12 5.82 12 5.03             23 4.88 25 4.85 25 5.91           6
                                        Kentucky           4.21   38     3.96       44   5.49   20    5.42 15 4.06 42 3.97             44 4.65 34 5.02 19 4.81 33
                                        Louisiana          3.30   49     4.74       33   1.87   50    4.93 29 3.21 49 3.93             45 4.89 24 5.54       7 4.90 31
                                        Maine              4.70   26     3.84       45   6.11     5   4.50 35 5.64 14 3.87             46 4.73 28 4.49 43 5.92           5
                                        Maryland           4.66   28     4.98       28   4.51   35    3.11 49 5.61 15 7.29              2 5.35 15 4.79 29 3.72 46
                                        Massachusetts      7.33     1    4.71       34   6.16     3   4.21 41 7.09        1 8.83        1 6.95      3 5.39   9 4.28 43
                                        Michigan           4.60   30     5.02       26   4.82   31    5.33 17 4.53 33 5.28             18 3.36 49 5.08 18 5.13 24
                                        Minnesota          6.17     7    5.01       27   5.80   12    5.69     8 6.54     2 5.79       10 4.72 30 4.84 26 5.48 18
                                        Mississippi        3.12   50     5.88       10   4.23   42    3.99 44 2.30 50 3.77             48 4.61 35 4.25 48 5.21 22
                                        Missouri           4.61   29     6.20        7   4.37   40    4.60 34 4.90 27 4.86             28 4.68 32 4.48 44 4.99 29
                                        Montana            5.88   10     4.77       32   6.09     6   6.98     2 5.27 22 4.81          29 5.15 19 4.18 50 5.98           4
                                        Nebraska           5.68   14     5.51       16   5.92   10    5.13 25 6.08        8 4.96       26 4.73 29 4.53 42 5.57 14
                                        Nevada             5.64   15     6.57        2   4.44   37    7.22     1 4.06 41 3.34          50 5.75      8 5.33 11 5.11 25
                                        New Hampshire      5.63   17     5.39       18   5.63   16    4.41 36 6.24        6 5.76       11 4.87 26 4.60 38 5.38 20
                                        New Jersey         4.15   42     2.91       49   6.01     8   3.90 46 5.39 21 4.89             27 5.11 20 5.66       6 3.28 49
                                        New Mexico         4.39   34     5.03       25   3.67   46    5.16 22 4.17 38 5.45             15 4.80 27 4.57 40 5.34 21
                                        New York           4.38   35     3.21       46   5.62   17    2.13 50 5.45 19 5.57             13 4.66 33 5.74       5 5.04 27
                                        North Carolina     4.68   27     5.55       15   4.24   41    5.59 13 4.15 39 5.04             22 5.66      9 4.72 33 4.36 42
                                        North Dakota       6.75     3    6.39        5   6.14     4   6.00     7 6.48     4 5.20       20 4.93 23 4.54 41 6.13           1
                                        Ohio               3.95   44     4.18       40   5.59   19    5.64 10 4.89 28 4.73             31 3.82 45 4.77 31 3.49 47
                                        Oklahoma           4.17   40     4.34       38   4.60   32    5.13 23 4.39 35 4.10             39 5.06 21 4.33 47 5.60 13
                                        Oregon             5.97     8    5.78       12   5.38   21    6.52     5 4.88 29 5.40          17 4.18 42 5.25 15 5.49 17
                                        Pennsylvania       4.18   39     4.48       36   5.38   22    4.40 37 5.48 17 5.44             16 4.17 43 4.58 39 3.95 45
State Rankings




                                        Rhode Island       4.58   31     4.21       39   5.64   15    3.91 45 5.15 23 5.96              5 4.39 38 4.87 24 4.66 35
                 Alphabetical Listing




                                        South Carolina     3.93   46     5.71       13   3.92   44    5.11 26 3.50 48 4.00             42 4.97 22 4.92 23 4.51 37
                                        South Dakota       5.75   11     5.87       11   5.37   23    5.57 14 5.84 11 4.12             37 5.61 10 4.23 49 6.12           2
                                        Tennessee          4.16   41     6.49        3   3.53   47    5.24 19 3.75 45 4.04             41 5.29 17 4.77 30 4.43 40
                                        Texas              4.94   23     5.25       21   4.38   39    4.02 42 3.87 44 4.78             30 5.38 13 6.11       3 5.15 23
                                        Utah               6.79     2    6.45        4   4.99   27    5.60 11 6.18        7 5.70       12 7.56      2 4.95 22 4.64 36
                                        Vermont            5.69   13     4.03       42   4.94   29    4.85 31 6.48        3 6.45        3 3.99 44 5.10 17 6.07           3
                                        Virginia           5.64   16     5.62       14   5.01   26    5.13 24 5.03 26 5.80              9 5.85      7 4.80 27 5.01 28
                                        Washington         6.57     6    5.24       22   6.02     7   4.30 39 5.53 16 5.83              8 4.68 31 6.49       2 5.80      8
                                        West Virginia      3.70   47     5.47       17   6.00     9   4.89 30 4.13 40 3.79             47 3.66 47 4.35 46 4.11 44
                                        Wisconsin          5.33   20     4.41       37   5.81   11    5.19 21 5.97 10 5.08             21 4.33 41 4.75 32 5.57 15
                                        Wyoming            5.94     9    4.04       41   5.36   24    6.78     4 5.98     9 4.07       40 5.34 16 5.42       8 5.64 12
From the Executive Director
The Beacon Hill Institute at Suffolk University is pleased to release its Eighth Annual State Competitiveness Report.




                                                                                                                        BHI
Published since 2001, the report has drawn the growing attention of policymakers, economists and public officials
across the nation seeking to identify strengths and weaknesses in economic performance.

It’s difficult to look beyond the current economic turmoil for any bright signals. The current climate poses serious
challenges to every state. As expected, rising unemployment is putting pressure on state budgets. States face
serious problems with unfunded pensions and declining infrastructure.

Nonetheless, it is still important to understand the fundamentals, which provide the raison d’etre of our
competitiveness report. Our measure of the “microeconomic foundations of prosperity” at the state level continues
to offer a compelling measure of economic success or failure. There may be little that states can do to address the
problem of global economic insecurity. But it’s still worth understanding what it takes to attract and retain capital
and workers who add value to the state economy.

Massachusetts ranks 1st on our 2008 index. Based on its strong showing in technology, business incubation and
human resources, Massachusetts recaptured the top spot the year from Utah, which finished second.
Massachusetts continues to live and prosper by its wits and its diverse economy. North Dakota, Colorado, Idaho,
Washington, Minnesota, Oregon, Wyoming and Montana % states which benefit from a mix of natural resources
and human capital fill out the top ten. Nevada moved the most placed upward from 28th last year to 15th this year.
Montana and Oregon continue to improve since 2006 moving from 28th and 15th in 2008 respectively.

New Hampshire, a perennial competitor state from New England, which held third place only two years ago,
dropped to 17th this year, based on its decline in variety of areas, including openness (ability to export),
infrastructure (travel time to work and electricity costs) and its sluggish record in business start-ups.

Some analysts look exclusively at technology or taxes as indicators of competitiveness. But neither of these
indicators is, taken by themselves, adequate. Massachusetts (1) and Minnesota (7) and Washington (6) are the
only leading technology states to finish in the top ten in the 2008 BHI index. Other leading technology states -
California (25), Connecticut (21), New Jersey (42), New York (35), North Carolina (27) Pennsylvania (39) and Texas
(23) - have relatively unimpressive rankings. While several low tax states (as measured by the American Legislative
Exchange Council) did well in our survey, other similar states also failed to make the top ten in our index. These
include Arizona (22) Tennessee (41) and Texas (23).

Improving productivity and increasing personal income should be part of any economic development strategy. The
report continues to show that improvement can translate into real capita income growth. Thus, if a state gains a
point in the index, it will also gain $1,546 in real per capita income per year.

This year’s edition would be impossible without the talented resources available to the institute from its
successful internship program managed by Frank Conte, BHI’s director of communications and information
systems, as well as the institute’s affiliation with a graduate program in economics. In fact, the Competitiveness
Report has evolved into the centerpiece of a learning environment often with students taking the lead to make
improvements in data collection and analysis. This year’s report is the product of months of collaboration by
Bradley Dreisbach, Mark Adams and Matthew Schuster (all from Tufts University), Jonathan Ritter (Hobart College)
and of course Suffolk undergraduates Rawan Barri and James Nolet. G.P. Manish, a PhD candidate here at Suffolk,
combined all their efforts by coordinating and compiling the extensive research into its final form.

We are fond of saying that our young team is proof positive that human capital is a critical variable for highly-
motivated entities whether they are states or research organizations such as BHI. The final product, which we think
is more critical than ever, is but a new chapter in our rewarding, long-running project.




  Eighth Annual BHI State Competitiveness Report                                                  / Page 3
                                                                       Table of Contents
      Alabama .................................................................................................................................................................................. 16
BHI   Alaska ................................................................................................................................................................... 17
      Arizona ................................................................................................................................................................. 18
      Arkansas .............................................................................................................................................................. 19
      California ............................................................................................................................................................. 20
      Colorado .............................................................................................................................................................. 21
      Connecticut .......................................................................................................................................................... 22
      Delaware .............................................................................................................................................................. 23
      Florida .................................................................................................................................................................. 24
      Georgia ................................................................................................................................................................. 25
      Hawaii .................................................................................................................................................................. 26
      Idaho .................................................................................................................................................................... 27
      Illinois .................................................................................................................................................................. 28
      Indiana ................................................................................................................................................................. 29
      Iowa ...................................................................................................................................................................... 30
      Kansas .................................................................................................................................................................. 31
      Kentucky ............................................................................................................................................................... 32
      Louisiana ............................................................................................................................................................. 33
      Maine ................................................................................................................................................................... 34
      Maryland ............................................................................................................................................................. 35
      Massachusetts ..................................................................................................................................................... 36
      Michigan .............................................................................................................................................................. 37
      Minnesota ............................................................................................................................................................ 38
      Mississippi .......................................................................................................................................................... 39
      Missouri ............................................................................................................................................................... 40
      Montana ............................................................................................................................................................... 41
      Nebraska .............................................................................................................................................................. 42
      Nevada ................................................................................................................................................................. 43
      New Hampshire .................................................................................................................................................... 44
      New Jersey ............................................................................................................................................................ 45
      New Mexico .......................................................................................................................................................... 46
      New York ............................................................................................................................................................... 47
      North Carolina ..................................................................................................................................................... 48
      North Dakota ........................................................................................................................................................ 49
      Ohio ...................................................................................................................................................................... 50
      Oklahoma ............................................................................................................................................................. 51
      Oregon .................................................................................................................................................................. 52
      Pennsylvania ....................................................................................................................................................... 53
      Rhode Island ........................................................................................................................................................ 54
      South Carolina ..................................................................................................................................................... 55
      South Dakota ........................................................................................................................................................ 56
      Tennessee ............................................................................................................................................................. 57
      Texas ..................................................................................................................................................................... 58
      Utah ...................................................................................................................................................................... 59
      Vermont ................................................................................................................................................................ 60
      Virginia ................................................................................................................................................................ 61
      Washington .......................................................................................................................................................... 62
      West Virginia ....................................................................................................................................................... 63
      Wisconsin ............................................................................................................................................................ 64
      Wyoming .............................................................................................................................................................. 65


        Page 4 /                                                                                       BHI State Competitiveness Report
                                                    BHI
        “A state is competitive if it has
        in place the policies and
        conditions that ensure and
        sustain a high level of per capita
        income and continued growth.”




BHI State Competitiveness Report 2008    / Page 5
  BHI                            About the indexes
                                 How does one state create more economic
                                                                                       Table 1
                                 activity, and hence more income for its citizens,     State Competitiveness Rankings
                                 than other states? What special characteristics                                2008         2007          2006
                                 or attributes lead to generating this higher                              Index   Rank   Index Rank   Index     Rank
                                                                                       Massachusetts          7.33  1       7.07  2       7.28     1
                                 income? Since 2001, BHI’s State Competitiveness
                                                                                       Utah                   6.79  2       7.39  1       7.12     2
                                 Report has identified the qualities that allow        North Dakota           6.75  3       6.36  4       6.27     5
                                 some areas to excel in income generation and          Colorado               6.73  4       6.59  3       6.33     4
                                 the qualities that inhibit other areas from           Idaho                  6.58  5       6.24  5       6.06     6
                                                                                       Washington             6.57  6       5.94  7       5.87    13
                                 attaining the same level of competitiveness. This     Minnesota              6.17  7       6.20  6       6.00     9
                                 question quickly leads on to others: How are          Oregon                 5.97  8       5.74 14       5.66    15
                                 these qualities measured? What standard should        Wyoming                5.94  9       5.86 10       6.00     7
                                                                                       Montana                5.88 10       5.68 15       4.87    28
                                 be used to determine whether a state is               South Dakota           5.75 11       5.90  8       6.00     8
                                 competitive or not? Indeed, why is it even            Iowa                   5.74 12       5.48 18       5.54    18
                                 interesting to measure competitiveness? How           Vermont                5.69 13       5.78 12       5.95    12
                                                                                       Nebraska               5.68 14       5.82 11       5.97    11
                                 does economic competitiveness differ from
                                                                                       Nevada                 5.64 15       4.73 28       4.79    29
                                 interstate competition for workers, firms and         Virginia               5.64 16       5.62 16       5.98    10
                                 capital?                                              New Hampshire          5.63 17       5.88  9       6.60     3
                                                                                       Kansas                 5.62 18       5.53 17       5.61    17
                                                                                       Delaware               5.37 19       4.85 27       5.22    21
                                 This State Competitiveness Report uses these          Wisconsin              5.33 20       5.15 22       5.27    19
                                 questions as a starting point. The indexes are        Connecticut            5.16 21       4.93 25       5.01    24
                                 designed to measure the long-term                     Arizona                5.10 22       5.47 19       5.62    16
                                                                                       Texas                  4.94 23       5.35 20       5.15    22
                                 competitiveness of an area, and use a similar         Alaska                 4.82 24       5.77 13       5.75    14
                                 approach to the one taken in BHI’s earlier studies    California             4.70 25       5.10 24       5.26    20
                                 of state competitiveness (State Competitiveness
Defining State Competitiveness




                                                                                       Maine                  4.70 26       4.45 35       4.33    36
                                                                                       North Carolina         4.68 27       4.70 30       4.90    26
                                 Report 2001, 2002, 2003, 2004, 2005, 2006, and
                                                                                       Maryland               4.66 28       5.12 23       5.13    23
                                 2007). This year marks the eighth year of the         Missouri               4.61 29       4.87 26       4.58    31
                                 report.                                               Michigan               4.60 30       4.16 41       4.46    34
                                                                                       Rhode Island           4.58 31       5.19 21       4.95    25
                                                                                       Florida                4.58 32       4.63 33       4.89    27
                                 In this year’s report, Massachusetts returns to the   Illinois               4.45 33       4.43 36       4.51    33
                                 top, trading places with Utah. North Dakota,          New Mexico             4.39 34       4.72 29       4.22    38
                                 Colorado, Idaho, Washington, Minnesota,               New York               4.38 35       4.37 38       4.44    35
                                                                                       Indiana                4.37 36       3.91 44       3.72    45
                                 Oregon, Wyoming and Montana round out the             Georgia                4.28 37       4.68 31       4.70    30
                                 top ten most competitive states. (See Table 1).       Kentucky               4.21 38       4.31 39       4.14    39
                                 Most notably, Nevada moved 13 places higher           Pennsylvania           4.18 39       4.47 34       4.57    32
                                                                                       Oklahoma               4.17 40       4.68 32       4.13    40
                                 while Alaska dropped 11 places. This year’s
                                                                                       Tennessee              4.16 41       4.41 37       4.01    41
                                 rankings find once again that several Southern        New Jersey             4.15 42       4.07 43       3.94    43
                                 states continue to rank at the bottom: Alabama        Arkansas               4.03 43       3.54 46       3.61    46
                                                                                       Ohio                   3.95 44       3.89 45       3.91    44
                                 (48), Louisiana (49), and Mississippi (50).
                                                                                       Hawaii                 3.94 45       4.30 40       4.00    42
                                                                                       South Carolina         3.93 46       4.07 42       4.28    37
                                                                                       West Virginia          3.70 47       3.46 47       3.32    49
                                                                                       Alabama                3.39 48       3.44 48       3.61    47
                                                                                       Louisiana              3.30 49       2.75 50       3.44    48
                                                                                       Mississippi            3.12 50       2.97 49       3.02    50




                                     Page 6 /                                               BHI State Competitiveness Report
                                                                                                                    BHI
What is Competitiveness?
We consider a state to be competitive if it has in      defined above, or have an equivalent breadth of
place the policies and conditions that ensure and       coverage.
sustain a high level of per capita income and
continued growth. To achieve this, a state should       In thinking about how to create an index of
be able both to attract and incubate new                competitiveness, we begin with the simple
businesses and to provide an environment that is        economic relation:
conducive to the growth of existing firms.
                                                                         Y = f (K,L,technology).
Competitiveness may be thought of as a catch-all
term that covers what Michael Porter calls “the         This says that output (Y) depends on the amount of
microeconomic foundations of prosperity.” The           capital (K), labor (L) and technology that is harnessed
states of the United States all face the same           by the economy.2 Not surprisingly, more inputs lead
macroeconomic conditions set at                                         to more output. But what raises input
the top – national fiscal,                                              levels? And why do some states mix
monetary and trade policy;                                              the ingredients – sound fiscal policies,
where they differ from one                                              educated workforce, openness to
another        is     in     their                                      trade – more successfully than others?
microeconomic policies such as
tax and regulatory regimes, their                                     To answer these questions we need
provision and emphasis on                                             to focus on the quality of the business
education,         and       their                                    environment. Using his celebrated
attractiveness to business.                                           “diamond,” Porter finds it helpful to
These policies matter. As Porter                                      group the influences into four
puts it, “wealth is actually                                          components: the quality of available
created at the microeconomic level … - in the ability   inputs, the sophistication of local demand, the
                                                        nature of local suppliers and the extent to which




                                                                                                                    Defining State Competitiveness
of firms to create valuable goods and services using
productive methods.” 1                                  they form clusters, and the rules and institutions
                                                        that govern the market.3 These are still very broad
It follows that the outcome of competitiveness is       categories and so, following the Porter-inspired
greater affluence, measured by higher levels of         Global Competitiveness Report, we actually classify
real Gross State Product (GSP) or personal income       our indicators into eight groups. The breakdown is
per capita.                                             as follows:


Quantifying Competitiveness                             Government and fiscal policies. Businesses are more
To be useful as a concept, it is essential to have an      likely to be attracted to areas with moderate
operational measure of competitiveness, a                  tax rates and clear evidence of financial
measure that aggregates the key microeconomic              discipline (as evidenced, for instance, by high
variables into a single index. In its influential          state and municipal bond ratings, and budgetary
annual Global Competitiveness Report, the World            balance). This subindex is designed to pick up
Economic Forum does this for the countries of the          these effects.
world, but there is no equivalent at the level of
the states of the U.S. There are some more              Security A state will be more attractive to business
specialized rankings of the states, but none meet           if public officials are trusted, and if crime is low.
the criteria for measuring competitiveness as               The security subindex addresses these

 Eighth Annual BHI State Competitiveness Report                                               / Page 7
BHI                                                                                            Technical Note 1:
                                     dimensions of competitiveness, with particular
                                     emphasis on the importance of public safety.              Creating the Indexes

                                 Infrastructure. How easy is commuting? Do most
                                                                                               Given the raw data series for each state, several
                                     households have access to high-speed broadband
                                     and telephone service? Is housing affordable? How         steps were needed in order to construct the

                                     expensive is energy? These are the elements of            competitiveness index.
                                     competitiveness that are included in the                  1.   First, each variable was normalized to give it a
                                     infrastructure subindex for each state.                        mean of 5, a standard deviation of 1, and a
                                                                                                    range from 0 (worst) to 10 (best).
                                 Human resources. A high level of labor force                  2.   Then the eight sub indexes were formed as the
                                   participation, and skilled labor that is readily                 simple averages of the normalized component
                                   available and not too expensive, combined with a
                                                                                                    variables.
                                   widespread commitment to education, training and
                                                                                               3.   Next, the sub indexes themselves were
                                   health care, make a state attractive for business.
                                                                                                    normalized, again giving a mean of 5 and
                                   These factors are captured in the human resources
                                                                                                    standard deviation of 1 to each. These
                                   subindex.
                                                                                                    are presented inside the front and back

                                 Technology. Since the arrival of the industrial revolution,        covers.
                                     the development and application of technology has         Finally, the overall index of state competitiveness is
                                     been central to economic development. The                 the simple average of the eight sub indexes, again
                                     technology subindex measures this by taking into          normalizing it so it has a mean of 5 and standard
                                     account research funding, the number of patents           deviation of 1. In practice the competitiveness
                                     issued, the proportion of scientists and engineers
                                                                                               indicator index ranged from a low of 2.57 to a high
Defining State Competitiveness




                                     in the labor force, and the importance of high tech
                                                                                               of 7.14.
                                     companies.

                                 Business Incubation. A good idea is not enough;
                                    businesses also need to be able to mobilize                Environmental Policy. States that are faced
                                    financing for investment, both internally and from             with environmental problems, or that
                                    the financial system. A higher rate of business births         have a heavy-handed policy of
                                    is a particularly clear sign of a competitive                  environmental regulation, are likely to
                                    environment, and is an important component of the              be less attractive to businesses as well
                                    business incubation subindex.                                  as to their workers and managers; we
                                                                                                   measure this effect with the
                                 Openness. Open economies tend to be more
                                    competitive and hence more productive. The
                                    openness subindex measures how connected the
                                    firms and people in a state are with the rest of the
                                    world. It is based on the level of exports, as well as
                                    the percent of the population born abroad, a key
                                    element.




                                  Page 8                                      /BHI State Competitiveness Report 2008
                                                                                                               BHI
    environmental policy subindex, which among               as the level of taxation and the number of
    other things reflects the levels of air pollution and    state employees. In practice, neither these
    of toxic releases. Decent air quality is a measure       series, nor the others that make up the
    that states are pursuing policies that improve the       building blocks of our index, are closely
    environment, and attracts workers and investors.         correlated, suggesting that they are indeed
                                                             picking     up    different    facets    of
A complete list of the components of the                     competitiveness.
competitiveness indexes is given in Table A1 at the
end of this section                                                                Is the competitiveness
of the report. We                                                                  index useful?
have used the most                                                                 Do the indexes of state
                                                                                   competitiveness
recent        data
                                                                                   explain affluence and
available; due to
                                                                                   growth? If the index is
time lags, most of                                                                 properly constructed,
the series refer to                                                                then it should help
2007 or 2006, but                                                                  explain why some
some are almost                                                                    areas are affluent and
contemporaneous,                                                                   others are not. In our
and just a few go                                                                  experiment          we
                                                                                   estimate an equation
back farther.
                                                                                   with the following
                                                                                   general form:
The eight categories are coherent, but there is
inevitably some degree of arbitrariness in the way in
                                                             Real Personal Income per capita
which individual data series are assigned to the
                                                             = a + b × Competitiveness Index
subindexes. For instance, the amount of air travel could




                                                                                                                Defining State Competitiveness
be included in the infrastructure subindex or the
                                                             We use a measure of personal income per
measure of openness; and electricity prices could be
                                                             capita for 2007, which is the year that
included in the infrastructure subindex or the
                                                             corresponds best to the timing of most of
environmental subindex. In practice, the assignment
                                                             the component series that make up the
of a data series is much less important than the fact
                                                             competitiveness index. Since the cost of
that it is included at all.
                                                             living varies from state to state we adjust the
                                                             raw numbers to take account of these
A competitiveness index is simply a summary measure
                                                             differences, using spatial price indexes
based on a large number of variables. One difficult,
                                                             generated by Aten (2007).5 This gives the
and controversial, part is choosing a weighting scheme.
                                                             following estimated equation:
Our approach is the simplest and most transparent:
within each subindex, each variable carries equal
                                                             Personal income per capita =
weight. Then each sub-index is given the same weight
                                                             31.2 + 1.546 × Competitiveness Index 2008
when constructing the overall index. This has been
                                                             t=9.9 t=2.5
referred to as a “democratic” weighting structure, but
it is of course arbitrary (although reasonable). If two
                                                             This equation has an R2 of .10, and personal
series were very highly correlated, there would be no
                                                             income per capita is measured in thousands
need to include both of them in the index; at first sight,
                                                             of dollars per year in 2007. The data points,
one might expect some series to move together, such


   BHI State Competitiveness Report 2008                                                  / Page 9
   BHI                           and the line fitted through them, are shown in                              value to policy makers, who are in a better
                                 Figure 1.                                                                   position to identify what needs to be done, in
                                                                                                             order of priority, to improve the position of their
                                 The coefficient on the Index variable, which is on a                        states.
                                 scale of 0 (not competitive) to 10 (very competitive)
                                 is significant at the 5 percent level and indicates The logic behind this is that a higher
                                 that an additional one point on the competitiveness competitiveness indicator index is associated
                                 index            is                                                                              with     greater
                                 associated with                  Figure 1. Linking Competitiveness to Real Personal Income       affluence.      A
                                 $1,546 more in                                                                                   reasonable
                                                                                                  55


                                 real per capita                                                                                  inference is that
                                                         Real Personal Income per capita, $'000




                                 income. Thus, if                                                                                 if one were to
                                                                                                  50




                                 a state gains a                                                                                  i m p r o v e
                                                                                                  45




                                 point in the                                                                                     competitiveness,
                                 index, it will                                                                                   then residents of
                                                                                                  40




                                 also gain $1,546                                                                                 the state would
                                 in real per capita                                                                               be better off.
                                                                                                  35




                                 income.           A                                                                              And the greatest
                                                                                                  30




                                 similar linear                                                                                   upside potential
                                                               3             4              5               6             7
                                 regression with                                  Competitiveness index, 2008
                                                                                                                                  is    for     the
                                 an R2 of .11 finds                                                                               indicators whose
                                 that if a state                                                                                  performance is
                                 rises by ten points in the ranking (e.g. from 15      th to     currently weak. For instance, a low-crime state
                                 5 th), its real per capita income is expected to be             may have trouble reducing the crime rate further,
                                 $1,130 higher. Competitiveness really does matter. while for a high-crime state, efforts to reduce
Defining State Competitiveness




                                                                                                 crime are likely to be an efficient way to boost
                                                                                                 competitiveness.
                                 Putting the competitiveness index to work
                                 What do we learn from this exercise? Naturally it is To illustrate, consider the case of Maryland,
                                 interesting to look at the raw rankings (Tables 1), which this year ranks 28th with a competitiveness
                                 but this may not be the most important use of the indicator index of 4.66 or just slightly below the
                                 information. The detailed data, both in individual average (5.00) in our ranking. Thanks to its strong
                                 variables and the sub-indexes, allow one to identify showing in technology (2nd) Maryland does well
                                 the determinants of competitiveness. This is of in drawing NIH support and a scientific workforce.

