Worst To First: How Business-friendly Is Your State?

Worst To First

Say you're an entrepreneur thinking of starting a solution provider business. And, you can go anywhere in the U.S. to do it. Where do you go?

The following is a ranking of all 50 states, from the worst (No. 50) to the best (No. 1) for launching a solution provider business. It's based on an analysis of a wide range of data conducted by CRN Research, from the educational and experience level of a state's available workforce to labor and business costs to a state's tax and regulatory burden.

The analysis also ranks states for their potential for innovation and growth, as well as for business opportunities.

We've also cross-referenced the findings with CRN's 2013 2013 Solution Provider 500, listing on each slide how many providers call that state home, and CRN's Tech Elite 250 (2013), Next-Gen 250 (2013) and Fast Growth 100 and 50 Up-And-Comers (2012) lists.

This report originally ran in September exclusively on the CRN Tech News App, available in the iTunes App Store or the Windows Store.

No. 50: West Virginia

Solution Provider 500 Companies: 0

West Virginia has some things going for it, including relatively low labor and business costs (ranked No. 23), comparatively low taxes and limited regulations (No. 25), and moderate energy costs (No. 18). But, it is dead last (No. 50) in our analysis when it comes to the overall education level and experience of its available workforce. Only 18.5 percent of its adult population hold a bachelor's degree or higher -- lowest among all states. West Virginia was ranked No. 49 for innovation and growth (including a No. 50 rank in entrepreneurial activity) and No. 48 in business opportunities. The state offers a relatively low cost of living (No. 14). But, low scores for other quality of life factors, including No. 49 in median household income and No. 46 in the number of people that use the Internet, bring down its overall quality of life/cost of living rank (No. 43).

West Virginia has no solution providers on the Tech Elite 250, Next-Gen 250 or Fast Growth 100 and 50 Up-And-Comers.

No. 49: Hawaii

Solution Provider 500 Companies: 0

As a place to start and grow a solution provider business, Hawaii isn't paradise, not with its high labor/business costs, which ranked it No. 46. It also has the highest energy costs, and its high cost of living ranks it No. 44 in that criteria.

Hawaii is in the middle of the pack in the areas of workforce experience and education (No. 25). It's No. 43 in the tax and regulatory burden on businesses: While it has a low corporate income tax, it's one of only four states that charge a tax on computer services (4 percent in Hawaii). And it's ranked a poor No. 48 for its regulatory environment. While it may be a great place to learn to surf, the state's climate for innovation and growth was only No. 45 among the states, and its overall ranking for providing business opportunities was ranked a meager No. 49.

Hawaii has no solution providers on the Tech Elite 250, Next-Gen 250 or Fast Growth 100 and 50 Up-And-Comers lists.

No. 48: Wyoming

Solution Provider 500 Companies: 1

With fewer than 600,000 residents, Wyoming is the most sparsely populated state in the U.S. So, it's no surprise the state is ranked No. 50 in our analysis for business opportunities and No. 48 for growth and innovation potential. The small number of residents also figures into its No. 40 rank in the availability of experienced, educated workers. When you can find people, labor/business costs are low (ranked No. 10), and Wyoming is one of a few states with no corporate income tax. The overall ranking for personal lifestyle/cost of living is excellent (No. 3), thanks in part to the fact Wyoming is one of three states that has no individual income tax. But, tough regulations and high property taxes drop its overall taxes and regulations ranking to No. 30.

One solution provider from the Tech Elite 250 list is based in Wyoming, but there are no Wyoming solution providers on either the Next-Gen 250 or Fast Growth 100 and 50 Up-And-Comers lists.

No. 47: Arkansas

Solution Provider 500 Companies: 0

Arkansas suffers from its low ranking (No. 45) for the education and experience of its available workforce, as well as for its low ranking (No. 47) for innovation and growth potential.

Labor and business costs are low (ranked No. 6). And, the state is in the middle of the pack for overall taxes and its regulatory environment (No. 19) and business opportunities (No. 29).

While the cost of living is low (No. 4), the state is dead last (No. 50) in the overall quality of life/cost of living category, due to such metrics as the percentage of its population with Internet access (No. 50), low median household income (No. 48) and high crime rates (No. 48).

Arkansas has one solution provider on the Next-Gen 250 list, but none on the Tech Elite 250 or Fast Growth 100 and 50 Up-And-Comers lists.

No. 46: Mississippi

Solution Provider 500 Companies: 4

Mississippi, like other Southern states, has relatively low taxes and employment costs, along with low rankings for innovation prospects and business opportunities. The state ranks No. 7 for overall labor and business costs and No. 11 for overall taxes and regulation. But, the low education and workforce experience levels rank it only No. 47: The state was among the lowest in the number of IT jobs (as a share of private-sector employment), and only 19.8 percent of adults have a bachelor's degree or higher -- second only to West Virginia.

Despite scoring fairly well in entrepreneurial activity, Mississippi ranks No. 46 in innovation and growth prospects: It's last among all 50 states for inventor patents. And, it's No. 42 in overall business opportunities.

There are two Mississippi-based solution providers on the Tech Elite 250, two on the Fast Growth 100 and 50 Up-And-Comers, and one on the Next-Gen 250 list.

No. 45: South Dakota

Solution Provider 500 Companies: 0

South Dakota is best known for the majestic Mount Rushmore, but as a place for innovation and growth, not so much. The state is ranked No. 50 for innovation and growth prospects. That's due to the low percentage of scientists and engineers in the state's private sector, available high-tech jobs and entrepreneurial activity. But, surprisingly, the state ranks No. 24 in inventor patents.

