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One of Washington's big strengths is reduced red tape. The state's Office of Regulatory Assistance helps individuals and businesses sort through the many layers of government regulation all in one place. If several state agencies need to be contacted for a new business to obtain permits, the work can be handled from one source.
That's part of why Washington has had more businesses open per capita the past three years than any other state in the country. Another reason: a culture of innovation.
"Innovation is the common thread throughout every industry in Washington," says Juli Wilkerson, who heads Washington's economic-development office. Venture-capital spending in the state is the fifth-highest in the country, totaling $2.6 billion the past three years.
This climate of creativity dates to the early 1900s, when John Nordstrom opened his first shoe store, William Boeing built his first airplane and Friedrich Weyerhaeuser built the world's largest sawmill of its time. Today, Nordstrom (JWN, news, msgs), Boeing (BA, news, msgs) and Weyerhaeuser (WY, news, msgs) have combined sales of $90 billion.
Another attractive part of Washington's economy is its low energy costs -- 28% below the national average last year, according to economic-research firm Moody's Economy.com. The state's energy costs are the sixth-lowest in the country. Power costs for fellow Pacific-coaster California are twice as high.
No wonder Washington is booming. "Businesses that we are competing for now typically tell us that they have eliminated California from their thinking because of the time that it takes to get what they need to construct or expand and the cost of doing business," says Gregoire.
Washington is also prime territory for companies looking to do business in Asia and Europe. The Seattle-Tacoma port is the fourth-largest in the United States, behind those in Long Beach, Calif., Los Angeles and New York.
As the birthplace of some of the world's most powerful companies, Washington is also home to many of the world's richest individuals, including Microsoft's (MSFT, news, msgs) Bill Gates and Paul Allen, Amazon.com's (AMZN, news, msgs) Jeffrey Bezos, cable magnate Craig McCaw and Starbucks (SBUX, news, msgs) founder Howard Schultz. (Microsoft is the publisher of MSN Money.) This is helping spur more economic activity in the region.
"We want to be a center for global health," says Gregoire.
More from MSN Money and Forbes.com
Helping to fuel the idea of a Washington as a global health center is the Bill & Melinda Gates Foundation, based in Seattle. The foundation, which strives to enhance health care around the world, has an endowment of $33 billion. Seattle is also home to the Fred Hutchinson Cancer Research Center, one of the leading cancer research institutes in the world.
With a highly educated work force and a pro-business regulatory environment, Washington is poised to remain one of the best states to do business in -- and to climb even higher on next year's list.
| State | Costs | Labor | Regulation | Economy | Growth | Quality of life |
|---|---|---|---|---|---|---|
1. Virginia | 17 | 5 | 1 | 11 | 8 | 6 |
2. Utah | 12 | 11 | 17 | 9 | 16 | 12 |
6 | 22 | 2 | 27 | 5 | 30 | |
4. Texas | 21 | 26 | 7 | 10 | 2 | 28 |
5. Washington | 33 | 4 | 5 | 16 | 4 | 32 |
6. Idaho | 11 | 10 | 30 | 3 | 23 | 27 |
7. Florida | 31 | 15 | 12 | 1 | 3 | 35 |
8. Colorado | 35 | 2 | 15 | 33 | 1 | 23 |
9. North Dakota | 5 | 37 | 16 | 11 | 42 | 14 |
10. Minnesota | 32 | 13 | 19 | 23 | 26 | 1 |
This article was reported and written by Kurt Badenhausen for Forbes.com.
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