                                                                                                             However, Maryland’s overall index score is hurt
                                                                                                             by several factors, including most notably its low
                                                                                                             infrastructure subindex ranking (49 th ) and its
                                                                                                             weak environmental subindex ranking (46 th).
                                                                                                             While these are the areas of greatest deficiency
                                                                                                             for Maryland, they also mark the areas with the
                                                                                                             greatest potential. For example, if Maryland
                                                                                                             could institute measures that would raise its
                                                                                                             subindexes for infrastructure, security and


                                  Page 10                                                              /BHI State Competitiveness Report 2008
                                                                                                                     BHI
environmental variables to the national average, it     The central goal of this report is to engage everyone
could increase its overall index from 4.66 to 5.84,     in thinking about how best to improve long term
increasing its overall ranking from 28h to 11th. This   economic growth, while expanding and
improvement would be associated with an increase        maintaining high levels of personal income. At the
in real personal income of almost $1,900 per person     state level, even if it is essential to think global,
per year.                                               we still have to act local.


What next?                                              (Endnotes)
Since 2001, when we began compiling these               1
                                                          Michael Porter, “The Current Competitiveness Index:
rankings, we have set out to invite the policymakers,   Measuring the Microeconomic Foundations of
                                                        Prosperity,” in World Economic Forum, The Global
citizens and the media to pore over the detailed        Competitiveness Report 2000, Oxford University Press, New
results contained here. We have also visited state      York, 2000. For more discussion of competitiveness
houses from Massachusetts to Rhode Island and           applied to nations see “What is Competitiveness?” The
Arizona to Wisconsin and have hosted discussions        Competitiveness Institute, (September 2007): http://
                                                        www.competitiveness.org/article/articleview/774/1/32/
with delegations from the Republic of Georgia,          (accessed November 1, 2008).
China, and other nations. Legislatures and planning     2
                                                          By dividing across by the population, this equation may
agencies have sought ways to improve their ranking.     also be expressed in per capita terms; output per capita
                                                        is a standard measure of affluence.
                                                        4
                                                          Michael E. Porter, The Competitive Advantage of Nations,
Since then, we’ve received significant press            Free Press, New York, 1990.
attention and fielded dozens of questions about         4
                                                          Bettina H. Aten, “Estimates of State Price Levels for
our methodology. Some have compared our                 Consumption Goods and Services: A First Brush,” Bureau
ranking to other studies that stress economic           of Economic Analysis (November 2, 2007): http://
                                                        w w w . b e a . g o v / p a p e r s / p d f /
freedom or low tax criteria. We do agree that           estimates_of_state_price_levels_oct2007.pdf.




                                                                                                                     Defining State Competitiveness
economic freedom and sound tax policy are
important, and our index of competitiveness
includes some indicators, such as the share of state
tax collections in Gross State Product, that measure
the weight of government quite well. However,
we believe that other factors are also important to
competitiveness, even if they are not easy to place
on a scale of economic freedom or fit into the ideals
of low tax regimes; these include such variables as
the time that is required to travel to work, the
availability of venture capital, the number of
patents generated, and the importance to the
economy of high-tech firms. For each state, we set
out the main competitive strengths and weaknesses
to give individuals a sense of where their home
state has been and which direction it could be
taking.




  Eighth Annual BHI State Competitiveness Report                                               / Page 11
              BHI State Competitiveness Report 2007 / Page 11
               Table A1
BHI            Components of Sub indexes for States
               Sub index         Competitiveness Indicators Index (“objective”)
               Government &      State and local taxes per capita /income per capita( )
               Fiscal Policy     Workers’ compensation premium rates ( )
                                 Bond rating (composite of S&P’s and Moody’s, scale 1 25) (+)
                                 Budget surplus as % of Gross State Product (+)
                                 Average benefit per first payment for unemployed ( )
                                 Full time equivalent state and local government employees per 100 residents
                                 ()
               Security          Crime index per 100,000 inhabitants ( )
                                 % Change in crime index, 2005 2006 ( )
                                 Murders index per 100,000 inhabitants ( )
                                 The BGA Integrity Index (+)
               Infrastructure    Telephone penetration (combined Fed/state/local taxes as % of price) (+)
                                 High speed lines per 1000 (+)
                                 Air passengers per capita (+)
                                 Travel time to work ( )
                                 Electricity prices per million BTU ( )
                                 Median monthly housing costs ( )
               Human Resources   % of population without health insurance ( )
                                 % of population aged 25 and over that graduated from high school (+)
                                 Unemployment rate, not seasonally adjusted ( )
                                 % of students enrolled in degree granting institutions per 1000 (+)
                                 % of adults in the labor force (+)
                                 Infant mortality rate in deaths per 1,000 live births ( )
                                 Non federal physicians per 100,000 inhabitants (+)
                                 % of students at or above proficient in mathematics, Grade 4 public schools
                                 (+)
               Technology        Academic R&D per $1,000 GSP (+)
                                 NIH support to institutions in the state, per capita (+)
                                 Patents per 100,000 inhabitants (+)
                                 Science and engineering graduate students per 100,000 inhabitants (+)
                                 Science and engineering degrees awarded per 100,000 inhabitants (+)
                                 Scientists and engineers as % of labor force (+)
                                 Employment in high tech industry as a % of total employment(+)
               Business          Deposits in commercial banks and savings institutions, per capita (+)
               Incubation        Venture capital available per capita (+)
                                 Employer firm births per 100,000 inhabitants (+)
                                 IPO (A weighted measure of the value and number of initial public Stock
                                 offerings of companies as a share of Gross State Product) (+)
                                 % of labor force that is represented by unions ( )
State Index




                                 Minimum wage ( )
               Openness          Exports per capita, $ (+)
                                 Incoming foreign direct investment per capita, $ (+)
                                 % of population born abroad (+)
               Environmental     Toxic release inventory, pounds/1000 sq. miles ( )
               Policy            Carbon emission per 1000 sq miles ( )
                                 Air quality (% good average days) (+)


              Page 12 /                     Eighth Annual BHI State Competitiveness Report
                                                              BHI
           “The states of the United States all face
           the same macroeconomic conditions set at
           the top – national fiscal, monetary and
           trade policy. Where they differ from one
           another is in their microeconomic policies
           such as tax and regulatory regimes, their
           provision and emphasis on education, and
           their attractiveness to business. These
           policies matter.”


                                                              State Index




Eighth Annual BHI State Competitiveness Report    / Page 13
     BHI

                                                                                                                                      Each state’s overall rank
                                          How to Read Indicator Index Pages                                                           is based on its total
                                                                                                                                      index from 1 (highest) to
                                                                                                                                      50 (lowest)
                                                                The index value ranks from 0
                                                                to 10, with a mean of 5 and a
                              In this column you will           standard deviation of 1. Each
                              find variables where the          state’s index is ordered to                                                      In this column you
                              state is competitive.             create the overall rank among                                                    will find variables
                                                                the 50 states.                                                                   where the state is
                                                                                                   Index                 Overall Rank            not competitive

                                          STATE NAME                                               6.10                              5

                                                  COMPETITIVE ADVANTAGES                             COMPETITIVE DISADVANTAGES

                                                                            Inde     Ran                                                 Inde    Ran
                                                Subindex/Variable                                    Subindex/Variable
                                                                              x       k                                                    x      k
                                           Government and fiscal policy                         Government and fiscal policy
                                           subindex                         4.97      24        subindex                                  4.97    24
                                           Budget deficit, % of GSP         5.10      11        Bond rating: composite                   3.13     49



                                           Security subindex                5.65      11        Security subindex                        5.65     11
                                           The BGA Integrity Index          5.69      15


                                                                                                                                     Variables are the
                                           Infrastructure subindex          3.63      47        Infrastructure subindex              elements that make up
                                                                                                                                         3.63    47
                                  A subindex combinesper 1000
                                           High-speed lines                 6.99       1        Electricity prices per million BTU   each subindex.
                                                                                                                                         3.49    47
                                  one or more variables                                         Median Monthly Housing Costs         Variables that rank
                                                                                                                                         3.35    47
                                  that explain certain                                          Travel time to work                  between 1 and 20 are
                                                                                                                                         3.06    49
How to read the index pages




                                  social orHuman resources subindex
                                            economic                        6.68      1         Human resources subindex             considered 1
                                                                                                                                         6.68
                                  characteristics. For                                                                               advantages to a state,
                                  example, the institutions                                                                          while variables that
                                  and security subindex is                                                                           rank between 30 and
                                  composed of othersubindex
                                           Technology                       8.45      1         Technology subindex                  50 are considered
                                                                                                                                         8.45     1
                                           Academic R&D per $1,000 GSP
                                  variables such as crime,                  7.71      2                                              disadvantages.
                                           Patents, per 100,000
                                  percentage change in inhabitants          6.41      3
                                  crime, and murders
                                  committed in the state.
                                           Business incubation subindex     7.65      1         Business incubation subindex             7.65      1
                                           Bank deposits per capita          5.38     5         Minimum wage                             3.42     43
                                           Venture capital per capita       10.00     1
                                           Openness subindex                 6.29     7         Openness subindex                        6.29      7
                                           Exports per capita, dollars      5.95      7
                                           % of population born abroad       5.98     9

                                           Environmental policy subindex    3.92      43        Environmental policy subindex            3.92     43
                                                                                                Carbon emission per 1000 sq              2.80     48
                                                                                                miles




                               Page 14                                              /BHI State Competitiveness Report 2008
                                                    BHI
           2008 State Index




BHI State Competitiveness Report 2008   / Page 15
BHI           ALABAMA                                                                                                                   Index      Overall Rank
                                                                                                                                          3.39        48
                                      COMPETITIVE ADVANTAGES                                                 COMPETITIVE DISADVANTAGES

                             Subindex/Variable                         Index   Rank                    Subindex/Variable                           Index          Rank
              Government and fiscal policy subindex                     4.99    29    Government and fiscal policy subindex                                4.99          29
              State and local taxes per capita /income per capita       5.65    11    Workers’ compensation premium rates                           4.05           42

              Average benefit per first payment for unemployed          6.82    2     Budget deficit, % of GSP                                      3.97           45

                                                                                      Full-time-equivalent state and local government employees     4.67           38
                                                                                      per 100 residents




              Security subindex                                         3.73    48    Security subindex                                             3.73           48
                                                                                      Crime index, per 100,000 inhabitants                          4.03           39
                                                                                      Crime index change 2006-2007, %                               3.92           46
                                                                                      Murder index, per 100,000 inhabitants                         3.47           48
                                                                                      The BGA Integrity Index                                       3.52           47
              Infrastructure subindex                                   4.99    28    Infrastructure subindex                                       4.99           28
              Telephone penetration (combined Fed/state/local taxes     5.55    16    High-speed lines per 1000                                     3.98           42
              as % of price)
              Median monthly housing costs                              5.88    9     Air passengers per capita                                     4.27           45
                                                                                      Travel time to work                                           4.79           31




              Human resources subindex                                  4.14    46    Human resources subindex                                      4.14           46
              % of population without health insurance                  5.45    19    % of population aged 25 and over that graduated from high     3.47           45
                                                                                      school
                                                                                      % of adults who are in the labor force                        3.61           47
                                                                                      Infant mortality rate, deaths per 1000 live births            3.32           47
                                                                                      Rate of nonfederal physicians per 100,000 inhabitants         4.10           42

                                                                                      % of students at or above proficient in mathematics, grade    3.34           47
                                                                                      4 - public schools




              Technology subindex                                       4.66    33    Technology subindex                                           4.66           33
              Academic R&D per $1,000 GSP                               5.01    19    Patents, per 100,000 inhabitants                              4.05           44
                                                                                      S&E degrees awarded per 100,000 inhabitants                   4.49           35
                                                                                      Scientists and engineers as % of labor force                  4.67           31




              Business incubation subindex                              4.75    37    Business incubation subindex                                  4.75           37
              Minimum wage                                              5.52     7    Bank deposits per capita                                      4.66           35
                                                                                      Venture capital per capita                                    4.41           47
                                                                                      Employer firm births per 100,000 inhabitants                  3.97           45




              Openness subindex                                         4.66    36    Openness subindex                                             4.66           36
              Incoming foreign direct investment per capita, dollars    4.91    13    % of population born abroad                                   4.12           44




              Environmental policy subindex                             4.67    34    Environmental policy subindex                                 4.67           34
                                                                                      Toxic release inventory, pounds per 1000 sq. miles            4.50           37
                                                                                      Air Quality Index                                             4.46           39
State Index




               Page 16 /                                                Eighth Annual BHI State Competitiveness Report
ALASKA                                                                                                                    Index    Overall Rank




                                                                                                                                                  BHI
                                                                                                                            4.82      24
                       COMPETITIVE ADVANTAGES                                                   COMPETITIVE DISADVANTAGES

               Subindex/Variable                         Index   Rank                    Subindex/Variable                         Index   Rank
Government and fiscal policy subindex                     4.08    50    Government and fiscal policy subindex                       4.08     50
State and local taxes per capita /income per capita       7.58     1    Workers’ compensation premium rates                         2.25     50

Average benefit per first payment for unemployed          6.72    3     Budget deficit, % of GSP                                    0.84     50

                                                                        Full-time-equivalent state and local government             2.29     49
                                                                        employees per 100 residents




Security subindex                                         4.98    28    Security subindex                                           4.98     28
Crime index change 2006-2007, %                           5.95     6    Crime index, per 100,000 inhabitants                        4.46     32
                                                                        Murder index, per 100,000 inhabitants                       4.39     36



Infrastructure subindex                                   5.13    16    Infrastructure subindex                                     5.13     16
Telephone penetration (combined Fed/state/local           5.72    11    High-speed lines per 1000                                   3.80     43
taxes as % of price)
Air passengers per capita                                 7.06    3     Electricity prices per million BTU                          3.78     45
Travel time to work                                       6.52    5     Median monthly housing costs                                3.90     42




Human resources subindex                                  4.67    34    Human resources subindex                                    4.67     34
% of population aged 25 and over that graduated from      6.23     3    % of population without health insurance                    3.90     43
high school
Infant mortality rate, deaths per 1000 live births        5.73    14    Unemployment rate, not seasonally adjusted                  4.62     33
                                                                        % of population enrolled in degree-granting institutions    3.66     48

                                                                        % of adults who are in the labor force                      4.17     41
                                                                        Rate of nonfederal physicians per 100,000 inhabitants       4.16     40




Technology subindex                                       4.34    38    Technology subindex                                         4.34     38
Academic R&D per $1,000 GSP                               5.00    20    NIH support to institutions per capita                      4.19     45
                                                                        Patents, per 100,000 inhabitants                            3.85     50
                                                                        Science & Engineering grad. students 100,000                4.43     33
                                                                        inhabitants
                                                                        S&E degrees awarded per 100,000 inhabitants                 3.36     49




Business incubation subindex                              4.20    50    Business incubation subindex                                4.20     50
                                                                        Bank deposits per capita                                    4.44     50
                                                                        Venture capital per capita                                  4.41     47
                                                                        IPO, % of GSP                                               4.43     38
                                                                        % of labor force that is represented by unions              2.78     49
                                                                        Minimum wage                                                4.53     32

Openness subindex                                        7.08     1     Openness subindex                                           7.08     1
Exports per capita, dollars                               6.43    4
Incoming foreign direct investment per capita, dollars   10.00    1



Environmental policy subindex                             5.68    11    Environmental policy subindex                               5.68     11
Carbon emission per 1000 sq miles                         5.98     1
Air Quality Index                                         5.61    13
                                                                                                                                                  State Index




         Eighth Annual BHI State Competitiveness Report                                                                            / Page 17
BHI           ARIZONA                                                                                                                     Index      Overall Rank
                                                                                                                                            5.10        22
                                      COMPETITIVE ADVANTAGES                                                   COMPETITIVE DISADVANTAGES

                             Subindex/Variable                           Index   Rank                    Subindex/Variable                           Index   Rank
              Government and fiscal policy subindex                       5.49    8     Government and fiscal policy subindex                         5.49     8
              State and local taxes per capita /income per capita         5.74    10    Bond rating: composite                                        4.33     33

              Workers’ compensation premium rates                         6.11    7     Budget deficit, % of GSP                                      4.09     44
              Average benefit per first payment for unemployed            6.38    5

              Full-time-equivalent state and local government             6.28    3
              employees per 100 residents



              Security subindex                                           4.65    36    Security subindex                                             4.65     36
              Crime index change 2006-2007, %                             5.57    13    Crime index, per 100,000 inhabitants                          3.49     49
              The BGA Integrity Index                                     5.49    18    Murder index, per 100,000 inhabitants                         4.04     43



              Infrastructure subindex                                     5.01    27    Infrastructure subindex                                       5.01     27
              High-speed lines per 1000                                   5.40    18    Travel time to work                                           4.50     36
              Air passengers per capita                                   5.56     8    Median monthly housing costs                                  4.52     36




              Human resources subindex                                    4.87    32    Human resources subindex                                      4.87     32
              % of population enrolled in degree-granting institutions    8.14     1    % of population without health insurance                      3.87     45

                                                                                        % of population aged 25 and over that graduated from          4.32     36
                                                                                        high school
                                                                                        % of adults who are in the labor force                        4.42     35
                                                                                        Rate of nonfederal physicians per 100,000 inhabitants         4.42     34

                                                                                        % of students at or above proficient in mathematics, grade    3.98     42
                                                                                        4 - public schools




              Technology subindex                                         4.77    32    Technology subindex                                           4.77     32
              Patents, per 100,000 inhabitants                            5.07    19    Academic R&D per $1,000 GSP                                   4.61     32
              Scientists and engineers as % of labor force                4.98    20    NIH support to institutions per capita                        4.39     39
              Employment in high-tech industry as % of total              5.32    16    Science & Engineering grad. students 100,000                  4.39     34
              employment                                                                inhabitants
                                                                                        S&E degrees awarded per 100,000 inhabitants                   4.63     31




              Business incubation subindex                                5.20    12    Business incubation subindex                                  5.20     12
              Employer firm births per 100,000 inhabitants                5.35    14    Bank deposits per capita                                      4.53     47
              IPO, % of GSP                                               6.01     7
              % of labor force that is represented by unions              5.51    19




              Openness subindex                                           5.23    16    Openness subindex                                             5.23     16
              % of population born abroad                                 6.18     8    Incoming foreign direct investment per capita, dollars        4.62     45



              Environmental policy subindex                               4.46    39    Environmental policy subindex                                 4.46     39
              Toxic release inventory, pounds per 1000 sq. miles          5.62    19    Air Quality Index                                             2.06     50

              Carbon emission per 1000 sq miles                           5.71    14
State Index




              Page 18 /                                                    Eighth Annual BHI State Competitiveness Report
ARKANSAS                                                                                                                Index    Overall Rank




                                                                                                                                                 BHI
                                                                                                                          4.03      43
                         COMPETITIVE ADVANTAGES                                           COMPETITIVE DISADVANTAGES

                Subindex/Variable                  Index   Rank                    Subindex/Variable                             Index    Rank
Government and fiscal policy subindex               5.09    23    Government and fiscal policy subindex                           5.09     23
Workers’ compensation premium rates                 6.21     5    State and local taxes per capita /income per capita             4.43     36
Average benefit per first payment for unemployed    5.39    16




Security subindex                                   4.33    43    Security subindex                                               4.33     43
                                                                  Crime index, per 100,000 inhabitants                            3.97     40
                                                                  Crime index change 2006-2007, %                                 4.58     32
                                                                  Murder index, per 100,000 inhabitants                           4.28     41
                                                                  The BGA Integrity Index                                         4.49     33
Infrastructure subindex                             4.94    32    Infrastructure subindex                                         4.94     32
Travel time to work                                 5.67    11    Telephone penetration (combined Fed/state/local taxes as        4.82     31
                                                                  % of price)
Electricity prices per million BTU                  5.57    15    High-speed lines per 1000                                       3.23     48
Median monthly housing costs                        6.05     6    Air passengers per capita                                       4.31     44




Human resources subindex                            4.33    43    Human resources subindex                                        4.33     43
Unemployment rate, not seasonally adjusted          5.61    15    % of population without health insurance                        4.43     35
                                                                  % of population aged 25 and over that graduated from high       3.66     44
                                                                  school
                                                                  % of population enrolled in degree-granting institutions        4.25     39

                                                                  % of adults who are in the labor force                          3.82     45
                                                                  Infant mortality rate, deaths per 1000 live births              4.38     37
                                                                  Rate of nonfederal physicians per 100,000 inhabitants           3.93     46

                                                                  % of students at or above proficient in mathematics, grade      4.61     34
                                                                  4 - public schools

Technology subindex                                 3.94    49    Technology subindex                                             3.94     49
                                                                  Academic R&D per $1,000 GSP                                     4.18     40
                                                                  NIH support to institutions per capita                          4.29     42
                                                                  Patents, per 100,000 inhabitants                                3.97     49
                                                                  Science & Engineering grad. students 100,000 inhabitants        3.91     47

                                                                  S&E degrees awarded per 100,000 inhabitants                     3.64     48
                                                                  Scientists and engineers as % of labor force                    3.53     50
                                                                  Employment in high-tech industry as % of total employment       4.06     41

Business incubation subindex                        5.16    14    Business incubation subindex                                    5.16     14
Employer firm births per 100,000 inhabitants        5.25    16    Bank deposits per capita                                        4.68     33
% of labor force that is represented by unions      6.09     8    Venture capital per capita                                      4.46     40
Minimum wage                                        6.01     4    IPO, % of GSP                                                   4.43     38




Openness subindex                                   4.37    45    Openness subindex                                               4.37     45
                                                                  Exports per capita, dollars                                     4.13     42
                                                                  Incoming foreign direct investment per capita, dollars          4.66     43
                                                                  % of population born abroad                                     4.32     34
Environmental policy subindex                       5.70    10    Environmental policy subindex                                   5.70     10
Carbon emission per 1000 sq miles                   5.58    19
Air Quality Index                                   6.12     9
                                                                                                                                                 State Index




             Eighth Annual BHI State Competitiveness Report                                                                      / Page 19
BHI           CALIFORNIA                                                                                                                      Index    Overall Rank
                                                                                                                                                4.70      25
                                       COMPETITIVE ADVANTAGES                                                   COMPETITIVE DISADVANTAGES

                              Subindex/Variable                          Index   Rank                    Subindex/Variable                             Index    Rank
              Government and fiscal policy subindex                       4.27    47    Government and fiscal policy subindex                           4.27     47
              Full-time-equivalent state and local government             5.83     9    State and local taxes per capita /income per capita             3.99     45
              employees per 100 residents
                                                                                        Workers’ compensation premium rates                             4.35     37
                                                                                        Bond rating: composite                                          2.99     49
                                                                                        Budget deficit, % of GSP                                        3.87     46
                                                                                        Average benefit per first payment for unemployed                4.57     36

              Security subindex                                           5.38    18    Security subindex                                               5.38     18
              Crime index change 2006-2007, %                             5.71     9    Murder index, per 100,000 inhabitants                           4.48     34
              The BGA Integrity Index                                     6.33     4



              Infrastructure subindex                                     4.40    48    Infrastructure subindex                                         4.40     48
              High-speed lines per 1000                                   6.08     7    Telephone penetration (combined Fed/state/local taxes as        4.13     41
                                                                                        % of price)
              Air passengers per capita                                   5.04    14    Travel time to work                                             3.87     45
                                                                                        Electricity prices per million BTU                              4.36     39
                                                                                        Median monthly housing costs                                    2.91     49



