Virginia Next-to-Last in Motley Fool Ranking

Crescent Dunes solar project near Tonopah, NV. Photo:  Wikipedia

by Steve Haner

If you need another reason to break into peals of laughter over the recent CNBC “Top States for Business” ranking, consider this.

In the story about the infrastructure rankings, while praising the state of Nevada, the illustration provided was the aerial shot of the Tonopah Solar Energy facility. The failed, now-in-bankruptcy (also here) Tonopah Solar Facility. Shades of Virginia’s clean energy future to come? But I digress. 

Following my earlier post, a legislator asked me what happens to Virginia’s ranking if that new “Life, Health and Inclusion” category is disregarded. It provided 15% of Virginia’s winning 1,587 combined points on the ten categories, and in contrast provided about 9 %of North Carolina’s 1546 combined points (ranking second) and less than 7% of Texas’ 1503 combined points (ranking fourth).

Disregard that category, and North Carolina is first, Texas second and Tennessee moves to third. Virginia falls to fourth. For another example, Utah was also boosted substantially by “Life, Health and Inclusion” (13%of its points) and falls out of the top five without them, replaced by Georgia moving up.

A fourth-place finish for Virginia would still have provided significant bragging rights for Democratic Governor Ralph Northam, but there would have been some nagging questions, since it would have been a decline from the last top ranking in 2019. Likewise, without that category, Minnesota and Colorado might have fallen out of the top ten, and Florida and Indiana might have climbed in.

The network’s justification for overweighting “Life, Health and Inclusion” is that corporate location managers look down on a state that requires photo identification for voting or lacks a host of anti-discrimination laws with punitive damages and private rights of action. That’s their story and they are sticking to it. The actual job growth and personal income stats tell a different tale.

And so does another 2021 ranking provided by another national Wall Street-connected online outlet, The Motley Fool. It was cited in the Republican statewide candidates’ response to the CNBC results, found on the Glenn Youngkin website (but not until the day after the CNBC story broke and flew around Virginia.)

Last updated in January 2021, The Blueprint, A Motley Fool Service, had Virginia number 49, one of the worst locations to be starting a new small business. Montana was praised as the best, and Virginia was at the bottom near Connecticut, the District of Columbia, Maryland, Rhode Island, and New Jersey.

Their criteria?

Factors were weighted as follows:

  • Tax Climate:2

  • Consumer Spending in State: 2

  • Rate of New Entrepreneurs: 15

  • Business Survival Rate: 2

  • Labor Costs: 15

  • Climate: 1

It looks like Virginia came in dead last on “rate of new entrepreneurs.” It did badly compared to others on all of them. “Climate” is the general business climate. Does a bad score on this ranking cancel out the good one from CNBC? Not really, but careful voters should examine both closely.

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12 responses to “Virginia Next-to-Last in Motley Fool Ranking”

  1. John Harvie Avatar
    John Harvie

    Steve, I wonder how many folks make serious business decisions based on these articles which are IMHO 90% pure fluff. Each one in some way or other seems to contradict all the others. They do adequately fill column inches, however. How does one assign weights to such stuff?

    1. Stephen Haner Avatar
      Stephen Haner

      The reader’s decision, I’m sure.

      1. Nancy Naive Avatar
        Nancy Naive

        I told you how to do it, but listen to me? Nooooo.

      2. Nancy Naive Avatar
        Nancy Naive

        I told you how to do it, but listen to me? Nooooo.

  2. DJRippert Avatar

    And the Motley Fool was founded and remains headquartered in Alexandria, Virginia. Like many in Northern Virginia they can see through the idiocy of woke Northam and the liberals in Richmond. Virginia is circling the drain and anybody paying attention here knows it.

  3. LarrytheG Avatar

    there are two distinct aspects to this kind of ranking:

    1. – the things that are said to be “good” criteria for businesses

    2. – the actual outcomes – for instance, which states actually have more small businesses – as opposed t criteria that are said to be good for the formation of small businesses.

    The “criteria” is where the organization like Motley Fool get to state what they BELIEVE is good for business – but it may well not match up with the actual results.

    Along those same lines , CNBC has weighed in on “Life, Health and Inclusion” but what metrics actually demonstrate the outcomes ?

    Do states that score high on “Life, Health and Inclusion” have more, better diverse workforces that actually make a meaningful difference?

    Will there end up being a meaningful difference in the workforce demographics between states that rank high on “Life, Health and Inclusion” and states that rank low?

    Finally, for small businesses, IMHO, one of the bigger threats to small businesses is not govt policies (that impose a leveliized playing field – bad or good but equal to all businesses ) , but competitors, especially larger ones with deeper fiscal strength and higher level management and more efficient operations.

    A new Walmart wipes out a bunch of small businesses wherever they locate and a startup Walmart has much more staying power financially than a sole proprietorship.

    Every time a Walmart (or other big competitor) decides to add services like check cashing or hair styling or eye glasses or hearing aids -they totally scramble the small business environment near them.

    And I almost never hear of Walmarts deciding to not build in a state because the business environment is hostile or not good. They adjust and adapt and put their store up – and small businesses around them suffer.

    1. Stephen Haner Avatar
      Stephen Haner

      Yeah, but retail’s goal is to be everywhere. Not so for industry or other business lines. The rankings have limited value, but I would disagree that government policy is unimportant. For a start up, the licensing, land regs and other hassles can be far more onerous than for a firm with a big development staff.

      1. Brian Leeper Avatar
        Brian Leeper

        As I recall there’s a Wal-Mart in southwest Virginia that folded up. They didn’t relocate to a nearby location–they closed, and the nearest Wal-Mart is tens of miles away.

  4. Nancy Naive Avatar
    Nancy Naive

    Let me be DJ… Have you also checked your horoscope?

  5. Eric the half a troll Avatar
    Eric the half a troll

    “Virginia’s ranking if that new “Life, Health and Inclusion” category is disregarded”

    AKA, Alabama…

  6. Given how Northam has been touting the CNBC ranking, I think it is fair and reasonable for Steve to draw attention to the Motley Fool ranking. Let’s be clear, however, the two scorecards are ranking different things. CNBC is ranking states for corporate investment. Motley Fool is ranking entrepreneurial vitality. Very different things.

    That being said, would we prefer an economy that depends upon corporate investment for job growth — much of it from foot-loose out-of-state businesses with no long-term commitment to the state — or a state that generates job growth internally through the efforts of home-grown entrepreneurs? Which creates more wealth-creation opportunities for Virginians?

    Entrepreneurial, new business formation without a doubt.

    Northam is fortunate to have one of the top corporate recruitment professionals in the country, in the form of Stephen Moret. Sadly, Moret has no counterpart in the area of the building of entrepreneurial ecosystems. I fully expect the new swath of progressive legislation that just became law to have a much worse impact on small business than big business. I have seen no indication that Northam has the slightest understanding of what it takes to create an entrepreneurial economy.

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