Policy Documents

Eleventh Annual State Competitiveness Report

Jonathan Haughton, Frank Conte, Erta Muca –
July 31, 2012

“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.”

How does one state create more economic activity, and hence more income for its citizens, than other states? What special characteristics or attributes lead to generating this higher income? Since 2001, BHI’s StateCompetitiveness Report has identified the qualities that allow some areas to excel in income generation, andthe qualities that inhibit other areas from attaining the same level of competitiveness. This question quicklyleads on to others:

• How are these qualities measured?

• What standard should be used to determine whether a state is competitive or not?

• Indeed, why is it even interesting to measure competitiveness?

• How does economic competitiveness differ from interstate competition for workers, firms and capital?

This State Competitiveness Report uses these questions as a starting point. The indexes are designed to measure the long-term competitiveness of an area, and use a similar approach to the one taken in BHI’s earlier studies of state competitiveness.