              Human resources subindex                                    4.45    37    Human resources subindex                                        4.45     37
              % of population enrolled in degree-granting institutions    5.68    12    % of population without health insurance                        3.90     43

              Infant mortality rate, deaths per 1000 live births          6.14    7     % of population aged 25 and over that graduated from high       3.41     46
                                                                                        school
                                                                                        Unemployment rate, not seasonally adjusted                      3.49     46
                                                                                        % of adults who are in the labor force                          4.22     40
                                                                                        % of students at or above proficient in mathematics, grade      3.72     45
                                                                                        4 - public schools




              Technology subindex                                         5.68    6     Technology subindex                                             5.68     6
              NIH support to institutions per capita                      5.46    10
              Patents, per 100,000 inhabitants                            6.67     3
              Science & Engineering grad. students 100,000                5.50    14
              inhabitants
              Scientists and engineers as % of labor force                5.79    10
              Employment in high-tech industry as % of total              6.37     6
              employment



              Business incubation subindex                                5.08    18    Business incubation subindex                                    5.08     18
              Bank deposits per capita                                    4.82    17    % of labor force that is represented by unions                  4.04     44
              Venture capital per capita                                  8.47     2    Minimum wage                                                    3.13     48
              Employer firm births per 100,000 inhabitants                5.03    19
              IPO, % of GSP                                               5.00    15



              Openness subindex                                           6.03    4     Openness subindex                                               6.03     4
              Exports per capita, dollars                                 5.25    17    Incoming foreign direct investment per capita, dollars          4.73     33
              % of population born abroad                                 8.11     1

              Environmental policy subindex                               4.87    32    Environmental policy subindex                                   4.87     32
              Toxic release inventory, pounds per 1000 sq. miles          5.82     7    Air Quality Index                                               3.64     47
State Index




                Page 20 /                                                  Eighth Annual BHI State Competitiveness Report
Colorado




           COLORADO                                                                                                                     Index    Overall Rank




                                                                                                                                                                   BHI
                                                                                                                                         6.73           4
                                   COMPETITIVE ADVANTAGES                                                    COMPETITIVE DISADVANTAGES

                          Subindex/Variable                           Index   Rank                    Subindex/Variable                         Index       Rank
           Government and fiscal policy subindex                       4.99    30    Government and fiscal policy subindex                       4.99        30
           State and local taxes per capita /income per capita         5.30    17    Bond rating: composite                                      3.88        44

           Workers’ compensation premium rates                         5.96     9    Average benefit per first payment for unemployed            3.92        44
           Budget deficit, % of GSP                                    5.51    11
           Full-time-equivalent state and local government             5.36    20
           employees per 100 residents



           Security subindex                                           6.22    1     Security subindex                                           6.22        1
           Crime index change 2006-2007, %                             7.88     1
           Murder index, per 100,000 inhabitants                       5.65    16
           The BGA Integrity Index                                     6.11     8

           Infrastructure subindex                                     5.24    9     Infrastructure subindex                                     5.24        9
           High-speed lines per 1000                                   5.81    13    Telephone penetration (combined Fed/state/local taxes as    4.61        35
                                                                                     % of price)
           Air passengers per capita                                   6.21    4     Travel time to work                                         4.76        32
                                                                                     Median monthly housing costs                                4.71        34




           Human resources subindex                                    5.28    20    Human resources subindex                                    5.28        20
           % of population aged 25 and over that graduated from        5.79    16    % of population without health insurance                    4.35        36
           high school
           % of population enrolled in degree-granting institutions    5.54    14

           % of adults who are in the labor force                      5.66    13
           Infant mortality rate, deaths per 1000 live births          5.38    18
           Rate of nonfederal physicians per 100,000 inhabitants       5.10    18

           % of students at or above proficient in mathematics,        5.24    20
           grade 4 - public schools



           Technology subindex                                         5.90    4     Technology subindex                                         5.90        4
           NIH support to institutions per capita                      5.08    18
           Patents, per 100,000 inhabitants                            5.65    11
           Science & Engineering grad. students 100,000                5.86    10
           inhabitants
           S&E degrees awarded per 100,000 inhabitants                 6.12    5
           Scientists and engineers as % of labor force                6.72    5
           Employment in high-tech industry as % of total              7.00    3
           employment

           Business incubation subindex                                5.49    6     Business incubation subindex                                5.49        6
           Venture capital per capita                                  6.19     3    Bank deposits per capita                                    4.68        32
           Employer firm births per 100,000 inhabitants                6.70     5    Minimum wage                                                4.74        31
           IPO, % of GSP                                               5.02    14
           % of labor force that is represented by unions              5.60    17



           Openness subindex                                           4.71    34    Openness subindex                                           4.71        34
           Incoming foreign direct investment per capita, dollars      4.87    18    Exports per capita, dollars                                 4.01        46

           % of population born abroad                                 5.27    16

           Environmental policy subindex                               5.73    9     Environmental policy subindex                               5.73        9
           Toxic release inventory, pounds per 1000 sq. miles          5.83    6

           Carbon emission per 1000 sq miles                           5.69    15
           Air Quality Index                                           5.66    12
                                                                                                                                                                   State Index




              Eighth Annual BHI State Competitiveness Report                                                                                    / Page 21
BHI           CONNECTICUT                                                                                                                Index    Overall Rank
                                                                                                                                           5.16      21
                                      COMPETITIVE ADVANTAGES                                                  COMPETITIVE DISADVANTAGES

                             Subindex/Variable                         Index   Rank                    Subindex/Variable                          Index   Rank
              Government and fiscal policy subindex                     4.60    43    Government and fiscal policy subindex                        4.60     43
              Budget deficit, % of GSP                                  5.37    19    State and local taxes per capita /income per capita          3.46     48
                                                                                      Workers’ compensation premium rates                          4.78     31
                                                                                      Bond rating: composite                                       4.33     33
                                                                                      Average benefit per first payment for unemployed             4.29     42



              Security subindex                                         5.78     2    Security subindex                                            5.78     2
              Crime index, per 100,000 inhabitants                      6.04    10
              Crime index change 2006-2007, %                           5.60    10
              Murder index, per 100,000 inhabitants                     5.69    15
              The BGA Integrity Index                                   5.78    14
              Infrastructure subindex                                   4.76    38    Infrastructure subindex                                      4.76     38
              Telephone penetration (combined Fed/state/local taxes     5.71    12    Air passengers per capita                                    4.41     39
              as % of price)
              High-speed lines per 1000                                 6.71    2     Travel time to work                                          4.64     33
                                                                                      Electricity prices per million BTU                           3.24     49
                                                                                      Median monthly housing costs                                 3.82     44



              Human resources subindex                                  5.50    13    Human resources subindex                                     5.50     13
              % of population without health insurance                  6.10     7    Unemployment rate, not seasonally adjusted                   4.34     36
              % of population aged 25 and over that graduated from      5.54    20    % of population enrolled in degree-granting institutions     4.08     41
              high school
              % of adults who are in the labor force                    5.73    12
              Infant mortality rate, deaths per 1000 live births        5.81    12
              Rate of nonfederal physicians per 100,000 inhabitants     6.75     5

              % of students at or above proficient in mathematics,      5.62    13
              grade 4 - public schools



              Technology subindex                                       5.64    7     Technology subindex                                          5.64     7
              NIH support to institutions per capita                    6.31    4
              Patents, per 100,000 inhabitants                          5.90    9
              Science & Engineering grad. students 100,000              6.13    6
              inhabitants
              S&E degrees awarded per 100,000 inhabitants               5.38    15
              Scientists and engineers as % of labor force              5.99     7



              Business incubation subindex                              4.79    36    Business incubation subindex                                 4.79     36
              Bank deposits per capita                                  4.92    12    Employer firm births per 100,000 inhabitants                 4.53     33
              Venture capital per capita                                5.17    12    % of labor force that is represented by unions               4.26     40
              IPO, % of GSP                                             6.14     5    Minimum wage                                                 3.71     44




              Openness subindex                                         5.33    12    Openness subindex                                            5.33     12
              Exports per capita, dollars                               5.40    12
              Incoming foreign direct investment per capita, dollars    4.88    16

              % of population born abroad                               5.72    11
              Environmental policy subindex                             4.42    41    Environmental policy subindex                                4.42     41
                                                                                      Carbon emission per 1000 sq miles                            3.16     49
                                                                                      Air Quality Index                                            4.66     35
State Index




               Page 22 /                                               Eighth Annual BHI State Competitiveness Report
Delaware




           DELAWARE                                                                                                                       Index    Overall Rank




                                                                                                                                                                   BHI
                                                                                                                                            5.37      19
                                   COMPETITIVE ADVANTAGES                                                     COMPETITIVE DISADVANTAGES

                          Subindex/Variable                           Index   Rank                     Subindex/Variable                           Index    Rank
           Government and fiscal policy subindex                       5.02    24    Government and fiscal policy subindex                          5.02     24
           Bond rating: composite                                      6.55     1    Workers’ compensation premium rates                            3.95     43
           Average benefit per first payment for unemployed            5.57    13    Budget deficit, % of GSP                                       4.37     38

                                                                                     Full-time-equivalent state and local government employees      4.83     35
                                                                                     per 100 residents




           Security subindex                                           4.62    38    Security subindex                                              4.62     38
                                                                                     Crime index, per 100,000 inhabitants                           4.44     33
                                                                                     Crime index change 2006-2007, %                                4.57     33
                                                                                     The BGA Integrity Index                                        4.26     40

           Infrastructure subindex                                     4.93    33    Infrastructure subindex                                        4.93     33
           Telephone penetration (combined Fed/state/local taxes       6.07     4    Air passengers per capita                                      4.03     50
           as % of price)
           High-speed lines per 1000                                   6.26    6     Electricity prices per million BTU                             4.43     38
                                                                                     Median monthly housing costs                                   3.95     41




           Human resources subindex                                    5.06    25    Human resources subindex                                       5.06     25
           % of population without health insurance                    5.65    13    Infant mortality rate, deaths per 1000 live births             3.59     46
           % of population enrolled in degree-granting institutions    5.19    19

           Rate of nonfederal physicians per 100,000 inhabitants       5.09    19




           Technology subindex                                         5.37    14    Technology subindex                                            5.37     14
           Patents, per 100,000 inhabitants                            5.69    10    Academic R&D per $1,000 GSP                                    3.79     48
           Science & Engineering grad. students 100,000                6.21     5    NIH support to institutions per capita                         4.51     32
           inhabitants
           S&E degrees awarded per 100,000 inhabitants                 5.73    9
           Scientists and engineers as % of labor force                6.54     6
           Employment in high-tech industry as % of total              5.15    18
           employment



           Business incubation subindex                               6.60     1     Business incubation subindex                                   6.60     1
           Bank deposits per capita                                   10.00     1    Minimum wage                                                   4.53     32
           Employer firm births per 100,000 inhabitants                5.57    11
           IPO, % of GSP                                              10.00     1




           Openness subindex                                           5.27    14    Openness subindex                                              5.27     14
           Exports per capita, dollars                                 5.80     7
           Incoming foreign direct investment per capita, dollars      5.15     5



           Environmental policy subindex                               2.92    50    Environmental policy subindex                                  2.92     50
                                                                                     Toxic release inventory, pounds per 1000 sq. miles             2.73     48
                                                                                     Carbon emission per 1000 sq miles                              3.59     46
                                                                                     Air Quality Index                                              2.44     49
                                                                                                                                                                   State Index




                      Eighth Annual BHI State Competitiveness Report                                                                               / Page 23
Florida




          BHI           FLORIDA                                                                                                                   Index    Overall Rank
                                                                                                                                                    4.58      32
                                                  COMPETITIVE ADVANTAGES                                               COMPETITIVE DISADVANTAGES

                                       Subindex/Variable                        Index   Rank                    Subindex/Variable                          Index    Rank
                        Government and fiscal policy subindex                    5.70    1     Government and fiscal policy subindex                        5.70     1
                        State and local taxes per capita /income per capita      6.70    4     Budget deficit, % of GSP                                     4.24     43

                        Bond rating: composite                                   6.10     8
                        Average benefit per first payment for unemployed         5.90    10

                        Full-time-equivalent state and local government          6.07    4
                        employees per 100 residents



                        Security subindex                                        4.24    45    Security subindex                                            4.24     45
                        The BGA Integrity Index                                  5.43    19    Crime index, per 100,000 inhabitants                         3.59     46
                                                                                               Crime index change 2006-2007, %                              3.59     47
                                                                                               Murder index, per 100,000 inhabitants                        4.33     39

                        Infrastructure subindex                                  4.52    47    Infrastructure subindex                                      4.52     47
                        High-speed lines per 1000                                5.43    17    Telephone penetration (combined Fed/state/local taxes as     3.17     48
                                                                                               % of price)
                        Air passengers per capita                                5.60    7     Travel time to work                                          4.27     40
                                                                                               Electricity prices per million BTU                           4.77     37
                                                                                               Median monthly housing costs                                 3.86     43



                        Human resources subindex                                 4.48    36    Human resources subindex                                     4.48     36
                        Rate of nonfederal physicians per 100,000 inhabitants    5.09    20    % of population without health insurance                     3.40     48

                                                                                               % of population aged 25 and over that graduated from high    4.70     32
                                                                                               school
                                                                                               Unemployment rate, not seasonally adjusted                   4.06     41
                                                                                               % of population enrolled in degree-granting institutions     4.01     44

                                                                                               % of adults who are in the labor force                       4.65     31




                        Technology subindex                                      4.25    43    Technology subindex                                          4.25     43
                                                                                               Academic R&D per $1,000 GSP                                  3.85     47
                                                                                               NIH support to institutions per capita                       4.24     44
                                                                                               Science & Engineering grad. students 100,000 inhabitants     4.17     42

                                                                                               S&E degrees awarded per 100,000 inhabitants                  3.88     46
                                                                                               Scientists and engineers as % of labor force                 4.40     35



                        Business incubation subindex                             5.27    11    Business incubation subindex                                 5.27     11
                        Bank deposits per capita                                 4.82    18
                        Employer firm births per 100,000 inhabitants             6.34     6
                        % of labor force that is represented by unions           5.95    11




                        Openness subindex                                        5.28    13    Openness subindex                                            5.28     13
                        % of population born abroad                              6.72     5    Incoming foreign direct investment per capita, dollars       4.57     48



                        Environmental policy subindex                            5.07    26    Environmental policy subindex                                5.07     26
                        Air Quality Index                                        5.85    10    Toxic release inventory, pounds per 1000 sq. miles           4.73     33
                                                                                               Carbon emission per 1000 sq miles                            4.62     38
          State Index




                        Page 24 /                                               Eighth Annual BHI State Competitiveness Report
GEORGIA                                                                                                              Index     Overall Rank




                                                                                                                                              BHI
                                                                                                                       4.28       37
                       COMPETITIVE ADVANTAGES                                            COMPETITIVE DISADVANTAGES

               Subindex/Variable                   Index   Rank                    Subindex/Variable                           Index   Rank
Government and fiscal policy subindex               5.36    9     Government and fiscal policy subindex                         5.36     9
Bond rating: composite                              6.55     1    State and local taxes per capita /income per capita           4.51     35
Budget deficit, % of GSP                            5.44    15
Average benefit per first payment for unemployed    5.26    19




Security subindex                                   3.66    49    Security subindex                                             3.66     49
                                                                  Crime index, per 100,000 inhabitants                          3.78     45
                                                                  Crime index change 2006-2007, %                               2.47     50
                                                                  Murder index, per 100,000 inhabitants                         3.99     44
                                                                  The BGA Integrity Index                                       4.39     38
Infrastructure subindex                             5.07    20    Infrastructure subindex                                       5.07     20
Air passengers per capita                           5.95     5    Travel time to work                                           3.93     44
                                                                  Median monthly housing costs                                  4.84     32




Human resources subindex                            4.12    47    Human resources subindex                                      4.12     47
                                                                  % of population without health insurance                      4.07     41
                                                                  % of population aged 25 and over that graduated from          4.15     39
                                                                  high school
                                                                  Unemployment rate, not seasonally adjusted                    4.34     36
                                                                  % of population enrolled in degree-granting institutions      3.77     46

                                                                  % of adults who are in the labor force                        4.30     38
                                                                  Infant mortality rate, deaths per 1000 live births            4.19     42
                                                                  Rate of nonfederal physicians per 100,000 inhabitants         4.07     44

                                                                  % of students at or above proficient in mathematics, grade    4.10     41
                                                                  4 - public schools
Technology subindex                                 4.59    36    Technology subindex                                           4.59     36
Employment in high-tech industry as % of total      5.13    19    Science & Engineering grad. students 100,000                  4.32     38
employment                                                        inhabitants
                                                                  S&E degrees awarded per 100,000 inhabitants                   4.23     40
                                                                  Scientists and engineers as % of labor force                  4.58     33




Business incubation subindex                        5.66    4     Business incubation subindex                                  5.66     4
Venture capital per capita                          5.16    13
Employer firm births per 100,000 inhabitants        5.24    17
% of labor force that is represented by unions      6.30     3
Minimum wage                                        7.83     1



Openness subindex                                   4.80    28    Openness subindex                                             4.80     28
% of population born abroad                         5.12    19    Exports per capita, dollars                                   4.55     31
                                                                  Incoming foreign direct investment per capita, dollars        4.72     35

Environmental policy subindex                       4.50    38    Environmental policy subindex                                 4.50     38
                                                                  Toxic release inventory, pounds per 1000 sq. miles            4.60     36
                                                                  Carbon emission per 1000 sq miles                             4.97     33
                                                                  Air Quality Index                                             3.94     44
                                                                                                                                              State Index




             Eighth Annual BHI State Competitiveness Report                                                                    / Page 25
BHI           HAWAII                                                                                                                        Index    Overall Rank
                                                                                                                                              3.94      45
                                      COMPETITIVE ADVANTAGES                                                   COMPETITIVE DISADVANTAGES

                             Subindex/Variable                         Index   Rank                     Subindex/Variable                            Index    Rank
              Government and fiscal policy subindex                     4.25    48    Government and fiscal policy subindex                           4.25     48
              Workers’ compensation premium rates                       5.42    16    State and local taxes per capita /income per capita             3.90     46
                                                                                      Budget deficit, % of GSP                                        3.70     48
                                                                                      Average benefit per first payment for unemployed                2.40     50




              Security subindex                                         5.22    25    Security subindex                                               5.22     25
              Murder index, per 100,000 inhabitants                     6.17     5    Crime index, per 100,000 inhabitants                            3.95     41
              The BGA Integrity Index                                   6.36     3    Crime index change 2006-2007, %                                 4.38     38



              Infrastructure subindex                                   4.64    43    Infrastructure subindex                                         4.64     43
              Telephone penetration (combined Fed/state/local taxes     5.47    17    Travel time to work                                             4.13     42
              as % of price)
              High-speed lines per 1000                                 5.85    12    Electricity prices per million BTU                              0.59     50
              Air passengers per capita                                 9.65     1    Median monthly housing costs                                    2.18     50




              Human resources subindex                                  5.31    18    Human resources subindex                                        5.31     18
              % of population without health insurance                  6.58     2    % of population enrolled in degree-granting institutions        4.35     37

              % of population aged 25 and over that graduated from      5.93    10    % of adults who are in the labor force                          4.55     32
              high school
              Unemployment rate, not seasonally adjusted                5.82    11    % of students at or above proficient in mathematics, grade      4.23     38
                                                                                      4 - public schools
              Infant mortality rate, deaths per 1000 live births        5.36    20
              Rate of nonfederal physicians per 100,000 inhabitants     5.68    10




              Technology subindex                                       4.64    34    Technology subindex                                             4.64     34
              Academic R&D per $1,000 GSP                               5.42    14    Patents, per 100,000 inhabitants                                3.99     47
                                                                                      Scientists and engineers as % of labor force                    4.57     34
                                                                                      Employment in high-tech industry as % of total employment       4.06     40




              Business incubation subindex                              4.33    48    Business incubation subindex                                    4.33     48
              Bank deposits per capita                                  4.84    15    IPO, % of GSP                                                   4.48     36
                                                                                      % of labor force that is represented by unions                  2.87     48
                                                                                      Minimum wage                                                    4.37     37




              Openness subindex                                         4.97    21    Openness subindex                                               4.97     21
              Incoming foreign direct investment per capita, dollars    5.08     8    Exports per capita, dollars                                     3.38     50

              % of population born abroad                               6.46    6

              Environmental policy subindex                             5.41    19    Environmental policy subindex                                   5.41     19
              Toxic release inventory, pounds per 1000 sq. miles        5.81     8
State Index




                Page 26 /                                                Eighth Annual BHI State Competitiveness Report
Idaho




        IDAHO                                                                                                                     Index    Overall Rank




                                                                                                                                                          BHI
                                                                                                                                    6.58        5
                                COMPETITIVE ADVANTAGES                                                 COMPETITIVE DISADVANTAGES

                        Subindex/Variable                       Index   Rank                    Subindex/Variable                          Index   Rank
        Government and fiscal policy subindex                    5.13    20    Government and fiscal policy subindex                        5.13     20
        Workers’ compensation premium rates                      5.35    18    State and local taxes per capita /income per capita          4.34     38
        Budget deficit, % of GSP                                 6.28     5    Bond rating: composite                                       4.33     33




        Security subindex                                        5.48    13    Security subindex                                            5.48     13
        Crime index, per 100,000 inhabitants                     6.23     6    The BGA Integrity Index                                      3.91     42
        Crime index change 2006-2007, %                          6.20     4
        Murder index, per 100,000 inhabitants                    5.57    18

        Infrastructure subindex                                  5.67    3     Infrastructure subindex                                      5.67     3
        Telephone penetration (combined Fed/state/local taxes    6.97    3
        as % of price)
        Travel time to work                                      5.81    9
        Electricity prices per million BTU                       6.03    1




        Human resources subindex                                 5.09    24    Human resources subindex                                     5.09     24
        % of population aged 25 and over that graduated from     5.65    17    % of population enrolled in degree-granting institutions     4.52     33
        high school
        Unemployment rate, not seasonally adjusted               5.89    10    Rate of nonfederal physicians per 100,000 inhabitants        3.56     49

        % of adults who are in the labor force                   5.41    16
        Infant mortality rate, deaths per 1000 live births       5.61    16




        Technology subindex                                      5.15    19    Technology subindex                                          5.15     19
        Patents, per 100,000 inhabitants                         8.15     1    Academic R&D per $1,000 GSP                                  3.97     44
        Employment in high-tech industry as % of total           6.18     9    NIH support to institutions per capita                       4.02     50
        employment
                                                                               Science & Engineering grad. students 100,000                 4.51     32
                                                                               inhabitants
                                                                               S&E degrees awarded per 100,000 inhabitants                  4.34     37




        Business incubation subindex                             5.58    5     Business incubation subindex                                 5.58     5
        Employer firm births per 100,000 inhabitants             8.29    1     Bank deposits per capita                                     4.50     48
        % of labor force that is represented by unions           6.11    6     Venture capital per capita                                   4.51     34
        Minimum wage                                             5.52    7




        Openness subindex                                        4.70    35    Openness subindex                                            4.70     35
                                                                               Incoming foreign direct investment per capita, dollars       4.62     46



        Environmental policy subindex                            5.89    7     Environmental policy subindex                                5.89     7
        Carbon emission per 1000 sq miles                        5.94    3
        Air Quality Index                                        6.25    6
                                                                                                                                                          State Index




                      Eighth Annual BHI State Competitiveness Report                                                                       / Page 27
Illinois




           BHI           ILLINOIS                                                                                                                       Index     Overall Rank
                                                                                                                                                          4.45       33
                                                 COMPETITIVE ADVANTAGES                                                     COMPETITIVE DISADVANTAGES

                                        Subindex/Variable                           Index   Rank                     Subindex/Variable                            Index    Rank
                         Government and fiscal policy subindex                       4.87    35    Government and fiscal policy subindex                           4.87     35
                         State and local taxes per capita /income per capita         5.04    20    Workers’ compensation premium rates                             4.23     40

                         Full-time-equivalent state and local government             5.87    8     Bond rating: composite                                          4.33     33
                         employees per 100 residents
                                                                                                   Average benefit per first payment for unemployed                4.47     40




                         Security subindex                                           4.72    33    Security subindex                                               4.72     33
                                                                                                   Murder index, per 100,000 inhabitants                           4.59     31
                                                                                                   The BGA Integrity Index                                         4.24     41



                         Infrastructure subindex                                     4.74    40    Infrastructure subindex                                         4.74     40
                         Air passengers per capita                                   5.53     9    Telephone penetration (combined Fed/state/local taxes as        4.10     42
                                                                                                   % of price)
                                                                                                   Travel time to work                                             3.62     47
                                                                                                   Electricity prices per million BTU                              5.20     31
                                                                                                   Median monthly housing costs                                    4.74     33



                         Human resources subindex                                    4.87    31    Human resources subindex                                        4.87     31
                         % of population enrolled in degree-granting institutions    5.57    13    Unemployment rate, not seasonally adjusted                      3.70     45

                         Rate of nonfederal physicians per 100,000 inhabitants       5.26    15    Infant mortality rate, deaths per 1000 live births              4.70     34

                                                                                                   % of students at or above proficient in mathematics, grade 4    4.73     32
                                                                                                   - public schools




