CNBC To Pick Top Business States

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    NEWSLETTERS

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    As concerns about the global economic recovery continue to strike fear in financial markets, U.S. stocks were predicted to fall again today, following yesterday's sharp drop. The losses from yesterday showed the Dow losing 3.6%, the S&P 500 dropping 3.9% and the Nasdaq 4.1%

    California may be something of a nation state, national trendsetter and the tech capital of America, but when it comes to CNBC’s Top States For Business, neither its size, diversity nor personality do The Golden State much good.

    When CNBC announces its 2010 rankings on TV and the Internet this Tuesday, California will almost certainly take the No. 1 spot in the Technology and Innovation and Access to Capital categories for the fourth year in a row. (You can see how the two keep close company.)

    Despite such dominance, California’s overall ranking slipped to 32 in 2009 from 25 in 2008, one of the biggest moves.

    That’s largely the result of equally significant declines in two categories: Quality of Life (19/4) and Economy (12/7).

    A lot of states would be happy to own those rankings; after all, California scores in the top 20 in the majority of the ten categories.

    California’s upside, however, will be limited as long as it scores very poorly in three categories. In the past three years, the state has ranked either 48 or 49 in Cost of Doing Business, Business Friendliness and Cost of Living.

    And this is where the weighting of categories can greatly affect rankings.

    Cost of Doing Business, at 450 points, is the single most important category (California managed just 76 points in 2009) whereas Access to Capital is a mere 50 points.