Sunday, June 17, 2018
Business

Best business state: Still No. 2 but closing gap with Texas, Florida keeps recruiting

Texas continues its 10-year historical position as the best state overall; but Florida, which ranks No. 2, is edging up and even overtaking Texas in its quality of living environment.

Chief Executive magazine annual CEO survey of best states for business

• • •

To the delight of Florida's governor, his favorite annual survey of the best and worst states for business came out this week. And though Florida, a perennial No. 2, failed to overtake top pick Texas, the U.S. survey of 500 CEOs by Chief Executive magazine hinted that the Sunshine State shows fresh momentum and is closing the gap between it and the Lone Star State.

Gov. Rick Scott, interviewed by the magazine about his state's strong showing, said Florida has learned from Texas how to tell its story better. And he said it helps that Florida has cut taxes 25 times to the tune of about $400 million.

That message — lower taxes, less regulation — is manna from heaven to most CEOs, whose feedback forms the basis of the survey.

That's why "antibusiness" California ranked last among states as the worst for business. It's why poorly ranked states are high-tax, heavy-regulation places such as New York and Illinois.

But Scott also told Chief Executive something more interesting. He referred to the Jim Collins "flywheel effect," where momentum is generated as more big-name companies invest in Florida. Jim Collins is a business consultant and author of such respected books as Built to Last and Good to Great, which examines what companies that sustain remarkable success for a long period have in common.

The flywheel effect is how Collins describes the real secret behind how good companies become great. "There was no miracle moment," Collins told Fast Company magazine in an interview. "Instead, a down-to-earth, pragmatic, committed-to-excellence process — a framework — kept each company, its leaders and its people on track for the long haul. In each case, it was the triumph of the 'flywheel effect' over the 'doom loop,' the victory of steadfast discipline over the quick fix."

In that spirit, big corporations such as Bristol-Myers Squibb that expand to Florida prompt others to see why they did.

"When companies like Hertz, Amazon, Deutsche Bank and Verizon add jobs here, it causes more people to look at us," Scott said. "Business is comfortable that we'll keep the tax base low and improve our workforce."

Hertz did more than expand to Florida. Last year it moved its entire headquarters from New Jersey to Estero, south of Fort Myers. That move has emboldened Tampa Bay economic leaders to unleash plans to pursue more headquarters of high-profile companies based in high-tax states to relocate to this metro area, on either side of Tampa Bay.

That's a goal that somehow has seemed beyond Tampa Bay's grasp. But not now, when we are No. 2 and closing on No. 1.

Contact Robert Trigaux at [email protected]

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