                         Technology subindex                                         5.00    24    Technology subindex                                             5.00     24
                         NIH support to institutions per capita                      4.92    19    Academic R&D per $1,000 GSP                                     4.54     35
                         Patents, per 100,000 inhabitants                            5.08    18
                         Science & Engineering grad. students 100,000                5.79    11
                         inhabitants
                         Scientists and engineers as % of labor force                5.06    18




                         Business incubation subindex                                4.71    39    Business incubation subindex                                    4.71     39
                         Bank deposits per capita                                    5.04     7    Employer firm births per 100,000 inhabitants                    4.43     36
                         IPO, % of GSP                                               6.04     6    % of labor force that is represented by unions                  4.51     34
                                                                                                   Minimum wage                                                    3.54     46




                         Openness subindex                                           5.34    10    Openness subindex                                               5.34     10
                         Exports per capita, dollars                                 5.33    13
                         % of population born abroad                                 5.89    10

                         Environmental policy subindex                               4.91    30    Environmental policy subindex                                   4.91     30
                         Air Quality Index                                           5.52    16    Toxic release inventory, pounds per 1000 sq. miles              4.65     35
                                                                                                   Carbon emission per 1000 sq miles                               4.56     40
           State Index




                           Page 28 /                                                 Eighth Annual BHI State Competitiveness Report
Indiana




          INDIANA                                                                                                                      Index    Overall Rank




                                                                                                                                                               BHI
                                                                                                                                         4.37      36
                                  COMPETITIVE ADVANTAGES                                                  COMPETITIVE DISADVANTAGES

                         Subindex/Variable                         Index   Rank                     Subindex/Variable                           Index   Rank
          Government and fiscal policy subindex                     5.54    6     Government and fiscal policy subindex                          5.54     6
          Workers’ compensation premium rates                       6.84     2
          Bond rating: composite                                    5.66    12
          Budget deficit, % of GSP                                  5.44    14
          Full-time-equivalent state and local government           5.48    16
          employees per 100 residents



          Security subindex                                         4.72    34    Security subindex                                              4.72     34
                                                                                  The BGA Integrity Index                                        4.40     37




          Infrastructure subindex                                   5.11    18    Infrastructure subindex                                        5.11     18
          Travel time to work                                       5.18    19    High-speed lines per 1000                                      4.57     35
          Electricity prices per million BTU                        5.70    10    Air passengers per capita                                      4.35     42
          Median monthly housing costs                              5.65    17




          Human resources subindex                                  4.90    30    Human resources subindex                                       4.90     30
          % of population without health insurance                  5.60    16    Unemployment rate, not seasonally adjusted                     4.41     35
          % of students at or above proficient in mathematics,      5.87     9    Infant mortality rate, deaths per 1000 live births             4.29     39
          grade 4 - public schools
                                                                                  Rate of nonfederal physicians per 100,000 inhabitants          4.24     38




          Technology subindex                                       4.61    35    Technology subindex                                            4.61     35
                                                                                  NIH support to institutions per capita                         4.50     34
                                                                                  Scientists and engineers as % of labor force                   4.16     41
                                                                                  Employment in high-tech industry as % of total                 3.97     45
                                                                                  employment




          Business incubation subindex                              4.71    40    Business incubation subindex                                   4.71     40
          Minimum wage                                              5.52     7    Bank deposits per capita                                       4.58     45
                                                                                  Venture capital per capita                                     4.51     33
                                                                                  Employer firm births per 100,000 inhabitants                   4.10     44




          Openness subindex                                         4.98    20    Openness subindex                                              4.98     20
          Exports per capita, dollars                               5.49    10    % of population born abroad                                    4.32     34
          Incoming foreign direct investment per capita, dollars    5.13     6



          Environmental policy subindex                             3.45    48    Environmental policy subindex                                  3.45     48
                                                                                  Toxic release inventory, pounds per 1000 sq. miles             1.65     50
                                                                                  Carbon emission per 1000 sq miles                              3.73     44
                                                                                                                                                               State Index




                        Eighth Annual BHI State Competitiveness Report                                                                          / Page 29
BHI           IOWA                                                                                                                         Index    Overall Rank
                                                                                                                                             5.74      12
                                      COMPETITIVE ADVANTAGES                                                   COMPETITIVE DISADVANTAGES

                             Subindex/Variable                           Index   Rank                    Subindex/Variable                          Index   Rank
              Government and fiscal policy subindex                       5.15    19    Government and fiscal policy subindex                        5.15     19
              State and local taxes per capita /income per capita         5.04    20    Average benefit per first payment for unemployed             4.71     32

              Workers’ compensation premium rates                         5.79    11    Full-time-equivalent state and local government              4.29     41
                                                                                        employees per 100 residents
              Bond rating: composite                                      5.66    12
              Budget deficit, % of GSP                                    5.42    16



              Security subindex                                           5.46    14    Security subindex                                            5.46     14
              Crime index, per 100,000 inhabitants                        5.75    16    The BGA Integrity Index                                      3.85     43
              Crime index change 2006-2007, %                             5.89     8
              Murder index, per 100,000 inhabitants                       6.36     2

              Infrastructure subindex                                     5.42    6     Infrastructure subindex                                      5.42     6
              Telephone penetration (combined Fed/state/local             5.56    14    High-speed lines per 1000                                    4.45     37
              taxes as % of price)
              Travel time to work                                         6.44    6     Air passengers per capita                                    4.25     46
              Electricity prices per million BTU                          5.75    9
              Median monthly housing costs                                6.09    5



              Human resources subindex                                    5.89    5     Human resources subindex                                     5.89     5
              % of population without health insurance                    6.13    6     Rate of nonfederal physicians per 100,000 inhabitants        4.23     39

              % of population aged 25 and over that graduated from        5.98    8
              high school
              Unemployment rate, not seasonally adjusted                  5.82    11
              % of population enrolled in degree-granting institutions    6.69     4

              % of adults who are in the labor force                      6.62     5
              Infant mortality rate, deaths per 1000 live births          6.14     7
              % of students at or above proficient in mathematics,        5.49    16
              grade 4 - public schools

              Technology subindex                                         5.00    25    Technology subindex                                          5.00     25
              Academic R&D per $1,000 GSP                                 5.63    11    Scientists and engineers as % of labor force                 4.29     37
              NIH support to institutions per capita                      5.08    17    Employment in high-tech industry as % of total               4.22     35
                                                                                        employment
              Science & Engineering grad. students 100,000                5.41    15
              inhabitants
              S&E degrees awarded per 100,000 inhabitants                 5.60    12




              Business incubation subindex                                4.45    46    Business incubation subindex                                 4.45     46
                                                                                        Venture capital per capita                                   4.43     45
                                                                                        Employer firm births per 100,000 inhabitants                 3.73     49
                                                                                        IPO, % of GSP                                                4.50     33
                                                                                        Minimum wage                                                 4.37     37



              Openness subindex                                           4.64    37    Openness subindex                                            4.64     37
                                                                                        Incoming foreign direct investment per capita, dollars       4.67     39
                                                                                        % of population born abroad                                  4.27     37

              Environmental policy subindex                               5.52    16    Environmental policy subindex                                5.52     16
              Air Quality Index                                           5.51    17
State Index




               Page 30 /                                                   Eighth Annual BHI State Competitiveness Report
KANSAS                                                                                                                         Index    Overall Rank




                                                                                                                                                       BHI
                                                                                                                                 5.62      18
                        COMPETITIVE ADVANTAGES                                                    COMPETITIVE DISADVANTAGES

               Subindex/Variable                           Index   Rank                     Subindex/Variable                           Index   Rank
Government and fiscal policy subindex                       4.99    31    Government and fiscal policy subindex                          4.99     31
Workers’ compensation premium rates                         5.94    10    Average benefit per first payment for unemployed               4.43     41
Bond rating: composite                                      5.66    12    Full-time-equivalent state and local government                3.73     48
                                                                          employees per 100 residents
Budget deficit, % of GSP                                    5.40    17




Security subindex                                           4.90    30    Security subindex                                              4.90     30
The BGA Integrity Index                                     5.30    20    Crime index, per 100,000 inhabitants                           4.36     35
                                                                          Crime index change 2006-2007, %                                4.59     31



Infrastructure subindex                                     5.21    12    Infrastructure subindex                                        5.21     12
Travel time to work                                         6.29     8    Telephone penetration (combined Fed/state/local taxes as       4.54     37
                                                                          % of price)
Electricity prices per million BTU                          5.59    13    Air passengers per capita                                      4.15     48
Median monthly housing costs                                5.74    13




Human resources subindex                                    5.55    12    Human resources subindex                                       5.55     12
% of population aged 25 and over that graduated from        5.84    13    Infant mortality rate, deaths per 1000 live births             4.73     33
high school
Unemployment rate, not seasonally adjusted                  5.54    17    Rate of nonfederal physicians per 100,000 inhabitants          4.55     32

% of population enrolled in degree-granting institutions    6.01    7

% of adults who are in the labor force                      5.96    10
% of students at or above proficient in mathematics,        6.51     2
grade 4 - public schools




Technology subindex                                         5.02    23    Technology subindex                                            5.02     23
Science & Engineering grad. students 100,000                6.10     7    Academic R&D per $1,000 GSP                                    4.59     33
inhabitants
S&E degrees awarded per 100,000 inhabitants                 5.23    17    NIH support to institutions per capita                         4.47     36
Scientists and engineers as % of labor force                5.01    19
Employment in high-tech industry as % of total              5.15    17
employment




Business incubation subindex                                4.94    25    Business incubation subindex                                   4.94     25
IPO, % of GSP                                               4.92    17    Venture capital per capita                                     4.41     46
% of labor force that is represented by unions              5.69    15    Employer firm births per 100,000 inhabitants                   4.32     39
Minimum wage                                                5.52     7




Openness subindex                                           4.85    25    Openness subindex                                              4.85     25
Exports per capita, dollars                                 5.27    16    Incoming foreign direct investment per capita, dollars         4.66     44



Environmental policy subindex                               5.91    6     Environmental policy subindex                                  5.91     6
Toxic release inventory, pounds per 1000 sq. miles          5.76    12

Carbon emission per 1000 sq miles                           5.68    16
Air Quality Index                                           6.31     4
                                                                                                                                                       State Index




         Eighth Annual BHI State Competitiveness Report                                                                                 / Page 31
BHI           KENTUCKY                                                                                                                  Index      Overall Rank
                                                                                                                                          4.21        38
                                       COMPETITIVE ADVANTAGES                                                COMPETITIVE DISADVANTAGES

                              Subindex/Variable                        Index   Rank                    Subindex/Variable                           Index    Rank
              Government and fiscal policy subindex                     4.58    44    Government and fiscal policy subindex                         4.58     44
                                                                                      Workers’ compensation premium rates                           3.95     43
                                                                                      Bond rating: composite                                        4.33     33
                                                                                      Budget deficit, % of GSP                                      4.67     36
                                                                                      Average benefit per first payment for unemployed              4.75     31
                                                                                      Full-time-equivalent state and local government employees     4.83     34
                                                                                      per 100 residents

              Security subindex                                         5.31    20    Security subindex                                             5.31     20
              Crime index, per 100,000 inhabitants                      5.86    14    Crime index change 2006-2007, %                               4.24     40
              The BGA Integrity Index                                   6.13     7



              Infrastructure subindex                                   5.15    15    Infrastructure subindex                                       5.15     15
              Air passengers per capita                                 5.01    15    Telephone penetration (combined Fed/state/local taxes as      4.75     32
                                                                                      % of price)
              Travel time to work                                       5.33    17    High-speed lines per 1000                                     3.77     45
              Electricity prices per million BTU                        5.94     4
              Median monthly housing costs                              6.11     4



              Human resources subindex                                  4.36    42    Human resources subindex                                      4.36     42
                                                                                      % of population aged 25 and over that graduated from high     3.39     47
                                                                                      school
                                                                                      Unemployment rate, not seasonally adjusted                    4.27     38
                                                                                      % of adults who are in the labor force                        3.79     46
                                                                                      Rate of nonfederal physicians per 100,000 inhabitants         4.39     35

                                                                                      % of students at or above proficient in mathematics, grade    3.85     43
                                                                                      4 - public schools




              Technology subindex                                       4.23    44    Technology subindex                                           4.23     44
                                                                                      Academic R&D per $1,000 GSP                                   4.64     31
                                                                                      NIH support to institutions per capita                        4.50     33
                                                                                      Patents, per 100,000 inhabitants                              4.25     40
                                                                                      Science & Engineering grad. students 100,000 inhabitants      4.23     40

                                                                                      S&E degrees awarded per 100,000 inhabitants                   4.05     44
                                                                                      Scientists and engineers as % of labor force                  3.91     45
                                                                                      Employment in high-tech industry as % of total employment     4.05     42

              Business incubation subindex                              4.84    34    Business incubation subindex                                  4.84     34
              Venture capital per capita                                5.07    14    Bank deposits per capita                                      4.62     41
              Minimum wage                                              5.52     7    Employer firm births per 100,000 inhabitants                  3.90     46




              Openness subindex                                         5.02    19    Openness subindex                                             5.02     19
              Exports per capita, dollars                               5.81     6    % of population born abroad                                   4.04     45
              Incoming foreign direct investment per capita, dollars    5.22     4



              Environmental policy subindex                             4.81    33    Environmental policy subindex                                 4.81     33
              Air Quality Index                                         5.37    18    Toxic release inventory, pounds per 1000 sq. miles            4.37     40
                                                                                      Carbon emission per 1000 sq miles                             4.69     36
State Index




              Page 32 /                                                Eighth Annual BHI State Competitiveness Report
LOUISIANA                                                                                                                 Index      Overall Rank




                                                                                                                                                    BHI
                                                                                                                            3.30        49
                       COMPETITIVE ADVANTAGES                                                   COMPETITIVE DISADVANTAGES

               Subindex/Variable                         Index   Rank                    Subindex/Variable                           Index   Rank
Government and fiscal policy subindex                     4.89    33    Government and fiscal policy subindex                         4.89     33
State and local taxes per capita /income per capita       5.83     7    Workers’ compensation premium rates                           4.28     39

Budget deficit, % of GSP                                  6.60    3     Bond rating: composite                                        2.10     50
Average benefit per first payment for unemployed          6.51    4     Full-time-equivalent state and local government               4.05     42
                                                                        employees per 100 residents




Security subindex                                         3.01    50    Security subindex                                             3.01     50
                                                                        Crime index, per 100,000 inhabitants                          3.56     47
                                                                        Crime index change 2006-2007, %                               3.41     48
                                                                        Murder index, per 100,000 inhabitants                         1.47     50
                                                                        The BGA Integrity Index                                       3.59     46
Infrastructure subindex                                   4.97    29    Infrastructure subindex                                       4.97     29
Telephone penetration (combined Fed/state/local           5.88     8    High-speed lines per 1000                                     4.14     41
taxes as % of price)
                                                                        Air passengers per capita                                     4.51     32
                                                                        Travel time to work                                           4.56     34
                                                                        Electricity prices per million BTU                            5.19     32



Human resources subindex                                  3.79    49    Human resources subindex                                      3.79     49
                                                                        % of population without health insurance                      3.82     46
                                                                        % of population aged 25 and over that graduated from          3.33     48
                                                                        high school
                                                                        % of population enrolled in degree-granting institutions      3.50     49

                                                                        % of adults who are in the labor force                        3.54     48
                                                                        Infant mortality rate, deaths per 1000 live births            2.86     49
                                                                        % of students at or above proficient in mathematics, grade    3.09     48
                                                                        4 - public schools



Technology subindex                                       4.21    45    Technology subindex                                           4.21     45
                                                                        Academic R&D per $1,000 GSP                                   4.21     38
                                                                        NIH support to institutions per capita                        4.48     35
                                                                        Patents, per 100,000 inhabitants                              4.01     45
                                                                        Science & Engineering grad. students 100,000                  4.59     31
                                                                        inhabitants
                                                                        S&E degrees awarded per 100,000 inhabitants                   4.46     36
                                                                        Scientists and engineers as % of labor force                  3.70     48
                                                                        Employment in high-tech industry as % of total                3.99     43
                                                                        employment
Business incubation subindex                              4.94    24    Business incubation subindex                                  4.94     24
% of labor force that is represented by unions            6.09     8    Venture capital per capita                                    4.48     37
Minimum wage                                              5.52     7    Employer firm births per 100,000 inhabitants                  4.40     37
                                                                        IPO, % of GSP                                                 4.48     35




Openness subindex                                         5.54    7     Openness subindex                                             5.54     7
Exports per capita, dollars                               7.22    2     % of population born abroad                                   4.17     42
Incoming foreign direct investment per capita, dollars    5.23    3



Environmental policy subindex                             4.90    31    Environmental policy subindex                                 4.90     31
Air Quality Index                                         5.58    14    Toxic release inventory, pounds per 1000 sq. miles            4.46     39
                                                                        Carbon emission per 1000 sq miles                             4.65     37
                                                                                                                                                    State Index




      Eighth Annual BHI State Competitiveness Report                                                                                 / Page 33
Maine




        BHI           MAINE                                                                                                                         Index     Overall Rank
                                                                                                                                                       4.70           26
                                              COMPETITIVE ADVANTAGES                                                     COMPETITIVE DISADVANTAGES

                                     Subindex/Variable                         Index      Rank                     Subindex/Variable                          Index        Rank
                      Government and fiscal policy subindex                     4.53       45    Government and fiscal policy subindex                         4.53         45
                      Average benefit per first payment for unemployed          5.44       14    State and local taxes per capita /income per capita           4.43         36

                                                                                                 Workers’ compensation premium rates                           3.81         45
                                                                                                 Bond rating: composite                                        3.88         44
                                                                                                 Full-time-equivalent state and local government employees     4.74         37
                                                                                                 per 100 residents



                      Security subindex                                         5.70       5     Security subindex                                             5.70         5
                      Crime index, per 100,000 inhabitants                      6.17        7
                      Crime index change 2006-2007, %                           5.34       19
                      Murder index, per 100,000 inhabitants                     6.21        4

                      Infrastructure subindex                                   4.82       35    Infrastructure subindex                                       4.82         35
                      Telephone penetration (combined Fed/state/local taxes     5.58       13    High-speed lines per 1000                                     4.31         39
                      as % of price)
                      Travel time to work                                       5.18       19    Air passengers per capita                                     4.40         40
                      Median monthly housing costs                              5.57       20    Electricity prices per million BTU                            3.89         43




                      Human resources subindex                                  5.43       14    Human resources subindex                                      5.43         14
                      % of population without health insurance                  6.25        5    % of population enrolled in degree-granting institutions      4.07         42

                      % of population aged 25 and over that graduated from      5.93       10
                      high school
                      Unemployment rate, not seasonally adjusted                5.54       17
                      % of adults who are in the labor force                    5.38       17
                      Rate of nonfederal physicians per 100,000 inhabitants     5.84        9

                      % of students at or above proficient in mathematics,      5.37       18
                      grade 4 - public schools



                      Technology subindex                                       4.16       46    Technology subindex                                           4.16         46
                                                                                                 Academic R&D per $1,000 GSP                                   4.17         41
                                                                                                 Patents, per 100,000 inhabitants                              4.14         42
                                                                                                 Science & Engineering grad. students 100,000 inhabitants      3.06         50

                                                                                                 Scientists and engineers as % of labor force                  3.94         44
                                                                                                 Employment in high-tech industry as % of total employment     4.18         37




                      Business incubation subindex                              4.87       28    Business incubation subindex                                  4.87         28
                      Employer firm births per 100,000 inhabitants              5.27       15    Bank deposits per capita                                      4.63         40
                      IPO, % of GSP                                             5.65        8    Minimum wage                                                  4.37         37




                      Openness subindex                                         4.49       43    Openness subindex                                             4.49         43
                      Incoming foreign direct investment per capita, dollars    4.94       11    Exports per capita, dollars                                   4.34         39

                                                                                                 % of population born abroad                                   4.19         40

                      Environmental policy subindex                             5.92       5     Environmental policy subindex                                 5.92         5
                      Toxic release inventory, pounds per 1000 sq. miles        5.78       10

                      Carbon emission per 1000 sq miles                         5.77       11
                      Air Quality Index                                         6.22        7
        State Index




                        Page 34 /                                                      Eighth Annual BHI State Competitiveness Report
MARYLAND                                                                                                                    Index     Overall Rank




                                                                                                                                                      BHI
                                                                                                                              4.66       28
                       COMPETITIVE ADVANTAGES                                                  COMPETITIVE DISADVANTAGES

               Subindex/Variable                        Index   Rank                     Subindex/Variable                            Index   Rank
Government and fiscal policy subindex                    4.99    28    Government and fiscal policy subindex                           4.99      28
Workers’ compensation premium rates                      6.02     8    State and local taxes per capita /income per capita             3.73      47
Bond rating: composite                                   6.55     1    Budget deficit, % of GSP                                        3.48      49
Full-time-equivalent state and local government          5.58    12    Average benefit per first payment for unemployed                4.59      35
employees per 100 residents




Security subindex                                        4.69    35    Security subindex                                               4.69      35
The BGA Integrity Index                                  6.32     5    Crime index, per 100,000 inhabitants                            4.43      34
                                                                       Murder index, per 100,000 inhabitants                           3.13      49



Infrastructure subindex                                  4.33    49    Infrastructure subindex                                         4.33      49
High-speed lines per 1000                                5.96    10    Telephone penetration (combined Fed/state/local taxes as        4.71      33
                                                                       % of price)
                                                                       Travel time to work                                             2.79      49
                                                                       Electricity prices per million BTU                              4.31      40
                                                                       Median monthly housing costs                                    3.39      47



Human resources subindex                                 5.41    15    Human resources subindex                                        5.41      15
Unemployment rate, not seasonally adjusted               5.68    14    Infant mortality rate, deaths per 1000 live births              4.78      31
% of adults who are in the labor force                   5.58    14
Rate of nonfederal physicians per 100,000 inhabitants    7.02     3




Technology subindex                                      6.71    2     Technology subindex                                             6.71      2
Academic R&D per $1,000 GSP                              9.20    1
NIH support to institutions per capita                   7.03    2
Science & Engineering grad. students 100,000             5.96    8
inhabitants
S&E degrees awarded per 100,000 inhabitants              6.08    6
Scientists and engineers as % of labor force             6.96    3
Employment in high-tech industry as % of total           6.82    4
employment

Business incubation subindex                             5.15    15    Business incubation subindex                                    5.15      15
Venture capital per capita                               5.38     8    Bank deposits per capita                                        4.69      31
Employer firm births per 100,000 inhabitants             5.72    10    % of labor force that is represented by unions                  4.64      32
IPO, % of GSP                                            4.99    16
Minimum wage                                             5.52     7



Openness subindex                                        4.79    29    Openness subindex                                               4.79      29
% of population born abroad                              5.66    13    Exports per capita, dollars                                     4.05      43
                                                                       Incoming foreign direct investment per capita, dollars          4.66      42

Environmental policy subindex                            3.72    46    Environmental policy subindex                                   3.72      46
                                                                       Toxic release inventory, pounds per 1000 sq. miles              3.80      46
                                                                       Carbon emission per 1000 sq miles                               3.68      45
                                                                       Air Quality Index                                               3.67      46
                                                                                                                                                      State Index




         Eighth Annual BHI State Competitiveness Report                                                                              / Page 35
BHI           MASSACHUSETTS                                                                                                                Index    Overall Rank
                                                                                                                                             7.33        1
                                      COMPETITIVE ADVANTAGES                                                    COMPETITIVE DISADVANTAGES

                             Subindex/Variable                           Index   Rank                    Subindex/Variable                          Index   Rank
              Government and fiscal policy subindex                       4.88    34    Government and fiscal policy subindex                        4.88     34
              Workers’ compensation premium rates                         6.58     3    Budget deficit, % of GSP                                     4.61     37
              Full-time-equivalent state and local government             5.62    11    Average benefit per first payment for unemployed             2.85     49
              employees per 100 residents




              Security subindex                                           5.74     3    Security subindex                                            5.74     3
              Crime index, per 100,000 inhabitants                        6.08     9
              Crime index change 2006-2007, %                             5.49    15
              Murder index, per 100,000 inhabitants                       5.72    14
              The BGA Integrity Index                                     5.66    17
              Infrastructure subindex                                     4.72    41    Infrastructure subindex                                      4.72     41
              Telephone penetration (combined Fed/state/local             6.03     5    Travel time to work                                          3.85     46
              taxes as % of price)
              High-speed lines per 1000                                   6.31     5    Electricity prices per million BTU                           3.46     47
              Air passengers per capita                                   4.94    20    Median monthly housing costs                                 3.73     45




              Human resources subindex                                    6.41    1     Human resources subindex                                     6.41     1
              % of population without health insurance                    7.10     1
              % of population aged 25 and over that graduated from        5.65    17
              high school
              % of population enrolled in degree-granting institutions    5.93    10

              % of adults who are in the labor force                      5.58    14
              Infant mortality rate, deaths per 1000 live births          6.28     4
              Rate of nonfederal physicians per 100,000 inhabitants       8.06     1

              % of students at or above proficient in mathematics,        7.39    1
              grade 4 - public schools

