To fully understand the health of an economy, we must understand how that economy is growing and its productivity compared to other markets. This metric measures how regions have grown, how they are globally connected, and the tax cost of doing business in their state.

To measure this, we use six metrics with three key themes. First, we measure the three-year growth of the regional economies using three metrics: gross domestic product (GDP), exports and employment. GDP and employment growth should be intuitive, since competitive and healthy economic regions should be adding jobs and expanding their economies. Exports are an important proxy to measuring the growth in a region’s global connectedness.

We also look at exports as a share of a region’s GDP and GDP per employee. The former is sometimes referred to as “export intensity,” and is a common proxy to measure the global connectedness of a region. GDP per employee is an important measure of the productivity of an economy. Finally, we use the State Business Tax Climate Index from the Tax Foundation to measure the tax burden of a business operation in a given state. Tax burden is a flawed measure, since it is only part of the overall cost of doing business in a state, but is the most effective measure for what is consistently reported and available.

How we score


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