CEOs Speak Out: MA 4th Worst for Business

Saturday, May 11, 2013

Ashley Klann, GoLocalWorcester Contributor

Some of the nation's top CEOs are speaking out about the state of business across the country and have named Massachusetts the forth worst to do business.

The annual survey was published by Chief Executive Magazine and gives another perspective of the recovering economy of the Bay State.

At the same time, the fourth annual Enterprising States report out this week from the U.S. Chamber of Commerce, a Washington, D.C., based business advocacy organization. Their ranking contested that the Commonwealth has a lot of redeeming qualities for anyone starting a new business. What reasoning did both studies give?

CEOs Speak Out

According to the nation’s surveyed CEOs, Massachusetts landed in the 47th spot – the forth worst state for business. California was named the worst state for business, followed by New York and Illinois. New Jersey came in at fifth, behind the Bay State.

“Business is too hard without dealing with piles of regulations that are constantly changing,” said Rick Waechter, CEO of Boston Magazine. “I believe there have to be controls, but keep them simple and straight forward—and most importantly, don’t make it a moving target.”

The survey measured the sentiments of CEOs on a range of issues, including regulations, tax policies, workforce quality, educational resources, quality of living and infrastructure. For the 2013 survey, 736 CEOs from across the country evaluated the states between Jan. 16 and Feb. 14, 2013.

CEOs had some words of wisdom for those who came in the bottom tier, including complaints about red tape and the importance of government officials building relationships with business owners to better understand their needs.

“When you investigate acquiring businesses in some of the states rated poorly for business conditions, the anecdotes all wind up being true,” said Kevin Hawkesworth, President and CEO of Florida-based Shaw Development. “The horror stories about these states are real.”

Texas led the best five states for business followed by three states from the South – Florida, North Carolina, and Tennessee. Indiana came in fifth.

“The playbook for successful states boils down to three simple moves: engage in real dialogue with business leaders, adapt policies to create an attractive environment, and effectively communicate your story to real job creators,” said Marshall Cooper, CEO of Chief Executive. “This year’s rankings prove that smart policies result in increased investments, jobs and greater overall economic activity.”

Best States to Start a Business?

While CEOs are bashing the Bay State’s changing regulations and negligence to business owners, the U.S. Chamber of Commerce released their Enterprising States report, naming the top states for those looking to start their own business. CEOs may think the Commonwealth has a thing or two to learn, but this business advocacy organization disagrees.

The study measured five aspects of policy including exports and international trade, entrepreneurship and innovation, business climate, talent pipeline, and infrastructure. U.S. states were ranked for their performance in each category.
Massachusetts came in at number five.

The group also measured and ranked overall economic climate and growth in each state, as well as the number of high-tech businesses in the state, programs that support entrepreneurs, and STEM (science, technology, engineering and mathematics) job concentration.
The Bay State scored high marks for being home to some of the most prestigious research institutes in the country. The study pointed out including Harvard University and Massachusetts Institute of Technology, is hubs for STEM jobs.

The Good, the Bad…

Despite what some national CEOs have to say about the Bay State’s lack of solid regulations, the U.S. Chamber of Commerce still attests that the stage is set for the state to come back strong from the recession.

The Chamber’s survey also noted that in 2012, the state legislature passed a bill that will allow the Massachusetts to invest in several long-term research and development activities, provide $1 million for paid internships in startups, and another $1 million for a program to mentor entrepreneurs about how and when to access venture capital funding.