              Technology subindex                                        7.86     1     Technology subindex                                          7.86     1
              Academic R&D per $1,000 GSP                                 6.85    2
              NIH support to institutions per capita                     10.00    1
              Patents, per 100,000 inhabitants                            6.55    6
              Science & Engineering grad. students 100,000                9.02    1
              inhabitants
              S&E degrees awarded per 100,000 inhabitants                 7.79    2
              Scientists and engineers as % of labor force                7.55    2
              Employment in high-tech industry as % of total              7.22    2
              employment
              Business incubation subindex                               5.88     3     Business incubation subindex                                 5.88     3
              Bank deposits per capita                                    5.10    6     Employer firm births per 100,000 inhabitants                 4.57     31
              Venture capital per capita                                 10.00    1     % of labor force that is represented by unions               4.73     31
              IPO, % of GSP                                               7.77    2     Minimum wage                                                 3.13     48




              Openness subindex                                           5.39    9     Openness subindex                                            5.39     9
              Exports per capita, dollars                                 5.40    11
              Incoming foreign direct investment per capita, dollars      4.83    20

              % of population born abroad                                 5.95     9
              Environmental policy subindex                               4.28    43    Environmental policy subindex                                4.28     43
                                                                                        Carbon emission per 1000 sq miles                            3.21     48
                                                                                        Air Quality Index                                            4.11     42
State Index




                Page 36 /                                                    Eighth Annual BHI State Competitiveness Report
MICHIGAN                                                                                                                       Index     Overall Rank




                                                                                                                                                         BHI
                                                                                                                                 4.60       30
                        COMPETITIVE ADVANTAGES                                                     COMPETITIVE DISADVANTAGES

               Subindex/Variable                           Index   Rank                     Subindex/Variable                            Index    Rank
Government and fiscal policy subindex                       5.01    26    Government and fiscal policy subindex                           5.01     26
Workers’ compensation premium rates                         5.30    20    Budget deficit, % of GSP                                        4.32     41
Full-time-equivalent state and local government             6.03     6    Average benefit per first payment for unemployed                4.68     33
employees per 100 residents




Security subindex                                           4.89    31    Security subindex                                               4.89     31
Crime index change 2006-2007, %                             5.59    11    Murder index, per 100,000 inhabitants                           4.29     40




Infrastructure subindex                                     5.12    17    Infrastructure subindex                                         5.12     17
Telephone penetration (combined Fed/state/local taxes       5.77    10    High-speed lines per 1000                                       4.70     33
as % of price)
                                                                          Electricity prices per million BTU                              5.18     33




Human resources subindex                                    4.68    33    Human resources subindex                                        4.68     33
% of population without health insurance                    5.55    17    Unemployment rate, not seasonally adjusted                      2.86     49
% of population enrolled in degree-granting institutions    5.26    18    % of adults who are in the labor force                          3.92     44

Rate of nonfederal physicians per 100,000 inhabitants       5.40    12    Infant mortality rate, deaths per 1000 live births              4.35     38

                                                                          % of students at or above proficient in mathematics, grade 4    4.73     32
                                                                          - public schools




Technology subindex                                         5.21    18    Technology subindex                                             5.21     18
Academic R&D per $1,000 GSP                                 5.09    18
NIH support to institutions per capita                      4.90    20
Patents, per 100,000 inhabitants                            5.45    12
Scientists and engineers as % of labor force                5.90     9
Employment in high-tech industry as % of total              5.11    20
employment



Business incubation subindex                                4.25    49    Business incubation subindex                                    4.25     49
                                                                          Bank deposits per capita                                        4.63     38
                                                                          Venture capital per capita                                      4.47     38
                                                                          Employer firm births per 100,000 inhabitants                    4.11     43
                                                                          % of labor force that is represented by unions                  3.53     45
                                                                          Minimum wage                                                    4.12     42

Openness subindex                                           5.08    18    Openness subindex                                               5.08     18
Exports per capita, dollars                                 5.68     9
Incoming foreign direct investment per capita, dollars      4.93    12



Environmental policy subindex                               5.13    24    Environmental policy subindex                                   5.13     24
                                                                          Air Quality Index                                               4.76     33
                                                                                                                                                         State Index




             Eighth Annual BHI State Competitiveness Report                                                                              / Page 37
BHI           MINNESOTA                                                                                                                       Index    Overall Rank
                                                                                                                                                6.17        7
                                       COMPETITIVE ADVANTAGES                                                   COMPETITIVE DISADVANTAGES

                              Subindex/Variable                          Index   Rank                    Subindex/Variable                             Index    Rank
              Government and fiscal policy subindex                       5.00    27    Government and fiscal policy subindex                           5.00     27
              Bond rating: composite                                      6.10     8    State and local taxes per capita /income per capita             4.25     39
              Budget deficit, % of GSP                                    5.39    18    Average benefit per first payment for unemployed                3.80     45
              Full-time-equivalent state and local government             5.48    15
              employees per 100 residents




              Security subindex                                           5.51    12    Security subindex                                               5.51     12
              Crime index, per 100,000 inhabitants                        5.28    20
              Murder index, per 100,000 inhabitants                       5.99    11
              The BGA Integrity Index                                     5.92    11

              Infrastructure subindex                                     5.25    8     Infrastructure subindex                                         5.25     8
              Air passengers per capita                                   5.40    10
              Travel time to work                                         5.30    18
              Electricity prices per million BTU                          5.52    17




              Human resources subindex                                    6.03    2     Human resources subindex                                        6.03     2
              % of population without health insurance                    6.38    4
              % of population aged 25 and over that graduated from        6.36    2
              high school
              % of population enrolled in degree-granting institutions    6.09    6

              % of adults who are in the labor force                      6.64     3
              Infant mortality rate, deaths per 1000 live births          6.31     3
              Rate of nonfederal physicians per 100,000 inhabitants       5.35    13

              % of students at or above proficient in mathematics,        6.38    5
              grade 4 - public schools

              Technology subindex                                         5.59    10    Technology subindex                                             5.59     10
              NIH support to institutions per capita                      5.44    11    Academic R&D per $1,000 GSP                                     4.11     43
              Patents, per 100,000 inhabitants                            6.39     7
              Science & Engineering grad. students 100,000                6.57     2
              inhabitants
              S&E degrees awarded per 100,000 inhabitants                 5.16    20
              Scientists and engineers as % of labor force                5.95     8
              Employment in high-tech industry as % of total              5.51    14
              employment

              Business incubation subindex                                4.87    30    Business incubation subindex                                    4.87     30
              Bank deposits per capita                                    4.82    19    Employer firm births per 100,000 inhabitants                    4.47     35
              Minimum wage                                                6.18     3    % of labor force that is represented by unions                  4.18     42




              Openness subindex                                           4.84    26    Openness subindex                                               4.84     26
                                                                                        Incoming foreign direct investment per capita, dollars          4.67     40



              Environmental policy subindex                               5.48    18    Environmental policy subindex                                   5.48     18
              Toxic release inventory, pounds per 1000 sq. miles          5.79     9

              Carbon emission per 1000 sq miles                           5.60    17
State Index




                Page 38 /                                                  Eighth Annual BHI State Competitiveness Report
MISSISSIPPI                                                                                                            Index      Overall Rank




                                                                                                                                                 BHI
                                                                                                                         3.12        50
                       COMPETITIVE ADVANTAGES                                               COMPETITIVE DISADVANTAGES

               Subindex/Variable                      Index   Rank                    Subindex/Variable                           Index   Rank
Government and fiscal policy subindex                  5.36    10    Government and fiscal policy subindex                         5.36     10
State and local taxes per capita /income per capita    5.39    15    Bond rating: composite                                        4.33     33

Budget deficit, % of GSP                               6.31    4     Full-time-equivalent state and local government               3.97     45
                                                                     employees per 100 residents
Average benefit per first payment for unemployed       7.14    1




Security subindex                                      4.51    42    Security subindex                                             4.51     42
                                                                     Crime index change 2006-2007, %                               4.41     37
                                                                     Murder index, per 100,000 inhabitants                         4.14     42
                                                                     The BGA Integrity Index                                       4.41     36

Infrastructure subindex                                4.64    44    Infrastructure subindex                                       4.64     44
Median monthly housing costs                           5.83    10    High-speed lines per 1000                                     2.55     50
                                                                     Air passengers per capita                                     4.21     47




Human resources subindex                               3.18    50    Human resources subindex                                      3.18     50
                                                                     % of population without health insurance                      3.75     47
                                                                     % of population aged 25 and over that graduated from          2.95     50
                                                                     high school
                                                                     Unemployment rate, not seasonally adjusted                    3.42     47
                                                                     % of population enrolled in degree-granting institutions      4.26     38

                                                                     % of adults who are in the labor force                        2.83     49
                                                                     Infant mortality rate, deaths per 1000 live births            1.96     50
                                                                     Rate of nonfederal physicians per 100,000 inhabitants         3.55     50

                                                                     % of students at or above proficient in mathematics, grade    2.71     50
                                                                     4 - public schools
Technology subindex                                    4.09    48    Technology subindex                                           4.09     48
Academic R&D per $1,000 GSP                            5.40    15    NIH support to institutions per capita                        4.08     48
                                                                     Patents, per 100,000 inhabitants                              3.98     48
                                                                     Science & Engineering grad. students 100,000                  4.08     43
                                                                     inhabitants
                                                                     S&E degrees awarded per 100,000 inhabitants                   3.70     47
                                                                     Scientists and engineers as % of labor force                  3.65     49
                                                                     Employment in high-tech industry as % of total                3.71     49
                                                                     employment

Business incubation subindex                           4.82    35    Business incubation subindex                                  4.82     35
% of labor force that is represented by unions         5.66    16    Bank deposits per capita                                      4.59     43
Minimum wage                                           5.52     7    Employer firm births per 100,000 inhabitants                  4.15     42
                                                                     IPO, % of GSP                                                 4.43     38




Openness subindex                                      4.25    48    Openness subindex                                             4.25     48
                                                                     Exports per capita, dollars                                   4.16     41
                                                                     Incoming foreign direct investment per capita, dollars        4.68     36
                                                                     % of population born abroad                                   3.91     48
Environmental policy subindex                          5.21    22    Environmental policy subindex                                 5.21     22
Carbon emission per 1000 sq miles                      5.53    20
                                                                                                                                                 State Index




           Eighth Annual BHI State Competitiveness Report                                                                           / Page 39
BHI           MISSOURI                                                                                                                       Index    Overall Rank
                                                                                                                                               4.61      29
                                      COMPETITIVE ADVANTAGES                                                    COMPETITIVE DISADVANTAGES

                             Subindex/Variable                           Index   Rank                     Subindex/Variable                           Index   Rank
              Government and fiscal policy subindex                       5.49    7     Government and fiscal policy subindex                          5.49     7
              State and local taxes per capita /income per capita         5.13    18

              Bond rating: composite                                      6.55     1
              Average benefit per first payment for unemployed            5.85    12




              Security subindex                                           4.60    40    Security subindex                                              4.60     40
                                                                                        Crime index, per 100,000 inhabitants                           4.23     36
                                                                                        Murder index, per 100,000 inhabitants                          4.37     37



              Infrastructure subindex                                     4.86    34    Infrastructure subindex                                        4.86     34
              Air passengers per capita                                   4.96    18    Telephone penetration (combined Fed/state/local taxes as       3.30     46
                                                                                        % of price)
              Electricity prices per million BTU                          5.84     6    High-speed lines per 1000                                      4.31     38
              Median monthly housing costs                                5.77    12




              Human resources subindex                                    4.93    27    Human resources subindex                                       4.93     27
              % of population without health insurance                    5.30    20    % of population aged 25 and over that graduated from           4.89     31
                                                                                        high school
              % of population enrolled in degree-granting institutions    5.51    15    Unemployment rate, not seasonally adjusted                     4.27     38

                                                                                        Infant mortality rate, deaths per 1000 live births             4.64     36




              Technology subindex                                         4.90    28    Technology subindex                                            4.90     28
              Academic R&D per $1,000 GSP                                 5.21    17    Patents, per 100,000 inhabitants                               4.39     33
              NIH support to institutions per capita                      5.35    12    Employment in high-tech industry as % of total                 4.63     31
                                                                                        employment
              S&E degrees awarded per 100,000 inhabitants                 5.20    18




              Business incubation subindex                                4.85    32    Business incubation subindex                                   4.85     32
              IPO, % of GSP                                               4.73    20    Employer firm births per 100,000 inhabitants                   4.51     34




              Openness subindex                                           4.48    44    Openness subindex                                              4.48     44
                                                                                        Exports per capita, dollars                                    4.45     34
                                                                                        % of population born abroad                                    4.21     39

              Environmental policy subindex                               4.99    29    Environmental policy subindex                                  4.99     29
                                                                                        Toxic release inventory, pounds per 1000 sq. miles             4.88     32
                                                                                        Air Quality Index                                              4.78     32
State Index




                Page 40 /                                                 Eighth Annual BHI State Competitiveness Report
MONTANA                                                                                                                 Index    Overall Rank




                                                                                                                                                BHI
                                                                                                                          5.88      10
                       COMPETITIVE ADVANTAGES                                                COMPETITIVE DISADVANTAGES

               Subindex/Variable                       Index   Rank                    Subindex/Variable                         Index   Rank
Government and fiscal policy subindex                   4.91    32    Government and fiscal policy subindex                       4.91     32
State and local taxes per capita /income per capita     5.65    11    Workers’ compensation premium rates                         3.04     49

Budget deficit, % of GSP                                6.13     6    Bond rating: composite                                      4.33     33
Average benefit per first payment for unemployed        5.39    15




Security subindex                                       5.69    6     Security subindex                                           5.69     6
Crime index, per 100,000 inhabitants                    5.59    17    The BGA Integrity Index                                     3.78     44
Crime index change 2006-2007, %                         7.14     2
Murder index, per 100,000 inhabitants                   6.25     3

Infrastructure subindex                                 5.71    2     Infrastructure subindex                                     5.71     2
Telephone penetration (combined Fed/state/local         5.94    6
taxes as % of price)
High-speed lines per 1000                               5.61    14
Travel time to work                                     6.64     3
Median monthly housing costs                            6.01     7



Human resources subindex                                5.18    22    Human resources subindex                                    5.18     22
% of population aged 25 and over that graduated from    6.09     7    % of population without health insurance                    4.55     33
high school
Unemployment rate, not seasonally adjusted              6.17    5     % of population enrolled in degree-granting institutions    4.21     40

% of adults who are in the labor force                  5.28    18    Rate of nonfederal physicians per 100,000 inhabitants       4.54     33

% of students at or above proficient in mathematics,    5.62    13
grade 4 - public schools




Technology subindex                                     4.86    29    Technology subindex                                         4.86     29
Academic R&D per $1,000 GSP                             6.12     6    Patents, per 100,000 inhabitants                            4.34     37
S&E degrees awarded per 100,000 inhabitants             5.49    14    Scientists and engineers as % of labor force                4.29     37
                                                                      Employment in high-tech industry as % of total              4.17     38
                                                                      employment




Business incubation subindex                            5.06    19    Business incubation subindex                                5.06     19
Employer firm births per 100,000 inhabitants            6.94     4    Bank deposits per capita                                    4.63     39
Minimum wage                                            5.52     7    Venture capital per capita                                  4.43     44
                                                                      IPO, % of GSP                                               4.43     38
                                                                      % of labor force that is represented by unions              4.44     38



Openness subindex                                       4.18    50    Openness subindex                                           4.18     50
                                                                      Exports per capita, dollars                                 3.82     49
                                                                      % of population born abroad                                 3.91     48

Environmental policy subindex                           5.98    4     Environmental policy subindex                               5.98     4
Toxic release inventory, pounds per 1000 sq. miles      5.73    15

Carbon emission per 1000 sq miles                       5.92    4
Air Quality Index                                       6.29    5
                                                                                                                                                State Index




         Eighth Annual BHI State Competitiveness Report                                                                           / Page 41
Nebraska




           BHI           NEBRASKA                                                                                                                     Index    Overall Rank
                                                                                                                                                        5.68      14
                                                  COMPETITIVE ADVANTAGES                                                   COMPETITIVE DISADVANTAGES

                                         Subindex/Variable                          Index   Rank                    Subindex/Variable                          Index    Rank
                         Government and fiscal policy subindex                       5.21    16    Government and fiscal policy subindex                        5.21     16
                         Workers’ compensation premium rates                         5.30    20    State and local taxes per capita /income per capita          4.60     31
                         Bond rating: composite                                      5.66    12    Full-time-equivalent state and local government employees    3.78     47
                                                                                                   per 100 residents
                         Budget deficit, % of GSP                                    5.94    8
                         Average benefit per first payment for unemployed            5.96    8




                         Security subindex                                           5.58    10    Security subindex                                            5.58     10
                         Crime index change 2006-2007, %                             5.53    14
                         The BGA Integrity Index                                     6.30     6



                         Infrastructure subindex                                     5.05    25    Infrastructure subindex                                      5.05     25
                         Travel time to work                                         6.64     3    Telephone penetration (combined Fed/state/local taxes as     2.59     50
                                                                                                   % of price)
                         Electricity prices per million BTU                          5.86    5     High-speed lines per 1000                                    4.82     31
                         Median monthly housing costs                                5.80    11    Air passengers per capita                                    4.58     31




                         Human resources subindex                                    5.73    8     Human resources subindex                                     5.73     8
                         % of population aged 25 and over that graduated from        5.98    8
                         high school
                         Unemployment rate, not seasonally adjusted                  6.60    2
                         % of population enrolled in degree-granting institutions    5.93    9

                         % of adults who are in the labor force                      6.69    1
                         Infant mortality rate, deaths per 1000 live births          5.95    9




                         Technology subindex                                         4.97    26    Technology subindex                                          4.97     26
                         Academic R&D per $1,000 GSP                                 5.68    10    Patents, per 100,000 inhabitants                             4.37     36
                         Science & Engineering grad. students 100,000                5.27    17
                         inhabitants
                         Scientists and engineers as % of labor force                4.98    20




                         Business incubation subindex                                4.87    29    Business incubation subindex                                 4.87     29
                         Bank deposits per capita                                    4.81    20    Venture capital per capita                                   4.41     47
                         % of labor force that is represented by unions              5.51    19    Employer firm births per 100,000 inhabitants                 4.54     32
                         Minimum wage                                                5.52     7    IPO, % of GSP                                                4.43     38




                         Openness subindex                                           4.53    42    Openness subindex                                            4.53     42
                                                                                                   Exports per capita, dollars                                  4.52     32
                                                                                                   Incoming foreign direct investment per capita, dollars       4.53     49

                         Environmental policy subindex                               5.57    14    Environmental policy subindex                                5.57     14
                         Toxic release inventory, pounds per 1000 sq. miles          5.68    16

                         Carbon emission per 1000 sq miles                           5.81    8
           State Index




                         Page 42 /                                                  Eighth Annual BHI State Competitiveness Report
Nevada




         NEVADA                                                                                                                 Index      Overall Rank




                                                                                                                                                          BHI
                                                                                                                                  5.64        15
                                 COMPETITIVE ADVANTAGES                                               COMPETITIVE DISADVANTAGES

                         Subindex/Variable                     Index   Rank                    Subindex/Variable                           Index   Rank
         Government and fiscal policy subindex                  5.63    2     Government and fiscal policy subindex                         5.63     2
         State and local taxes per capita /income per capita    7.40    2     Workers’ compensation premium rates                           4.58     33

         Bond rating: composite                                 5.66    12    Budget deficit, % of GSP                                      4.37     39
         Full-time-equivalent state and local government        6.87     1
         employees per 100 residents




         Security subindex                                      4.65    37    Security subindex                                             4.65     37
         Crime index change 2006-2007, %                        6.05     5    Crime index, per 100,000 inhabitants                          3.91     42
                                                                              Murder index, per 100,000 inhabitants                         3.99     44
                                                                              The BGA Integrity Index                                       4.62     32

         Infrastructure subindex                                5.79    1     Infrastructure subindex                                       5.79     1
         Telephone penetration (combined Fed/state/local        7.00    2     Electricity prices per million BTU                            4.90     35
         taxes as % of price)
         High-speed lines per 1000                              6.32    4     Median monthly housing costs                                  3.52     46
         Air passengers per capita                              8.07    2




         Human resources subindex                               4.37    41    Human resources subindex                                      4.37     41
         % of adults who are in the labor force                 5.20    19    % of population without health insurance                      4.15     40
         Infant mortality rate, deaths per 1000 live births     5.85    10    % of population aged 25 and over that graduated from          4.37     35
                                                                              high school
                                                                              Unemployment rate, not seasonally adjusted                    3.99     43
                                                                              % of population enrolled in degree-granting institutions      3.69     47

                                                                              Rate of nonfederal physicians per 100,000 inhabitants         3.86     47

                                                                              % of students at or above proficient in mathematics, grade    3.85     43
                                                                              4 - public schools



         Technology subindex                                    3.77    50    Technology subindex                                           3.77     50
                                                                              Academic R&D per $1,000 GSP                                   3.46     50
                                                                              NIH support to institutions per capita                        4.06     49
                                                                              Science & Engineering grad. students 100,000                  3.66     48
                                                                              inhabitants
                                                                              S&E degrees awarded per 100,000 inhabitants                   2.98     50
                                                                              Scientists and engineers as % of labor force                  3.77     47
                                                                              Employment in high-tech industry as % of total                3.86     47
                                                                              employment

         Business incubation subindex                           5.34    8     Business incubation subindex                                  5.34     8
         Bank deposits per capita                               6.77     3    % of labor force that is represented by unions                4.05     43
         Venture capital per capita                             5.05    16
         Employer firm births per 100,000 inhabitants           6.22     7
         IPO, % of GSP                                          4.90    18



         Openness subindex                                      5.33    11    Openness subindex                                             5.33     11
         % of population born abroad                            6.80     4    Exports per capita, dollars                                   4.42     35



         Environmental policy subindex                          5.11    25    Environmental policy subindex                                 5.11     25
         Carbon emission per 1000 sq miles                      5.86     5    Toxic release inventory, pounds per 1000 sq. miles            4.12     43
         Air Quality Index                                      5.37    19
                                                                                                                                                          State Index




                  Eighth Annual BHI State Competitiveness Report                                                                            / Page 43
BHI           NEW HAMPSHIRE                                                                                                                 Index    Overall Rank
                                                                                                                                              5.63      17
                                      COMPETITIVE ADVANTAGES                                                     COMPETITIVE DISADVANTAGES

                             Subindex/Variable                         Index      Rank                     Subindex/Variable                         Index    Rank
              Government and fiscal policy subindex                     5.16       18    Government and fiscal policy subindex                        5.16     18
              State and local taxes per capita /income per capita       6.53        5    Workers’ compensation premium rates                          3.78     46

              Average benefit per first payment for unemployed          5.26       18

              Full-time-equivalent state and local government           5.43       17
              employees per 100 residents




              Security subindex                                         5.40       16    Security subindex                                            5.40     16
              Crime index, per 100,000 inhabitants                      6.75        2    Crime index change 2006-2007, %                              4.06     43
              Murder index, per 100,000 inhabitants                     6.40        1    The BGA Integrity Index                                      4.38     39



              Infrastructure subindex                                   4.79       36    Infrastructure subindex                                      4.79     36
              Telephone penetration (combined Fed/state/local taxes     5.43       19    Travel time to work                                          4.44     37
              as % of price)
              High-speed lines per 1000                                 6.33       3     Electricity prices per million BTU                           3.84     44
                                                                                         Median monthly housing costs                                 4.06     38




              Human resources subindex                                  5.83       6     Human resources subindex                                     5.83     6
              % of population without health insurance                  5.83       11    % of population enrolled in degree-granting institutions     4.43     36

              % of population aged 25 and over that graduated from      6.23       3
              high school
              Unemployment rate, not seasonally adjusted                5.96        9
              % of adults who are in the labor force                    6.32        8
              Infant mortality rate, deaths per 1000 live births        6.19        6
              Rate of nonfederal physicians per 100,000 inhabitants     5.21       16

              % of students at or above proficient in mathematics,      6.51       2
              grade 4 - public schools

              Technology subindex                                       5.57       11    Technology subindex                                          5.57     11
              Academic R&D per $1,000 GSP                               6.28        5    Science & Engineering grad. students 100,000                 4.17     41
                                                                                         inhabitants
              NIH support to institutions per capita                    5.14       15
              Patents, per 100,000 inhabitants                          5.95        8
              S&E degrees awarded per 100,000 inhabitants               5.70       11
              Scientists and engineers as % of labor force              5.41       13
              Employment in high-tech industry as % of total            6.31        7
              employment

              Business incubation subindex                              4.94       26    Business incubation subindex                                 4.94     26
              Venture capital per capita                                5.46        7    Bank deposits per capita                                     4.67     34
              Employer firm births per 100,000 inhabitants              5.45       12    IPO, % of GSP                                                4.43     38
                                                                                         Minimum wage                                                 4.37     37




              Openness subindex                                         4.60       38    Openness subindex                                            4.60     38
              Incoming foreign direct investment per capita, dollars    4.91       14    Exports per capita, dollars                                  4.41     36




              Environmental policy subindex                             5.38       20    Environmental policy subindex                                5.38     20
              Toxic release inventory, pounds per 1000 sq. miles        5.63       18

              Air Quality Index                                         5.34       20
State Index




                Page 44 /                                                      Eighth Annual BHI State Competitiveness Report
New Jersey




             NEW JERSEY                                                                                                             Index    Overall Rank




                                                                                                                                                            BHI
                                                                                                                                      4.15      42
                                 COMPETITIVE ADVANTAGES                                                  COMPETITIVE DISADVANTAGES

                         Subindex/Variable                        Index   Rank                    Subindex/Variable                          Index   Rank
         Government and fiscal policy subindex                     4.15    49    Government and fiscal policy subindex                        4.15     49
         Budget deficit, % of GSP                                  5.48    13    State and local taxes per capita /income per capita          2.85     50
                                                                                 Workers’ compensation premium rates                          4.45     35
                                                                                 Bond rating: composite                                       4.33     33
                                                                                 Average benefit per first payment for unemployed             3.07     48
                                                                                 Full-time-equivalent state and local government              4.74     36
                                                                                 employees per 100 residents

         Security subindex                                         5.64    8     Security subindex                                            5.64     8
         Crime index, per 100,000 inhabitants                      6.17     8
         Crime index change 2006-2007, %                           5.36    18
         The BGA Integrity Index                                   5.88    13

         Infrastructure subindex                                   4.61    46    Infrastructure subindex                                      4.61     46
         High-speed lines per 1000                                 7.20     1    Travel time to work                                          3.16     48
                                                                                 Electricity prices per million BTU                           3.97     42
                                                                                 Median monthly housing costs                                 3.23     48




         Human resources subindex                                  5.26    21    Human resources subindex                                     5.26     21
         % of adults who are in the labor force                    5.20    19    % of population without health insurance                     4.50     34
         Infant mortality rate, deaths per 1000 live births        6.22     5    % of population enrolled in degree-granting institutions     3.47     50

         Rate of nonfederal physicians per 100,000 inhabitants     6.09    8

         % of students at or above proficient in mathematics,      6.51    2
         grade 4 - public schools




         Technology subindex                                       4.92    27    Technology subindex                                          4.92     27
         Patents, per 100,000 inhabitants                          5.43    13    Academic R&D per $1,000 GSP                                  3.70     49
         Scientists and engineers as % of labor force              5.61    11    NIH support to institutions per capita                       4.43     37
         Employment in high-tech industry as % of total            5.82    10    S&E degrees awarded per 100,000 inhabitants                  4.58     32
         employment




         Business incubation subindex                              5.05    20    Business incubation subindex                                 5.05     20
         Bank deposits per capita                                  5.01     9    % of labor force that is represented by unions               3.53     45
         Venture capital per capita                                5.79     5    Minimum wage                                                 4.53     32
         Employer firm births per 100,000 inhabitants              6.08     8
         IPO, % of GSP                                             5.35     9



         Openness subindex                                         5.66    6     Openness subindex                                            5.66     6
         Exports per capita, dollars                               5.16    20
         Incoming foreign direct investment per capita, dollars    4.94    10

         % of population born abroad                               6.88     3
         Environmental policy subindex                             3.28    49    Environmental policy subindex                                3.28     49
                                                                                 Toxic release inventory, pounds per 1000 sq. miles           4.25     42
                                                                                 Carbon emission per 1000 sq miles                            0.73     50
                                                                                                                                                            State Index




                       Eighth Annual BHI State Competitiveness Report                                                                        / Page 45
BHI           NEW MEXICO                                                                                                                   Index     Overall Rank
                                                                                                                                             4.39       34
                                       COMPETITIVE ADVANTAGES                                                   COMPETITIVE DISADVANTAGES

                              Subindex/Variable                          Index   Rank                    Subindex/Variable                           Index    Rank
              Government and fiscal policy subindex                       5.01    25    Government and fiscal policy subindex                         5.01     25
              State and local taxes per capita /income per capita         5.65    11    Budget deficit, % of GSP                                      4.33     40

              Workers’ compensation premium rates                         5.30    20    Full-time-equivalent state and local government employees     3.91     46
                                                                                        per 100 residents
              Bond rating: composite                                      5.66    12




              Security subindex                                           4.15    46    Security subindex                                             4.15     46
              Crime index change 2006-2007, %                             5.47    16    Crime index, per 100,000 inhabitants                          4.07     38
                                                                                        Murder index, per 100,000 inhabitants                         3.73     47
                                                                                        The BGA Integrity Index                                       3.35     48

              Infrastructure subindex                                     5.06    22    Infrastructure subindex                                       5.06     22
              Travel time to work                                         5.53    15    Telephone penetration (combined Fed/state/local taxes as      4.57     36
                                                                                        % of price)
              Median monthly housing costs                                5.65    16    High-speed lines per 1000                                     4.45     36




              Human resources subindex                                    4.44    38    Human resources subindex                                      4.44     38
              Unemployment rate, not seasonally adjusted                  5.54    17    % of population without health insurance                      2.82     49
              % of population enrolled in degree-granting institutions    5.86    11    % of population aged 25 and over that graduated from high     3.99     40
                                                                                        school
              Infant mortality rate, deaths per 1000 live births          5.59    17    % of adults who are in the labor force                        4.04     42
                                                                                        % of students at or above proficient in mathematics, grade    3.09     48
                                                                                        4 - public schools




              Technology subindex                                         5.34    15    Technology subindex                                           5.34     15
              Academic R&D per $1,000 GSP                                 6.47     4    Patents, per 100,000 inhabitants                              4.43     31
              Science & Engineering grad. students 100,000                5.72    12    S&E degrees awarded per 100,000 inhabitants                   4.10     43
              inhabitants
              Scientists and engineers as % of labor force                4.98    20
              Employment in high-tech industry as % of total              6.80     5
              employment




              Business incubation subindex                                4.91    27    Business incubation subindex                                  4.91     27
              Venture capital per capita                                  5.07    15    Bank deposits per capita                                      4.48     49
              Minimum wage                                                5.60     5    IPO, % of GSP                                                 4.43     38




              Openness subindex                                           4.57    40    Openness subindex                                             4.57     40
              % of population born abroad                                 5.15    18    Exports per capita, dollars                                   3.89     47
                                                                                        Incoming foreign direct investment per capita, dollars        4.67     38

              Environmental policy subindex                               5.34    21    Environmental policy subindex                                 5.34     21
              Toxic release inventory, pounds per 1000 sq. miles          5.91     3    Air Quality Index                                             4.27     40

              Carbon emission per 1000 sq miles                           5.84    7
State Index




                Page 46 /                                                  Eighth Annual BHI State Competitiveness Report
NEW YORK                                                                                                                 Index     Overall Rank




                                                                                                                                                  BHI
                                                                                                                           4.38       35
                        COMPETITIVE ADVANTAGES                                                COMPETITIVE DISADVANTAGES

                Subindex/Variable                       Index   Rank                    Subindex/Variable                          Index   Rank
Government and fiscal policy subindex                    4.28    46    Government and fiscal policy subindex                        4.28     46
                                                                       State and local taxes per capita /income per capita          2.94     49
                                                                       Workers’ compensation premium rates                          4.63     32
                                                                       Bond rating: composite                                       4.33     33
                                                                       Budget deficit, % of GSP                                     4.82     32
                                                                       Average benefit per first payment for unemployed             4.56     37
                                                                       Full-time-equivalent state and local government              4.37     40
                                                                       employees per 100 residents
Security subindex                                        5.40    17    Security subindex                                            5.40     17
Crime index, per 100,000 inhabitants                     6.34     4    The BGA Integrity Index                                      4.64     31
Crime index change 2006-2007, %                          5.37    17



Infrastructure subindex                                  3.97    50    Infrastructure subindex                                      3.97     50
High-speed lines per 1000                                5.49    15    Telephone penetration (combined Fed/state/local taxes as     3.24     47
                                                                       % of price)
Air passengers per capita                                4.99    17    Travel time to work                                          2.68     50
                                                                       Electricity prices per million BTU                           3.47     46
                                                                       Median monthly housing costs                                 3.97     40



Human resources subindex                                 5.30    19    Human resources subindex                                     5.30     19
Infant mortality rate, deaths per 1000 live births       5.82    11    % of population aged 25 and over that graduated from         4.48     34
                                                                       high school
Rate of nonfederal physicians per 100,000 inhabitants    7.16    2     % of adults who are in the labor force                       4.40     36

% of students at or above proficient in mathematics,     5.49    16
grade 4 - public schools




Technology subindex                                      5.42    13    Technology subindex                                          5.42     13
NIH support to institutions per capita                   5.71     9
Patents, per 100,000 inhabitants                         5.19    16
Science & Engineering grad. students 100,000             6.52     3
inhabitants
S&E degrees awarded per 100,000 inhabitants              5.90    7




Business incubation subindex                             4.84    33    Business incubation subindex                                 4.84     33
Bank deposits per capita                                 5.45     5    % of labor force that is represented by unions               2.49     50
Venture capital per capita                               5.31    10    Minimum wage                                                 4.53     32
Employer firm births per 100,000 inhabitants             5.04    18
IPO, % of GSP                                            6.23     3



Openness subindex                                        5.74    5     Openness subindex                                            5.74     5
Exports per capita, dollars                              5.21    18
% of population born abroad                              7.19     2

Environmental policy subindex                            5.04    27    Environmental policy subindex                                5.04     27
                                                                       Carbon emission per 1000 sq miles                            4.60     39
                                                                                                                                                  State Index




            Eighth Annual BHI State Competitiveness Report                                                                        / Page 47
BHI           NORTH CAROLINA                                                                                                           Index    Overall Rank
                                                                                                                                         4.68           27
                                      COMPETITIVE ADVANTAGES                                               COMPETITIVE DISADVANTAGES

                             Subindex/Variable                       Index   Rank                    Subindex/Variable                          Index        Rank
              Government and fiscal policy subindex                   5.22    15    Government and fiscal policy subindex                        5.22         15
              Bond rating: composite                                  6.55     1    State and local taxes per capita /income per capita          4.60         31
              Budget deficit, % of GSP                                5.49    12    Full-time-equivalent state and local government employees    4.86         32
                                                                                    per 100 residents




              Security subindex                                       4.52    41    Security subindex                                            4.52         41
                                                                                    Crime index, per 100,000 inhabitants                         3.88         43
                                                                                    Crime index change 2006-2007, %                              4.56         35
                                                                                    Murder index, per 100,000 inhabitants                        4.37         37

              Infrastructure subindex                                 5.21    13    Infrastructure subindex                                      5.21         13
              Air passengers per capita                               5.11    13




              Human resources subindex                                4.43    39    Human resources subindex                                     4.43         39
              % of students at or above proficient in mathematics,    5.24    20    % of population without health insurance                     4.35         36
              grade 4 - public schools
                                                                                    % of population aged 25 and over that graduated from high    4.18         37
                                                                                    school
                                                                                    Unemployment rate, not seasonally adjusted                   4.06         41
                                                                                    % of adults who are in the labor force                       4.45         33
                                                                                    Infant mortality rate, deaths per 1000 live births           3.74         44




              Technology subindex                                     5.03    22    Technology subindex                                          5.03         22
              Academic R&D per $1,000 GSP                             5.49    13
              NIH support to institutions per capita                  5.75     8




              Business incubation subindex                            5.30    9     Business incubation subindex                                 5.30         9
              Bank deposits per capita                                4.91    13
              Venture capital per capita                              5.17    11
              IPO, % of GSP                                           4.78    19
              % of labor force that is represented by unions          6.57     1
              Minimum wage                                            5.52     7

              Openness subindex                                       4.72    33    Openness subindex                                            4.72         33
                                                                                    Incoming foreign direct investment per capita, dollars       4.75         32



              Environmental policy subindex                           4.36    42    Environmental policy subindex                                4.36         42
                                                                                    Toxic release inventory, pounds per 1000 sq. miles           4.34         41
                                                                                    Carbon emission per 1000 sq miles                            5.02         32
                                                                                    Air Quality Index                                            3.71         45
State Index




              Page 48 /                                              Eighth Annual BHI State Competitiveness Report
NORTH DAKOTA                                                                                                                Index     Overall Rank




                                                                                                                                                     BHI
                                                                                                                              6.75         3
                        COMPETITIVE ADVANTAGES                                                   COMPETITIVE DISADVANTAGES

               Subindex/Variable                           Index   Rank                    Subindex/Variable                          Index   Rank
Government and fiscal policy subindex                       5.56    5     Government and fiscal policy subindex                        5.56     5
State and local taxes per capita /income per capita         5.13    18    Full-time-equivalent state and local government              3.99     44
                                                                          employees per 100 residents
Workers’ compensation premium rates                         7.10    1
Budget deficit, % of GSP                                    7.20    1




Security subindex                                           5.73    4     Security subindex                                            5.73     4
Crime index, per 100,000 inhabitants                        6.75     3    The BGA Integrity Index                                      4.47     34
Crime index change 2006-2007, %                             5.58    12
Murder index, per 100,000 inhabitants                       6.10     7

Infrastructure subindex                                     5.36    7     Infrastructure subindex                                      5.36     7
Travel time to work                                         7.06    1     Telephone penetration (combined Fed/state/local taxes as     4.69     34
                                                                          % of price)
Electricity prices per million BTU                          5.76    8     High-speed lines per 1000                                    3.77     44
Median monthly housing costs                                6.41    1     Air passengers per capita                                    4.45     34




Human resources subindex                                    5.99    4     Human resources subindex                                     5.99     4
% of population without health insurance                    5.95    9     Rate of nonfederal physicians per 100,000 inhabitants        4.58     31

% of population aged 25 and over that graduated from        5.82    14
high school
Unemployment rate, not seasonally adjusted                  6.53    3
% of population enrolled in degree-granting institutions    6.80    3

% of adults who are in the labor force                      6.69     1
Infant mortality rate, deaths per 1000 live births          5.71    15
% of students at or above proficient in mathematics,        5.87     9
grade 4 - public schools

Technology subindex                                         5.15    20    Technology subindex                                          5.15     20
Academic R&D per $1,000 GSP                                 6.68     3    NIH support to institutions per capita                       4.39     40
Science & Engineering grad. students 100,000                6.22     4    Patents, per 100,000 inhabitants                             4.37     35
inhabitants
S&E degrees awarded per 100,000 inhabitants                 5.51    13    Scientists and engineers as % of labor force                 4.27     39
                                                                          Employment in high-tech industry as % of total               4.59     32
                                                                          employment




Business incubation subindex                                4.97    23    Business incubation subindex                                 4.97     23
Bank deposits per capita                                    4.87    14    Venture capital per capita                                   4.41     47
% of labor force that is represented by unions              5.89    12    IPO, % of GSP                                                4.43     38
Minimum wage                                                5.52     7




Openness subindex                                           4.54    41    Openness subindex                                            4.54     41
                                                                          Incoming foreign direct investment per capita, dollars       4.61     47
                                                                          % of population born abroad                                  4.03     46

Environmental policy subindex                               6.13    1     Environmental policy subindex                                6.13     1
Toxic release inventory, pounds per 1000 sq. miles          5.78    11

Carbon emission per 1000 sq miles                           5.77    10
Air Quality Index                                           6.83     1
                                                                                                                                                     State Index




    Eighth Annual BHI State Competitiveness Report                                                                                   / Page 49
Ohio




       BHI           OHIO                                                                                                                        Index   Overall Rank
                                                                                                                                                  3.95           44
                                             COMPETITIVE ADVANTAGES                                                 COMPETITIVE DISADVANTAGES

                                    Subindex/Variable                        Index   Rank                     Subindex/Variable                          Index        Rank
                     Government and fiscal policy subindex                    4.67    40    Government and fiscal policy subindex                         4.67         40
                     Bond rating: composite                                   5.66    12    State and local taxes per capita /income per capita           4.08         44
                                                                                            Workers’ compensation premium rates                           3.34         48
                                                                                            Budget deficit, % of GSP                                      4.82         33




                     Security subindex                                        5.37    19    Security subindex                                             5.37         19
                     Crime index change 2006-2007, %                          5.91     7
                     The BGA Integrity Index                                  5.73    15



                     Infrastructure subindex                                  5.23    10    Infrastructure subindex                                       5.23         10
                     Telephone penetration (combined Fed/state/local taxes    5.42    20    Air passengers per capita                                     4.44         35
                     as % of price)
                     High-speed lines per 1000                                5.39    19
                     Median monthly housing costs                             5.62    18




                     Human resources subindex                                 4.92    28    Human resources subindex                                      4.92         28
                     % of population without health insurance                 5.53    18    Unemployment rate, not seasonally adjusted                    3.84         44
                     Rate of nonfederal physicians per 100,000 inhabitants    5.41    11    % of population enrolled in degree-granting institutions      4.45         35

                     % of students at or above proficient in mathematics,     5.87    9     Infant mortality rate, deaths per 1000 live births            4.11         43
                     grade 4 - public schools




                     Technology subindex                                      4.80    31    Technology subindex                                           4.80         31
                     Patents, per 100,000 inhabitants                         4.97    20    S&E degrees awarded per 100,000 inhabitants                   4.57         33
                     Science & Engineering grad. students 100,000             5.14    20    Employment in high-tech industry as % of total                4.30         34
                     inhabitants                                                            employment




                     Business incubation subindex                             4.46    45    Business incubation subindex                                  4.46         45
                                                                                            Venture capital per capita                                    4.52         32
                                                                                            Employer firm births per 100,000 inhabitants                  3.69         50
                                                                                            % of labor force that is represented by unions                4.47         35




                     Openness subindex                                        4.77    31    Openness subindex                                             4.77         31
                     Exports per capita, dollars                              5.27    15    % of population born abroad                                   4.24         38



                     Environmental policy subindex                            3.49    47    Environmental policy subindex                                 3.49         47
                                                                                            Toxic release inventory, pounds per 1000 sq. miles            2.07         49
                                                                                            Carbon emission per 1000 sq miles                             3.93         42
                                                                                            Air Quality Index                                             4.47         38
       State Index




                       Page 50 /                                             Eighth Annual BHI State Competitiveness Report
OKLAHOMA                                                                                                                  Index     Overall Rank




                                                                                                                                                    BHI
                                                                                                                            4.17       40
                         COMPETITIVE ADVANTAGES                                             COMPETITIVE DISADVANTAGES

                Subindex/Variable                    Index   Rank                    Subindex/Variable                              Index    Rank
Government and fiscal policy subindex                 4.73    38    Government and fiscal policy subindex                            4.73     38
Budget deficit, % of GSP                              5.51    10    State and local taxes per capita /income per capita              4.60     31
Average benefit per first payment for unemployed      5.30    17    Workers’ compensation premium rates                              4.06     41

                                                                    Bond rating: composite                                           4.33     33
                                                                    Full-time-equivalent state and local government employees        4.59     39
                                                                    per 100 residents



Security subindex                                     4.74    32    Security subindex                                                4.74     32
                                                                    Crime index, per 100,000 inhabitants                             4.48     31
                                                                    Murder index, per 100,000 inhabitants                            4.52     33



Infrastructure subindex                               5.05    23    Infrastructure subindex                                          5.05     23
Travel time to work                                   5.78    10    High-speed lines per 1000                                        3.63     46
Electricity prices per million BTU                    5.58    14    Air passengers per capita                                        4.42     37
Median monthly housing costs                          5.96     8




Human resources subindex                              4.59    35    Human resources subindex                                         4.59     35
Unemployment rate, not seasonally adjusted            6.17     5    % of population without health insurance                         4.00     42
                                                                    % of population aged 25 and over that graduated from high        4.67     33
                                                                    school
                                                                    % of adults who are in the labor force                           4.45     33
                                                                    Infant mortality rate, deaths per 1000 live births               4.26     40
                                                                    Rate of nonfederal physicians per 100,000 inhabitants            4.01     45

                                                                    % of students at or above proficient in mathematics, grade       4.23     38
                                                                    4 - public schools



Technology subindex                                   4.33    39    Technology subindex                                              4.33     39
                                                                    Academic R&D per $1,000 GSP                                      3.96     45
                                                                    NIH support to institutions per capita                           4.29     41
                                                                    Patents, per 100,000 inhabitants                                 4.38     34
                                                                    Science & Engineering grad. students 100,000 inhabitants         4.29     39

                                                                    S&E degrees awarded per 100,000 inhabitants                      4.53     34
                                                                    Scientists and engineers as % of labor force                     4.64     32
                                                                    Employment in high-tech industry as % of total employment        4.22     35

Business incubation subindex                          5.03    21    Business incubation subindex                                     5.03     21
IPO, % of GSP                                         5.20    11    Bank deposits per capita                                         4.64     37
% of labor force that is represented by unions        5.73    14    Venture capital per capita                                       4.46     39
Minimum wage                                          5.52     7




Openness subindex                                     4.33    47    Openness subindex                                                4.33     47
                                                                    Exports per capita, dollars                                      3.86     48
                                                                    Incoming foreign direct investment per capita, dollars           4.67     41
                                                                    % of population born abroad                                      4.45     31
Environmental policy subindex                         5.60    13    Environmental policy subindex                                    5.60     13
Toxic release inventory, pounds per 1000 sq. miles    5.74    14

Air Quality Index                                     5.57    15
                                                                                                                                                    State Index




         Eighth Annual BHI State Competitiveness Report                                                                            / Page 51
BHI           OREGON                                                                                                                    Index      Overall Rank
                                                                                                                                          5.97          8
                                      COMPETITIVE ADVANTAGES                                                 COMPETITIVE DISADVANTAGES

                             Subindex/Variable                         Index   Rank                    Subindex/Variable                           Index   Rank
              Government and fiscal policy subindex                     5.32    12    Government and fiscal policy subindex                         5.32     12
              Workers’ compensation premium rates                       5.76    13    Bond rating: composite                                        3.88     44
              Budget deficit, % of GSP                                  6.60     2
              Full-time-equivalent state and local government           5.92     7
              employees per 100 residents




              Security subindex                                         5.24    21    Security subindex                                             5.24     21
              Murder index, per 100,000 inhabitants                     6.10     7




              Infrastructure subindex                                   5.54    5     Infrastructure subindex                                       5.54     5
              Telephone penetration (combined Fed/state/local           7.10    1
              taxes as % of price)
              High-speed lines per 1000                                 5.36    20
              Travel time to work                                       5.35    16
              Electricity prices per million BTU                        5.51    20



              Human resources subindex                                  4.92    29    Human resources subindex                                      4.92     29
              % of population aged 25 and over that graduated from      5.54    20    % of population without health insurance                      4.25     39
              high school
              Infant mortality rate, deaths per 1000 live births        5.78    13    Unemployment rate, not seasonally adjusted                    4.48     34
              Rate of nonfederal physicians per 100,000 inhabitants     5.28    14    % of population enrolled in degree-granting institutions      4.57     31

                                                                                      % of students at or above proficient in mathematics, grade    4.48     36
                                                                                      4 - public schools




              Technology subindex                                       5.30    17    Technology subindex                                           5.30     17
              NIH support to institutions per capita                    5.24    13    Science & Engineering grad. students 100,000                  4.38     36
                                                                                      inhabitants
              Patents, per 100,000 inhabitants                          6.62     4
              Scientists and engineers as % of labor force              5.12    16
              Employment in high-tech industry as % of total            5.73    11
              employment




              Business incubation subindex                              4.62    42    Business incubation subindex                                  4.62     42
              Venture capital per capita                                5.02    18    Bank deposits per capita                                      4.54     46
              Employer firm births per 100,000 inhabitants              5.98     9    IPO, % of GSP                                                 4.51     32
                                                                                      % of labor force that is represented by unions                4.47     35
                                                                                      Minimum wage                                                  3.21     47



              Openness subindex                                         5.25    15    Openness subindex                                             5.25     15
              Exports per capita, dollars                               5.68     8
              Incoming foreign direct investment per capita, dollars    4.83    19

              % of population born abroad                               5.23    17
              Environmental policy subindex                             5.49    17    Environmental policy subindex                                 5.49     17
              Toxic release inventory, pounds per 1000 sq. miles        5.83     5    Air Quality Index                                             4.80     31

              Carbon emission per 1000 sq miles                         5.85    6
State Index




               Page 52 /                                                 Eighth Annual BHI State Competitiveness Report
PENNSYLVANIA                                                                                                                Index    Overall Rank




                                                                                                                                                    BHI
                                                                                                                              4.18      39
                       COMPETITIVE ADVANTAGES                                                  COMPETITIVE DISADVANTAGES

               Subindex/Variable                        Index   Rank                     Subindex/Variable                           Index   Rank
Government and fiscal policy subindex                    4.79    36    Government and fiscal policy subindex                          4.79     36
Full-time-equivalent state and local government          6.34     2    State and local taxes per capita /income per capita            4.25     39
employees per 100 residents
                                                                       Workers’ compensation premium rates                            4.42     36
                                                                       Average benefit per first payment for unemployed               4.03     43




Security subindex                                        5.24    22    Security subindex                                              5.24     22
Crime index, per 100,000 inhabitants                     5.90    12




Infrastructure subindex                                  4.79    37    Infrastructure subindex                                        4.79     37
                                                                       Telephone penetration (combined Fed/state/local taxes as       3.90     43
                                                                       % of price)
                                                                       Travel time to work                                            4.42     38
                                                                       Electricity prices per million BTU                             5.08     34




Human resources subindex                                 5.32    17    Human resources subindex                                       5.32     17
% of population without health insurance                 6.08     8    Infant mortality rate, deaths per 1000 live births             4.78     31
Rate of nonfederal physicians per 100,000 inhabitants    6.20     7

% of students at or above proficient in mathematics,     6.00    7
grade 4 - public schools




Technology subindex                                      5.33    16    Technology subindex                                            5.33     16
Academic R&D per $1,000 GSP                              5.69     9
NIH support to institutions per capita                   5.93     6
Science & Engineering grad. students 100,000             5.23    18
inhabitants
S&E degrees awarded per 100,000 inhabitants              5.72    10
Scientists and engineers as % of labor force             5.11    17



Business incubation subindex                             4.62    43    Business incubation subindex                                   4.62     43
Bank deposits per capita                                 4.84    16    % of labor force that is represented by unions                 4.26     40
Venture capital per capita                               4.84    20    Minimum wage                                                   4.53     32




Openness subindex                                        4.58    39    Openness subindex                                              4.58     39
                                                                       Exports per capita, dollars                                    4.49     33
                                                                       Incoming foreign direct investment per capita, dollars         4.72     34

Environmental policy subindex                            3.95    45    Environmental policy subindex                                  3.95     45
                                                                       Toxic release inventory, pounds per 1000 sq. miles             3.83     44
                                                                       Carbon emission per 1000 sq miles                              3.89     43
                                                                       Air Quality Index                                              4.14     41
                                                                                                                                                    State Index




             Eighth Annual BHI State Competitiveness Report                                                                          / Page 53
BHI           RHODE ISLAND                                                                                                                 Index     Overall Rank
                                                                                                                                             4.58       31
                                      COMPETITIVE ADVANTAGES                                                    COMPETITIVE DISADVANTAGES

                              Subindex/Variable                          Index   Rank                       Subindex/Variable                        Index   Rank
              Government and fiscal policy subindex                       4.68    39    Government and fiscal policy subindex                         4.68     39
              Full-time-equivalent state and local government             6.06     5    State and local taxes per capita /income per capita           4.25     39
              employees per 100 residents
                                                                                        Bond rating: composite                                        4.33     33
                                                                                        Average benefit per first payment for unemployed              3.35     47




              Security subindex                                           5.41    15    Security subindex                                             5.41     15
              Crime index, per 100,000 inhabitants                        5.82    15    Crime index change 2006-2007, %                               2.88     49
              Murder index, per 100,000 inhabitants                       6.14     6
              The BGA Integrity Index                                     6.79     2

              Infrastructure subindex                                     4.61    45    Infrastructure subindex                                       4.61     45
              High-speed lines per 1000                                   6.05     9    Telephone penetration (combined Fed/state/local taxes as      3.63     45
                                                                                        % of price)
              Air passengers per capita                                   5.00    16    Electricity prices per million BTU                            3.44     48
                                                                                        Median monthly housing costs                                  4.45     37




              Human resources subindex                                    5.10    23    Human resources subindex                                      5.10     23
              % of population without health insurance                    5.75    12    % of population aged 25 and over that graduated from          4.18     37
                                                                                        high school
              % of population enrolled in degree-granting institutions    6.60    5     Unemployment rate, not seasonally adjusted                    2.64     50

              Infant mortality rate, deaths per 1000 live births          5.37    19    % of students at or above proficient in mathematics, grade    4.35     37
                                                                                        4 - public schools
              Rate of nonfederal physicians per 100,000 inhabitants       6.73    6




              Technology subindex                                         5.71    5     Technology subindex                                           5.71     5
              Academic R&D per $1,000 GSP                                 5.87     8
              NIH support to institutions per capita                      6.34     3
              Patents, per 100,000 inhabitants                            5.42    14
              Science & Engineering grad. students 100,000                5.52    13
              inhabitants
              S&E degrees awarded per 100,000 inhabitants                 7.02    3



              Business incubation subindex                                4.72    38    Business incubation subindex                                  4.72     38
              Bank deposits per capita                                    4.96    10    IPO, % of GSP                                                 4.43     38
              Venture capital per capita                                  5.03    17    % of labor force that is represented by unions                4.40     39
              Employer firm births per 100,000 inhabitants                5.38    13    Minimum wage                                                  4.12     42




              Openness subindex                                           4.87    24    Openness subindex                                             4.87     24
              Incoming foreign direct investment per capita, dollars      4.88    17    Exports per capita, dollars                                   4.03     44

              % of population born abroad                                 5.71    12

              Environmental policy subindex                               4.66    35    Environmental policy subindex                                 4.66     35
              Toxic release inventory, pounds per 1000 sq. miles          5.75    13    Carbon emission per 1000 sq miles                             3.49     47

                                                                                        Air Quality Index                                             4.74     34
State Index




               Page 54 /                                                   Eighth Annual BHI State Competitiveness Report
SOUTH CAROLINA                                                                                                            Index       Overall Rank




                                                                                                                                                          BHI
                                                                                                                             3.93             46
                         COMPETITIVE ADVANTAGES                                                COMPETITIVE DISADVANTAGES

                Subindex/Variable                        Index   Rank                    Subindex/Variable                            Index        Rank
Government and fiscal policy subindex                     5.29    13    Government and fiscal policy subindex                          5.29         13
State and local taxes per capita /income per capita       5.48    14    Workers’ compensation premium rates                            4.31         38

Bond rating: composite                                    6.10    8     Full-time-equivalent state and local government employees      4.87         31
                                                                        per 100 residents
Average benefit per first payment for unemployed          5.90    11




Security subindex                                         4.32    44    Security subindex                                              4.32         44
The BGA Integrity Index                                   6.04     9    Crime index, per 100,000 inhabitants                           3.42         50
                                                                        Crime index change 2006-2007, %                                4.00         45
                                                                        Murder index, per 100,000 inhabitants                          3.81         46

Infrastructure subindex                                   5.04    26    Infrastructure subindex                                        5.04         26
Electricity prices per million BTU                        5.51    19    High-speed lines per 1000                                      4.73         32
Median monthly housing costs                              5.60    19    Air passengers per capita                                      4.35         43




Human resources subindex                                  3.99    48    Human resources subindex                                       3.99         48
                                                                        % of population without health insurance                       4.35         36
                                                                        % of population aged 25 and over that graduated from high      3.93         41
                                                                        school
                                                                        Unemployment rate, not seasonally adjusted                     3.35         48
                                                                        % of population enrolled in degree-granting institutions       4.05         43

                                                                        % of adults who are in the labor force                         3.94         43
                                                                        Infant mortality rate, deaths per 1000 live births             3.31         48
                                                                        Rate of nonfederal physicians per 100,000 inhabitants          4.38         36

                                                                        % of students at or above proficient in mathematics, grade     4.61         34
                                                                        4 - public schools
Technology subindex                                       4.25    42    Technology subindex                                            4.25         42
                                                                        NIH support to institutions per capita                         4.43         38
                                                                        Patents, per 100,000 inhabitants                               4.27         39
                                                                        Science & Engineering grad. students 100,000 inhabitants       3.58         49

                                                                        S&E degrees awarded per 100,000 inhabitants                    4.28         39
                                                                        Scientists and engineers as % of labor force                   4.26         40
                                                                        Employment in high-tech industry as % of total employment      4.08         39



Business incubation subindex                              4.98    22    Business incubation subindex                                   4.98         22
% of labor force that is represented by unions            6.20     5    Bank deposits per capita                                       4.60         42
Minimum wage                                              5.52     7    Venture capital per capita                                     4.44         43
                                                                        IPO, % of GSP                                                  4.45         37




Openness subindex                                         4.92    23    Openness subindex                                              4.92         23
Exports per capita, dollars                               5.31    14    % of population born abroad                                    4.34         33
Incoming foreign direct investment per capita, dollars    5.11     7



Environmental policy subindex                             4.51    37    Environmental policy subindex                                  4.51         37
                                                                        Toxic release inventory, pounds per 1000 sq. miles             4.48         38
                                                                        Carbon emission per 1000 sq miles                              5.03         31
                                                                        Air Quality Index                                              4.01         43
                                                                                                                                                          State Index




 Eighth Annual BHI State Competitiveness Report                                                                                      / Page 55
BHI           SOUTH DAKOTA                                                                                                                 Index    Overall Rank
                                                                                                                                             5.75           11
                                       COMPETITIVE ADVANTAGES                                                   COMPETITIVE DISADVANTAGES

                              Subindex/Variable                          Index   Rank                    Subindex/Variable                          Index        Rank
              Government and fiscal policy subindex                       5.35    11    Government and fiscal policy subindex                        5.35         11
              State and local taxes per capita /income per capita         6.27     6    Budget deficit, % of GSP                                     4.78         34

              Workers’ compensation premium rates                         5.42    16    Full-time-equivalent state and local government employees    4.85         33
                                                                                        per 100 residents
              Average benefit per first payment for unemployed            6.04    7




              Security subindex                                           5.24    23    Security subindex                                            5.24         23
              Crime index, per 100,000 inhabitants                        6.99     1    The BGA Integrity Index                                      2.62         50
              Crime index change 2006-2007, %                             5.32    20
              Murder index, per 100,000 inhabitants                       6.02    10

              Infrastructure subindex                                     5.20    14    Infrastructure subindex                                      5.20         14
              Travel time to work                                         7.01     2    Telephone penetration (combined Fed/state/local taxes as     4.33         39
                                                                                        % of price)
              Electricity prices per million BTU                          5.66    12    High-speed lines per 1000                                    3.50         47
              Median monthly housing costs                                6.34     3    Air passengers per capita                                    4.38         41




              Human resources subindex                                    5.56    11    Human resources subindex                                     5.56         11
              % of population without health insurance                    5.93    10    Rate of nonfederal physicians per 100,000 inhabitants        4.25         37

              % of population aged 25 and over that graduated from        5.60    19
              high school
              Unemployment rate, not seasonally adjusted                  6.67     1
              % of population enrolled in degree-granting institutions    5.35    17

              % of adults who are in the labor force                      6.64     3
              % of students at or above proficient in mathematics,        5.24    20
              grade 4 - public schools



              Technology subindex                                         4.34    37    Technology subindex                                          4.34         37
              S&E degrees awarded per 100,000 inhabitants                 5.76     8    Academic R&D per $1,000 GSP                                  3.95         46
                                                                                        NIH support to institutions per capita                       4.26         43
                                                                                        Patents, per 100,000 inhabitants                             4.08         43
                                                                                        Science & Engineering grad. students 100,000 inhabitants     4.34         37

                                                                                        Scientists and engineers as % of labor force                 4.02         42
                                                                                        Employment in high-tech industry as % of total employment    3.98         44



              Business incubation subindex                                5.28    10    Business incubation subindex                                 5.28         10
              Bank deposits per capita                                    7.00     2    Venture capital per capita                                   4.49         35
              % of labor force that is represented by unions              5.88    13    Employer firm births per 100,000 inhabitants                 4.33         38
              Minimum wage                                                5.52     7    IPO, % of GSP                                                4.43         38




              Openness subindex                                           4.23    49    Openness subindex                                            4.23         49
                                                                                        Exports per capita, dollars                                  4.23         40
                                                                                        Incoming foreign direct investment per capita, dollars       4.52         50
                                                                                        % of population born abroad                                  3.93         47
              Environmental policy subindex                               6.12    2     Environmental policy subindex                                6.12         2
              Toxic release inventory, pounds per 1000 sq. miles          5.92    2

              Carbon emission per 1000 sq miles                           5.94    2
              Air Quality Index                                           6.49    3
State Index




              Page 56 /                                                     Eighth Annual BHI State Competitiveness Report
TENNESSEE                                                                                                              Index       Overall Rank




                                                                                                                                                   BHI
                                                                                                                         4.16         41
                         COMPETITIVE ADVANTAGES                                             COMPETITIVE DISADVANTAGES

                Subindex/Variable                     Index   Rank                    Subindex/Variable                            Index    Rank
Government and fiscal policy subindex                  5.60    3     Government and fiscal policy subindex                          5.60     3
State and local taxes per capita /income per capita    5.83    7

Bond rating: composite                                 5.21    19
Budget deficit, % of GSP                               6.08     7
Average benefit per first payment for unemployed       6.32     6

Full-time-equivalent state and local government        5.37    19
employees per 100 residents

Security subindex                                      4.06    47    Security subindex                                              4.06     47
                                                                     Crime index, per 100,000 inhabitants                           3.55     48
                                                                     Crime index change 2006-2007, %                                4.56     34
                                                                     Murder index, per 100,000 inhabitants                          4.41     35
                                                                     The BGA Integrity Index                                        3.73     45
Infrastructure subindex                                5.09    19    Infrastructure subindex                                        5.09     19
Electricity prices per million BTU                     5.52    18    Telephone penetration (combined Fed/state/local taxes as       4.44     38
                                                                     % of price)
Median monthly housing costs                           5.67    14




Human resources subindex                               4.16    45    Human resources subindex                                       4.16     45
                                                                     % of population without health insurance                       4.85     31
                                                                     % of population aged 25 and over that graduated from high      3.74     42
                                                                     school
                                                                     Unemployment rate, not seasonally adjusted                     4.20     40
                                                                     % of population enrolled in degree-granting institutions       3.85     45

                                                                     % of adults who are in the labor force                         4.30     38
                                                                     Infant mortality rate, deaths per 1000 live births             3.70     45
                                                                     % of students at or above proficient in mathematics, grade     3.72     45
                                                                     4 - public schools

Technology subindex                                    4.29    41    Technology subindex                                            4.29     41
NIH support to institutions per capita                 5.18    14    Academic R&D per $1,000 GSP                                    4.56     34
                                                                     Patents, per 100,000 inhabitants                               4.30     38
                                                                     Science & Engineering grad. students 100,000 inhabitants       4.08     44

                                                                     S&E degrees awarded per 100,000 inhabitants                    4.04     45
                                                                     Scientists and engineers as % of labor force                   3.95     43
                                                                     Employment in high-tech industry as % of total employment      3.91     46



Business incubation subindex                           5.13    17    Business incubation subindex                                   5.13     17
IPO, % of GSP                                          5.21    10
% of labor force that is represented by unions         6.11     6
Minimum wage                                           5.52     7




Openness subindex                                      4.77    30    Openness subindex                                              4.77     30
Exports per capita, dollars                            5.18    19    % of population born abroad                                    4.30     36



Environmental policy subindex                          4.43    40    Environmental policy subindex                                  4.43     40
                                                                     Toxic release inventory, pounds per 1000 sq. miles             3.82     45
                                                                     Carbon emission per 1000 sq miles                              4.95     34
                                                                     Air Quality Index                                              4.52     37
                                                                                                                                                   State Index




          Eighth Annual BHI State Competitiveness Report                                                                          / Page 57
BHI           TEXAS                                                                                                                      Index    Overall Rank
                                                                                                                                           4.94      23
                                        COMPETITIVE ADVANTAGES                                               COMPETITIVE DISADVANTAGES

                             Subindex/Variable                         Index   Rank                    Subindex/Variable                          Index    Rank
              Government and fiscal policy subindex                     5.10    21    Government and fiscal policy subindex                        5.10     21
              State and local taxes per capita /income per capita       5.83     7    Workers’ compensation premium rates                          4.53     34

              Bond rating: composite                                    5.21    19    Average benefit per first payment for unemployed             4.61     34
              Budget deficit, % of GSP                                  5.35    20




              Security subindex                                         4.60    39    Security subindex                                            4.60     39
              The BGA Integrity Index                                   5.94    10    Crime index, per 100,000 inhabitants                         3.79     44
                                                                                      Crime index change 2006-2007, %                              4.09     42
                                                                                      Murder index, per 100,000 inhabitants                        4.59     31

              Infrastructure subindex                                   4.65    42    Infrastructure subindex                                      4.65     42
              Air passengers per capita                                 5.25    12    Telephone penetration (combined Fed/state/local taxes as     3.69     44
                                                                                      % of price)
                                                                                      High-speed lines per 1000                                    4.60     34
                                                                                      Travel time to work                                          4.53     35
                                                                                      Electricity prices per million BTU                           4.78     36



              Human resources subindex                                  4.24    44    Human resources subindex                                     4.24     44
                                                                                      % of population without health insurance                     2.15     50
                                                                                      % of population aged 25 and over that graduated from high    3.11     49
                                                                                      school
                                                                                      % of population enrolled in degree-granting institutions     4.49     34

                                                                                      % of adults who are in the labor force                       4.40     36
                                                                                      Rate of nonfederal physicians per 100,000 inhabitants        4.08     43




              Technology subindex                                       4.84    30    Technology subindex                                          4.84     30
              Scientists and engineers as % of labor force              5.27    14    Academic R&D per $1,000 GSP                                  4.50     36
              Employment in high-tech industry as % of total            5.49    15    S&E degrees awarded per 100,000 inhabitants                  4.14     41
              employment




              Business incubation subindex                              5.17    13    Business incubation subindex                                 5.17     13
              Venture capital per capita                                5.00    19    Employer firm births per 100,000 inhabitants                 4.31     40
              IPO, % of GSP                                             5.20    13
              % of labor force that is represented by unions            6.24     4
              Minimum wage                                              5.52     7



              Openness subindex                                         6.11    3     Openness subindex                                            6.11     3
              Exports per capita, dollars                               7.20     3
              Incoming foreign direct investment per capita, dollars    4.88    15

              % of population born abroad                               6.25     7
              Environmental policy subindex                             5.15    23    Environmental policy subindex                                5.15     23
State Index




                Page 58 /                                               Eighth Annual BHI State Competitiveness Report
UTAH                                                                                                                         Index    Overall Rank




                                                                                                                                                      BHI
                                                                                                                               6.79        2
                         COMPETITIVE ADVANTAGES                                                  COMPETITIVE DISADVANTAGES

                Subindex/Variable                          Index   Rank                    Subindex/Variable                          Index    Rank
Government and fiscal policy subindex                       5.59    4     Government and fiscal policy subindex                        5.59     4
Workers’ compensation premium rates                         6.17    6     Average benefit per first payment for unemployed             4.48     39
Bond rating: composite                                      6.55    1
Budget deficit, % of GSP                                    5.79    9
Full-time-equivalent state and local government             5.75    10
employees per 100 residents



Security subindex                                           4.99    27    Security subindex                                            4.99     27
Murder index, per 100,000 inhabitants                       5.99    11    Crime index change 2006-2007, %                              4.33     39




Infrastructure subindex                                     5.21    11    Infrastructure subindex                                      5.21     11
Air passengers per capita                                   5.68     6    Telephone penetration (combined Fed/state/local taxes as     4.25     40
                                                                          % of price)
Travel time to work                                         5.55    13
Electricity prices per million BTU                          5.83    7




Human resources subindex                                    5.80    7     Human resources subindex                                     5.80     7
% of population aged 25 and over that graduated from        6.15    6     Rate of nonfederal physicians per 100,000 inhabitants        4.11     41
high school
Unemployment rate, not seasonally adjusted                  6.17    5
% of population enrolled in degree-granting institutions    7.06    2

% of adults who are in the labor force                      5.89    11
Infant mortality rate, deaths per 1000 live births          6.76    1




Technology subindex                                         5.52    12    Technology subindex                                          5.52     12
Academic R&D per $1,000 GSP                                 5.30    16
Patents, per 100,000 inhabitants                            5.08    17
Science & Engineering grad. students 100,000                5.87     9
inhabitants
S&E degrees awarded per 100,000 inhabitants                 6.58    4
Scientists and engineers as % of labor force                5.42    12
Employment in high-tech industry as % of total              5.58    13
employment

Business incubation subindex                                6.16    2     Business incubation subindex                                 6.16     2
Bank deposits per capita                                    6.60     4
Venture capital per capita                                  5.46     6
Employer firm births per 100,000 inhabitants                7.15     2
IPO, % of GSP                                               6.18     4
% of labor force that is represented by unions              6.04    10
Minimum wage                                                5.52     7
Openness subindex                                           4.95    22    Openness subindex                                            4.95     22
Incoming foreign direct investment per capita, dollars      5.04     9

% of population born abroad                                 4.97    20

Environmental policy subindex                               4.64    36    Environmental policy subindex                                4.64     36
Carbon emission per 1000 sq miles                           5.74    13    Toxic release inventory, pounds per 1000 sq. miles           4.70     34
                                                                          Air Quality Index                                            3.48     48
                                                                                                                                                      State Index




              Eighth Annual BHI State Competitiveness Report                                                                          / Page 59
Vermont




          BHI           VERMONT                                                                                                                    Index    Overall Rank
                                                                                                                                                     5.69      13
                                                COMPETITIVE ADVANTAGES                                                    COMPETITIVE DISADVANTAGES

                                       Subindex/Variable                           Index   Rank                    Subindex/Variable                        Index   Rank
                        Government and fiscal policy subindex                       4.61    42    Government and fiscal policy subindex                      4.61     42
                        Bond rating: composite                                      6.10     8    State and local taxes per capita /income per capita        4.16     43
                                                                                                  Workers’ compensation premium rates                        3.64     47
                                                                                                  Budget deficit, % of GSP                                   4.77     35
                                                                                                  Full-time-equivalent state and local government            4.04     43
                                                                                                  employees per 100 residents



                        Security subindex                                           4.96    29    Security subindex                                          4.96     29
                        Crime index, per 100,000 inhabitants                        6.28     5    Crime index change 2006-2007, %                            4.23     41
                        Murder index, per 100,000 inhabitants                       6.10     7    The BGA Integrity Index                                    3.24     49



                        Infrastructure subindex                                     4.95    31    Infrastructure subindex                                    4.95     31
                        Telephone penetration (combined Fed/state/local             5.45    18    Air passengers per capita                                  4.49     33
                        taxes as % of price)
                        Travel time to work                                         5.61    12    Electricity prices per million BTU                         4.28     41
                                                                                                  Median monthly housing costs                               4.91     31




                        Human resources subindex                                    6.00    3     Human resources subindex                                   6.00     3
                        % of population without health insurance                    5.65    13
                        % of population aged 25 and over that graduated from        6.17     5
                        high school
                        Unemployment rate, not seasonally adjusted                  5.82    11
                        % of population enrolled in degree-granting institutions    5.46    16

                        % of adults who are in the labor force                      6.37    7
                        Rate of nonfederal physicians per 100,000 inhabitants       6.89    4

                        % of students at or above proficient in mathematics,        6.25    6
                        grade 4 - public schools

                        Technology subindex                                         6.08    3     Technology subindex                                        6.08     3
                        Academic R&D per $1,000 GSP                                 5.95    7     Science & Engineering grad. students 100,000               3.97     46
                                                                                                  inhabitants
                        NIH support to institutions per capita                      5.83     7
                        Patents, per 100,000 inhabitants                            7.93     2
                        S&E degrees awarded per 100,000 inhabitants                 7.94     1
                        Scientists and engineers as % of labor force                5.20    15
                        Employment in high-tech industry as % of total              5.71    12
                        employment

                        Business incubation subindex                                4.54    44    Business incubation subindex                               4.54     44
                        Employer firm births per 100,000 inhabitants                4.98    20    Bank deposits per capita                                   4.65     36
                                                                                                  Venture capital per capita                                 4.44     42
                                                                                                  IPO, % of GSP                                              4.43     38
                                                                                                  Minimum wage                                               3.66     45



                        Openness subindex                                           5.10    17    Openness subindex                                          5.10     17
                        Exports per capita, dollars                                 6.33     5    % of population born abroad                                4.19     40



                        Environmental policy subindex                               6.07    3     Environmental policy subindex                              6.07     3
                        Toxic release inventory, pounds per 1000 sq. miles          5.96    1

                        Carbon emission per 1000 sq miles                           5.75    12
                        Air Quality Index                                           6.51     2
          State Index




                        Page 60 /                                                    Eighth Annual BHI State Competitiveness Report
VIRGINIA                                                                                                                    Index    Overall Rank




                                                                                                                                                        BHI
                                                                                                                             5.64           16
                       COMPETITIVE ADVANTAGES                                                  COMPETITIVE DISADVANTAGES

               Subindex/Variable                        Index   Rank                     Subindex/Variable                          Index        Rank
Government and fiscal policy subindex                    5.25    14    Government and fiscal policy subindex                         5.25         14
Workers’ compensation premium rates                      6.51     4    State and local taxes per capita /income per capita           4.60         31
Bond rating: composite                                   6.55     1    Budget deficit, % of GSP                                      3.71         47




Security subindex                                        5.00    26    Security subindex                                             5.00         26
Crime index, per 100,000 inhabitants                     5.95    11    Crime index change 2006-2007, %                               4.55         36




Infrastructure subindex                                  5.05    24    Infrastructure subindex                                       5.05         24
Telephone penetration (combined Fed/state/local taxes    5.79     9    Travel time to work                                           4.02         43
as % of price)
High-speed lines per 1000                                5.44    16    Median monthly housing costs                                  4.06         38
Air passengers per capita                                5.39    11
Electricity prices per million BTU                       5.57    16



Human resources subindex                                 5.02    26    Human resources subindex                                      5.02         26
Unemployment rate, not seasonally adjusted               5.61    15    % of population without health insurance                      4.75         32
% of students at or above proficient in mathematics,     5.37    18    Infant mortality rate, deaths per 1000 live births            4.66         35
grade 4 - public schools




Technology subindex                                      5.59    9     Technology subindex                                           5.59         9
Science & Engineering grad. students 100,000             5.38    16    Academic R&D per $1,000 GSP                                   4.15         42
inhabitants
S&E degrees awarded per 100,000 inhabitants              5.36    16    NIH support to institutions per capita                        4.54         31
Scientists and engineers as % of labor force             7.88     1    Patents, per 100,000 inhabitants                              4.41         32
Employment in high-tech industry as % of total           7.43     1
employment




Business incubation subindex                             5.38    7     Business incubation subindex                                  5.38         7
Bank deposits per capita                                 4.94    11
Venture capital per capita                               5.31     9
IPO, % of GSP                                            5.20    12
% of labor force that is represented by unions           6.40     2
Minimum wage                                             5.52     7

Openness subindex                                        4.80    27    Openness subindex                                             4.80         27
% of population born abroad                              5.32    15    Exports per capita, dollars                                   4.40         38
                                                                       Incoming foreign direct investment per capita, dollars        4.68         37

Environmental policy subindex                            5.01    28    Environmental policy subindex                                 5.01         28
                                                                       Toxic release inventory, pounds per 1000 sq. miles            4.89         31
                                                                       Carbon emission per 1000 sq miles                             4.95         35
                                                                                                                                                        State Index




              Eighth Annual BHI State Competitiveness Report                                                                        / Page 61
BHI           WASHINGTON                                                                                                                Index    Overall Rank
                                                                                                                                          6.57        6
                                      COMPETITIVE ADVANTAGES                                                COMPETITIVE DISADVANTAGES

                             Subindex/Variable                        Index   Rank                    Subindex/Variable                          Index   Rank
              Government and fiscal policy subindex                    5.10    22    Government and fiscal policy subindex                        5.10     22
              State and local taxes per capita /income per capita      5.39    15    Average benefit per first payment for unemployed             3.67     46

              Workers’ compensation premium rates                      5.59    14
              Bond rating: composite                                   5.21    19
              Full-time-equivalent state and local government          5.55    14
              employees per 100 residents



              Security subindex                                        5.65    7     Security subindex                                            5.65     7
              Crime index change 2006-2007, %                          6.99     3    Crime index, per 100,000 inhabitants                         4.10     37
              Murder index, per 100,000 inhabitants                    5.80    13
              The BGA Integrity Index                                  5.71    16

              Infrastructure subindex                                  4.75    39    Infrastructure subindex                                      4.75     39
              High-speed lines per 1000                                5.92    11    Telephone penetration (combined Fed/state/local taxes as     3.11     49
                                                                                     % of price)
              Air passengers per capita                                4.96    19    Travel time to work                                          4.27     40
              Electricity prices per million BTU                       5.70    11    Median monthly housing costs                                 4.54     35




              Human resources subindex                                 5.36    16    Human resources subindex                                     5.36     16
              % of population without health insurance                 5.63    15
              % of population aged 25 and over that graduated from     5.90    12
              high school
              Infant mortality rate, deaths per 1000 live births       6.32     2
              Rate of nonfederal physicians per 100,000 inhabitants    5.12    17

              % of students at or above proficient in mathematics,     5.62    13
              grade 4 - public schools




              Technology subindex                                      5.62    8     Technology subindex                                          5.62     8
              NIH support to institutions per capita                   6.09    5     Science & Engineering grad. students 100,000                 4.06     45
                                                                                     inhabitants
              Patents, per 100,000 inhabitants                         6.59    5
              Scientists and engineers as % of labor force             6.88    4
              Employment in high-tech industry as % of total           6.25    8
              employment




              Business incubation subindex                             4.85    31    Business incubation subindex                                 4.85     31
              Bank deposits per capita                                 5.04     8    IPO, % of GSP                                                4.48     34
              Venture capital per capita                               6.10     4    % of labor force that is represented by unions               3.38     47
              Employer firm births per 100,000 inhabitants             7.10     3    Minimum wage                                                 3.01     50




              Openness subindex                                        6.49    2     Openness subindex                                            6.49     2
              Exports per capita, dollars                              9.06     1
              % of population born abroad                              5.64    14

              Environmental policy subindex                            5.80    8     Environmental policy subindex                                5.80     8
              Toxic release inventory, pounds per 1000 sq. miles       5.67    17

              Carbon emission per 1000 sq miles                        5.58    18
              Air Quality Index                                        6.15     8
State Index




              Page 62 /                                                 Eighth Annual BHI State Competitiveness Report
WEST VIRGINIA                                                                                                          Index       Overall Rank




                                                                                                                                                  BHI
                                                                                                                         3.70         47
                       COMPETITIVE ADVANTAGES                                               COMPETITIVE DISADVANTAGES

               Subindex/Variable                      Index   Rank                    Subindex/Variable                            Index   Rank
Government and fiscal policy subindex                  5.19    17    Government and fiscal policy subindex                          5.19     17
State and local taxes per capita /income per capita    5.04    20    Bond rating: composite                                         3.88     44

Workers’ compensation premium rates                    5.79    11
Average benefit per first payment for unemployed       5.90     9

Full-time-equivalent state and local government        5.37    18
employees per 100 residents



Security subindex                                      5.64    9     Security subindex                                              5.64     9
Crime index, per 100,000 inhabitants                   5.88    13
Murder index, per 100,000 inhabitants                  5.50    20
The BGA Integrity Index                                5.90    12

Infrastructure subindex                                4.96    30    Infrastructure subindex                                        4.96     30
Telephone penetration (combined Fed/state/local        5.92     7    High-speed lines per 1000                                      2.99     49
taxes as % of price)
Electricity prices per million BTU                     6.00    2     Air passengers per capita                                      4.11     49
Median monthly housing costs                           6.35    2     Travel time to work                                            4.39     39




Human resources subindex                               4.41    40    Human resources subindex                                       4.41     40
Unemployment rate, not seasonally adjusted             6.10     8    % of population aged 25 and over that graduated from           3.69     43
                                                                     high school
                                                                     % of population enrolled in degree-granting institutions       4.57     32

                                                                     % of adults who are in the labor force                         2.78     50
                                                                     Infant mortality rate, deaths per 1000 live births             4.22     41
                                                                     % of students at or above proficient in mathematics, grade     4.23     38
                                                                     4 - public schools




Technology subindex                                    4.10    47    Technology subindex                                            4.10     47
                                                                     Academic R&D per $1,000 GSP                                    4.21     39
                                                                     NIH support to institutions per capita                         4.15     47
                                                                     Patents, per 100,000 inhabitants                               3.99     46
                                                                     Science & Engineering grad. students 100,000                   4.39     35
                                                                     inhabitants
                                                                     S&E degrees awarded per 100,000 inhabitants                    4.31     38
                                                                     Scientists and engineers as % of labor force                   3.84     46
                                                                     Employment in high-tech industry as % of total                 3.82     48
                                                                     employment
Business incubation subindex                           4.38    47    Business incubation subindex                                   4.38     47
                                                                     Bank deposits per capita                                       4.59     44
                                                                     Venture capital per capita                                     4.44     41
                                                                     Employer firm births per 100,000 inhabitants                   3.88     47
                                                                     IPO, % of GSP                                                  4.43     38
                                                                     % of labor force that is represented by unions                 4.60     33
                                                                     Minimum wage                                                   4.37     37
Openness subindex                                      4.35    46    Openness subindex                                              4.35     46
                                                                     Exports per capita, dollars                                    4.40     37
                                                                     % of population born abroad                                    3.85     50

Environmental policy subindex                          4.11    44    Environmental policy subindex                                  4.11     44
                                                                     Toxic release inventory, pounds per 1000 sq. miles             3.45     47
                                                                     Carbon emission per 1000 sq miles                              4.36     41
                                                                     Air Quality Index                                              4.53     36
                                                                                                                                                  State Index




    Eighth Annual BHI State Competitiveness Report                                                                                / Page 63
Wisconsin




        BHI               WISCONSIN                                                                                                                       Index    Overall Rank
                                                                                                                                                            5.33      20
                                                  COMPETITIVE ADVANTAGES                                                    COMPETITIVE DISADVANTAGES

                                         Subindex/Variable                           Index   Rank                    Subindex/Variable                             Index    Rank
                          Government and fiscal policy subindex                       4.76    37    Government and fiscal policy subindex                           4.76     37
                          Workers’ compensation premium rates                         5.35    18    State and local taxes per capita /income per capita             4.25     39
                          Average benefit per first payment for unemployed            5.24    20    Bond rating: composite                                          3.88     44

                          Full-time-equivalent state and local government             5.58    13    Budget deficit, % of GSP                                        4.24     42
                          employees per 100 residents




                          Security subindex                                           5.52    11    Security subindex                                               5.52     11
                          Crime index, per 100,000 inhabitants                        5.50    19    Crime index change 2006-2007, %                                 4.05     44
                          Murder index, per 100,000 inhabitants                       5.57    18
                          The BGA Integrity Index                                     6.94     1

                          Infrastructure subindex                                     5.07    21    Infrastructure subindex                                         5.07     21
                          Telephone penetration (combined Fed/state/local taxes       5.55    15    High-speed lines per 1000                                       4.24     40
                          as % of price)
                          Travel time to work                                         5.55    13    Air passengers per capita                                       4.44     36




                          Human resources subindex                                    5.65    10    Human resources subindex                                        5.65     10
                          % of population without health insurance                    6.40     3
                          % of population aged 25 and over that graduated from        5.82    14
                          high school
                          Unemployment rate, not seasonally adjusted                  5.54    17
                          % of population enrolled in degree-granting institutions    5.13    20

                          % of adults who are in the labor force                      6.14    9
                          % of students at or above proficient in mathematics,        6.00    7
                          grade 4 - public schools



                          Technology subindex                                         5.06    21    Technology subindex                                             5.06     21
                          Academic R&D per $1,000 GSP                                 5.60    12    Employment in high-tech industry as % of total employment       4.30     33

                          NIH support to institutions per capita                      5.10    16
                          Patents, per 100,000 inhabitants                            5.34    15
                          S&E degrees awarded per 100,000 inhabitants                 5.16    19




                          Business incubation subindex                                4.69    41    Business incubation subindex                                    4.69     41
                          Minimum wage                                                5.60     5    Venture capital per capita                                      4.56     31
                                                                                                    Employer firm births per 100,000 inhabitants                    4.18     41
                                                                                                    IPO, % of GSP                                                   4.53     31
                                                                                                    % of labor force that is represented by unions                  4.47     35



                          Openness subindex                                           4.75    32    Openness subindex                                               4.75     32
                                                                                                    Incoming foreign direct investment per capita, dollars          4.77     31
                                                                                                    % of population born abroad                                     4.37     32

                          Environmental policy subindex                               5.57    15    Environmental policy subindex                                   5.57     15
                          Toxic release inventory, pounds per 1000 sq. miles          5.55    20

                          Air Quality Index                                           5.73    11
            State Index




                           Page 64 /                                                  Eighth Annual BHI State Competitiveness Report
WYOMING                                                                                                                      Index    Overall Rank




                                                                                                                                                     BHI
                                                                                                                               5.94        9
                        COMPETITIVE ADVANTAGES                                                   COMPETITIVE DISADVANTAGES

               Subindex/Variable                           Index   Rank                    Subindex/Variable                          Index   Rank
Government and fiscal policy subindex                       4.61    41    Government and fiscal policy subindex                        4.61     41
State and local taxes per capita /income per capita         7.05     3    Budget deficit, % of GSP                                     4.83     31

Workers’ compensation premium rates                         5.45    15    Average benefit per first payment for unemployed             4.54     38
                                                                          Full-time-equivalent state and local government              1.01     50
                                                                          employees per 100 residents




Security subindex                                           5.23    24    Security subindex                                            5.23     24
Crime index, per 100,000 inhabitants                        5.53    18    The BGA Integrity Index                                      4.45     35
Murder index, per 100,000 inhabitants                       5.65    16



Infrastructure subindex                                     5.63    4     Infrastructure subindex                                      5.63     4
High-speed lines per 1000                                   6.05     8    Air passengers per capita                                    4.42     38
Travel time to work                                         6.35     7
Electricity prices per million BTU                          5.98     3
Median monthly housing costs                                5.66    15



Human resources subindex                                    5.66    9     Human resources subindex                                     5.66     9
% of population aged 25 and over that graduated from        6.42    1     Rate of nonfederal physicians per 100,000 inhabitants        3.84     48
high school
Unemployment rate, not seasonally adjusted                  6.53    3
% of population enrolled in degree-granting institutions    5.98    8

% of adults who are in the labor force                      6.54     6
% of students at or above proficient in mathematics,        5.75    12
grade 4 - public schools




Technology subindex                                         4.31    40    Technology subindex                                          4.31     40
Science & Engineering grad. students 100,000                5.16    19    Academic R&D per $1,000 GSP                                  4.45     37
inhabitants
                                                                          NIH support to institutions per capita                       4.16     46
                                                                          Patents, per 100,000 inhabitants                             4.25     41
                                                                          S&E degrees awarded per 100,000 inhabitants                  4.10     42
                                                                          Scientists and engineers as % of labor force                 4.34     36
                                                                          Employment in high-tech industry as % of total               3.67     50
                                                                          employment

Business incubation subindex                                5.15    16    Business incubation subindex                                 5.15     16
% of labor force that is represented by unions              5.57    18    Venture capital per capita                                   4.49     36
Minimum wage                                                7.83     1    Employer firm births per 100,000 inhabitants                 3.77     48
                                                                          IPO, % of GSP                                                4.43     38




Openness subindex                                           5.42    8     Openness subindex                                            5.42     8
Incoming foreign direct investment per capita, dollars      8.10    2     Exports per capita, dollars                                  4.02     45

                                                                          % of population born abroad                                  4.14     43

Environmental policy subindex                               5.64    12    Environmental policy subindex                                5.64     12
Toxic release inventory, pounds per 1000 sq. miles          5.88     4

Carbon emission per 1000 sq miles                           5.78    9
                                                                                                                                                     State Index




      Eighth Annual BHI State Competitiveness Report                                                                                  / Page 65
              About the Authors
BHI           Jonathan Haughton is Senior Economist at the Beacon Hill Institute and Assistant Professor of Economics
              at Suffolk University. He holds a doctorate in economics from Harvard University and has published
              widely in refereed journals on economic development and taxation.

              Frank Conte is Director of Communications and Information Systems at the Beacon Hill Institute. He
              holds a master’s degree in public policy from the McCormack Graduate School of Policy Studies at the
              University of Massachusetts. He is responsible for all aspects of the institue’s media outreach including
              its web presence. He also coordinates the institute’s internship program.

              Bradley Dreisbach is a Bachelor of Science candidate (Class of 2009) in Quantitative Economics at Tufts
              University.

              G.P. Manish is a PhD candidate in Economics at Suffolk University and a researcher at the institute. He
              holds a Master’s in Economics from the Gokhale Institute of Politics and Economics, Pune, India.

              Rawan Barri is a Bachelor of Science candidate (Class of 2009) in International Economics at Suffolk
              University.

              Acknowledgements
              The Beacon Hill Institute would like to gratefully acknowledge the assistance of staff Paul Bachman,
              Alfonso Penalver-Sanchez, Sarah Glassman and Michael Head as well as Ashley Mowatt of the Economics
              Department as well as students James Nolet and Sofia Pinheiro. Summer interns Jonathan Ritter, Mark
              Adams and Matthew Schuster also contributed to this report.

              About The Beacon Hill Institute at Suffolk University
              The Beacon Hill Institute (BHI) is an independent, nonpartisan economic research organization located in
              the Department of Economics at Suffolk University in Boston, Massachusetts. Articles and references to
              BHI’s work have appeared in leading publications, including the Boston Globe, New York Times, Wall Street
              Journal, Los Angeles Times Magazine, The New York Sun, U.S. News & World Report and scholarly
              publications such as State Tax Notes and the National Bureau of Economic Research’s Working Papers
              Series. Its work has also appeared on CBS News, Fox News, CBS4Boston and WBUR-FM, public radio. For
              the last seven years, BHI has been a leader in the development of econometric models for the analysis of
              state tax policy changes, interstate economic competitiveness and community economic impact studies.

              The Beacon Hill Institute has developed and built STAMP (State Tax Assessment Analysis Modeling
              Program) models for 25 states and LAMP (Local Area Assessment Modeling Program) models for 3 cities,
              including New York City. In addition to tax modeling, BHI has customized economic models for public
              construction project costs, public school performance and alternative energy. The Institute has also
              provided state revenue forecasts and presented them to the Massachusetts Joint Legislative Committee
              for Ways and Means for the last four fiscal years.

              Founded in 1906, Suffolk University is a fully accredited institution with over 9,000 students and an
              annual operating budget of $220 million. It employs over 300 full-time faculty members, offers more
              than 50 undergraduate and graduate degree and certificate programs, and is ranked “competitive” by
State Index




              Barron’s. In 1999 it opened a now-thriving branch campus in Dakar (Senegal) in addition to its existing
              branch campus in Madrid (Spain). The Suffolk University Economics Department features 13 full-time
              faculty members and offers degrees at the undergraduate and graduate levels including a PhD program.
              Departmental research strengths include international trade, economic development, national and
              international taxation policy, globalization, and industrial organization.

                         © 2008 by the Beacon Hill Institute for Public Policy Research at Suffolk University


                Page 66 /                          Eighth Annual BHI State Competitiveness Report
                                                                                                                                    BHI
                                                                       Subindexes, Rank in 2008
                                Govt & Fiscal                            Human
                   Overall                       Security    InfrStrc                   Tech     Biz Incub. Openness Enviro Plcy
                                    Policy                              Resources
                 Index Rank       I        R      I     R     I     R     I    R      I      R     I     R    I   R    I      R
Massachusetts      7.33     1    4.71       34   6.16    3   4.21 41 7.09        1 8.83        1 6.95      3 5.39   9 4.28 43
Utah               6.79     2    6.45        4   4.99   27   5.60 11 6.18        7 5.70       12 7.56      2 4.95 22 4.64 36
North Dakota       6.75     3    6.39        5   6.14    4   6.00     7 6.48     4 5.20       20 4.93 23 4.54 41 6.13           1
Colorado           6.73     4    4.97       30   6.92    1   5.67     9 5.42 20 6.21           4 6.09      6 4.71 34 5.73       9
Idaho              6.58     5    5.33       20   5.75   13   6.88     3 5.13 24 5.20          19 6.29      5 4.70 35 5.89       7
Washington         6.57     6    5.24       22   6.02    7   4.30 39 5.53 16 5.83              8 4.68 31 6.49       2 5.80      8
Minnesota          6.17     7    5.01       27   5.80   12   5.69     8 6.54     2 5.79       10 4.72 30 4.84 26 5.48 18
Oregon             5.97     8    5.78       12   5.38   21   6.52     5 4.88 29 5.40          17 4.18 42 5.25 15 5.49 17
Wyoming            5.94     9    4.04       41   5.36   24   6.78     4 5.98     9 4.07       40 5.34 16 5.42       8 5.64 12
Montana            5.88   10     4.77       32   6.09    6   6.98     2 5.27 22 4.81          29 5.15 19 4.18 50 5.98           4
South Dakota       5.75   11     5.87       11   5.37   23   5.57 14 5.84 11 4.12             37 5.61 10 4.23 49 6.12           2
Iowa               5.74   12     5.37       19   5.73   14   6.19     6 6.32     5 5.00       25 3.79 46 4.64 37 5.52 16
Vermont            5.69   13     4.03       42   4.94   29   4.85 31 6.48        3 6.45        3 3.99 44 5.10 17 6.07           3
Nebraska           5.68   14     5.51       16   5.92   10   5.13 25 6.08        8 4.96       26 4.73 29 4.53 42 5.57 14
Nevada             5.64   15     6.57        2   4.44   37   7.22     1 4.06 41 3.34          50 5.75      8 5.33 11 5.11 25
Virginia           5.64   16     5.62       14   5.01   26   5.13 24 5.03 26 5.80              9 5.85      7 4.80 27 5.01 28
New Hampshire      5.63   17     5.39       18   5.63   16   4.41 36 6.24        6 5.76       11 4.87 26 4.60 38 5.38 20
Kansas             5.62   18     4.97       31   4.84   30   5.60 12 5.82 12 5.03             23 4.88 25 4.85 25 5.91           6
Delaware           5.37   19     5.05       24   4.40   38   4.80 33 5.10 25 5.50             14 8.53      1 5.27 14 2.92 50
Wisconsin          5.33   20     4.41       37   5.81   11   5.19 21 5.97 10 5.08             21 4.33 41 4.75 32 5.57 15
Connecticut        5.16   21     4.01       43   6.22    2   4.32 38 5.74 13 5.86              7 4.54 36 5.33 12 4.42 41
Arizona            5.10   22     6.20        8   4.45   36   5.03 27 4.81 32 4.69             32 5.44 12 5.23 16 4.46 39
Texas              4.94   23     5.25       21   4.38   39   4.02 42 3.87 44 4.78             30 5.38 13 6.11       3 5.15 23
Alaska             4.82   24     2.72       50   4.97   28   5.37 16 4.50 34 4.11             38 3.26 50 7.08       1 5.68 11
California         4.70   25     3.19       47   5.61   18   3.31 48 4.18 37 5.92              6 5.19 18 6.03       4 4.87 32
Maine              4.70   26     3.84       45   6.11    5   4.50 35 5.64 14 3.87             46 4.73 28 4.49 43 5.92           5
North Carolina     4.68   27     5.55       15   4.24   41   5.59 13 4.15 39 5.04             22 5.66      9 4.72 33 4.36 42
Maryland           4.66   28     4.98       28   4.51   35   3.11 49 5.61 15 7.29              2 5.35 15 4.79 29 3.72 46
Missouri           4.61   29     6.20        7   4.37   40   4.60 34 4.90 27 4.86             28 4.68 32 4.48 44 4.99 29
Michigan           4.60   30     5.02       26   4.82   31   5.33 17 4.53 33 5.28             18 3.36 49 5.08 18 5.13 24
Rhode Island       4.58   31     4.21       39   5.64   15   3.91 45 5.15 23 5.96              5 4.39 38 4.87 24 4.66 35
Florida            4.58   32     6.74        1   3.80   45   3.64 47 4.23 36 3.99             43 5.61 11 5.28 13 5.07 26
Illinois           4.45   33     4.68       35   4.56   33   4.27 40 4.81 31 5.01             24 4.37 39 5.34 10 4.91 30
New Mexico         4.39   34     5.03       25   3.67   46   5.16 22 4.17 38 5.45             15 4.80 27 4.57 40 5.34 21
New York           4.38   35     3.21       46   5.62   17   2.13 50 5.45 19 5.57             13 4.66 33 5.74       5 5.04 27
Indiana            4.37   36     6.33        6   4.56   34   5.32 18 4.85 30 4.48             35 4.36 40 4.98 20 3.45 48
Georgia            4.28   37     5.88        9   2.89   49   5.21 20 3.70 47 4.45             36 6.45      4 4.80 28 4.50 38


                                                                                                                                                       State Rankings 2008
Kentucky           4.21   38     3.96       44   5.49   20   5.42 15 4.06 42 3.97             44 4.65 34 5.02 19 4.81 33
Pennsylvania       4.18   39     4.48       36   5.38   22   4.40 37 5.48 17 5.44             16 4.17 43 4.58 39 3.95 45
Oklahoma           4.17   40     4.34       38   4.60   32   5.13 23 4.39 35 4.10             39 5.06 21 4.33 47 5.60 13
Tennessee          4.16   41     6.49        3   3.53   47   5.24 19 3.75 45 4.04             41 5.29 17 4.77 30 4.43 40
                                                                                                                                     Listing by Rank


New Jersey         4.15   42     2.91       49   6.01    8   3.90 46 5.39 21 4.89             27 5.11 20 5.66       6 3.28 49
Arkansas           4.03   43     5.23       23   3.95   43   4.84 32 4.01 43 3.58             49 5.35 14 4.37 45 5.70 10
Ohio               3.95   44     4.18       40   5.59   19   5.64 10 4.89 28 4.73             31 3.82 45 4.77 31 3.49 47
Hawaii             3.94   45     3.14       48   5.34   25   4.00 43 5.46 18 4.51             34 3.53 48 4.97 21 5.41 19
South Carolina     3.93   46     5.71       13   3.92   44   5.11 26 3.50 48 4.00             42 4.97 22 4.92 23 4.51 37
West Virginia      3.70   47     5.47       17   6.00    9   4.89 30 4.13 40 3.79             47 3.66 47 4.35 46 4.11 44
Alabama            3.39   48     4.97       29   3.01   48   4.97 28 3.72 46 4.55             33 4.45 37 4.66 36 4.67 34
Louisiana          3.30   49     4.74       33   1.87   50   4.93 29 3.21 49 3.93             45 4.89 24 5.54       7 4.90 31
Mississippi        3.12   50     5.88       10   4.23   42   3.99 44 2.30 50 3.77             48 4.61 35 4.25 48 5.21 22




          BHI State Competitiveness Report 2008                                                              / Page 67
The Beacon Hill Institute for Public Policy Research
                 Suffolk University
                  8 Ashburton Place
                 Boston, MA 02108
       Phone: 617-573-8750 Fax: 617-720-4272
                 bhi@beaconhill.org
             http://www.beaconhill.org

				
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