South Dakota also scores relatively low in business opportunity (No. 46), the education and experience of its workforce (No. 38), and taxes and regulations (No. 37). That last score undoubtedly takes a hit from the 4 percent tax on computer services levied by the state. The state does well in overall labor and business costs (No. 9). But, it really shines in quality of life/cost of living category (No. 6).

There are no solution providers from South Dakota on the Next-Gen 250, Tech Elite 250, or Fast Growth 100 and 50 Up-And-Comers lists.

No. 44: Maine

Solution Provider 500 Companies: 1

Maine scores poorly in the overall rank for taxes and regulation (No. 46), with its regulatory environment (No. 46) and property tax rank (No. 40). The track record for innovation and growth isn't much better (No. 43), while the rankings for cost of living (No. 39) and individual income tax (No. 43) aren't great either.

The state does score respectably for its business opportunities (No. 28), boosted by its high score for economic expansion and development, as well as access to capital. And the state is No. 23 in offering an educated, experienced workforce. But, the state's labor/business costs associated with that workforce rank No. 35.

Maine has one solution provider each on the Tech Elite 250 and Next-Gen 250 list, but no companies on the Fast Growth 100 and 50 Up-And-Comers list.

No. 43: Kentucky

Solution Provider 500 Companies: 4

Kentucky's overall ranking was dragged down by its poor ranking (No. 48) for availability of an educated, experienced workforce. It was among the states with the lowest percentage of the population with college degrees.

The state was ranked No. 12 in the taxes and regulations category, including having some of the lowest property taxes among all states. But, its No. 29 rank in labor/business costs isn't terribly impressive, even less so are the overall rankings for innovation and growth (No. 42) and business opportunity (No. 39).

Kentucky has two solution providers on the Tech Elite 250 list, three on the Next-Gen 250 and three on the Fast Growth 100 and 50 Up-And-Comers.

No. 42: Rhode Island

Solution Provider 500 Companies: 4

High labor/business costs (No. 48) and unfavorable taxes and regulations (No. 48) took their toll on Rhode Island's overall ranking. In our analysis, the state had the worst score among all states in regulatory environment criteria and in the cost of unemployment insurance taxes. And, the state's high cost of living and sales taxes bring down its quality of life/personal cost of living ranking to an undesirable No. 44.

While Rhode Island's ranking for innovation and growth (No. 41) is also poor, its No. 17 rank in business opportunity (helped by a high score for economic diversity) is a factor in the state's favor. The state also scores fairly high for its educated, experienced workforce (No. 15).

Rhode Island has one solution provider each on the Tech Elite 250, Next-Gen 250, and Fast Growth 100 and 50 Up-And-Comers lists.

No. 41: Montana

Solution Provider 500 Companies: 0

Montana is ranked No. 47 in business opportunity, due to some of the lowest scores among all states for such areas as economic diversity, high-wage traded services (the share of a state's employment in traded services sectors in which the average wage is above the national median) and deployment of residential broadband communications. But with just more than 1 million residents spread across 147,046 square miles, that should come as no surprise.

Montana's rankings for the experience and education of its workforce (No. 36) and innovation and growth prospects (No. 35) aren't especially attractive. And its No. 27 rank for overall taxes and regulatory environment only puts it in the middle of the pack. The No. 14 ranking for labor/business costs is a plus.

Montana has no solution providers on the Tech Elite 250, Next-Gen 250, and Fast Growth 100 and 50 Up-And-Comers list.

No. 40: New Mexico

Solution Provider 500 Companies: 1

New Mexico is ranked No. 12 in overall labor/business costs and scores in the middle of the pack (No. 29) for the overall experience and education levels of its workforce.

But, the state scores poorly in taxes and regulations (No. 44): New Mexico charges a 5 percent sales tax on computer services, just one of four states that do so. It also doesn't do well in overall business opportunities (No. 45), largely due to low scores for economic diversity and broadband communications availability.

New Mexico is ranked No. 46 on quality of life/personal cost of living criteria, dragged down by its high crime rank (No. 46).

New Mexico has no solution providers on the Tech Elite 250, Next-Gen 250, and Fast Growth 100 and 50 Up-And-Comers list.

No. 39: Louisiana

Solution Provider 500 Companies: 2

Louisiana has the next-to-lowest labor/business costs, second only to Oklahoma. But, you could say it's a case of "you get what you pay for," given that it's ranked No. 49 in the overall experience and education of its workforce, with only West Virginia scoring lower in that category.

The state does enjoy a No. 10 ranking for its low overall taxes and business-friendly regulatory environment. The flip side is that it only ranks No. 41 in business opportunities. And, a high crime rate reduces its overall quality of life/personal cost of living ranking to No. 42.

Louisiana has three solution providers each on the Tech Elite 250 and Next-Gen 250 lists, and one on the Fast Growth 100 and 50 Up-And-Comers list.

No. 38: South Carolina

Solution Provider 500 Companies: 2

South Carolina's strength is its business-friendly environment: The state ranks No. 5 in overall taxes and regulations.

The state is ranked No. 25 in labor and business costs. But, the advantage provided by those very competitive labor costs is offset by its high unemployment insurance expenses. And, the state ranks No. 43 in the education and experience levels of its workforce.

South Carolina also suffers from a low quality of life/personal cost of living score that ranks it No. 49, ahead of only Arkansas among all 50 states. That's due to a relatively high personal income tax and a high crime rate.

South Carolina has three solution providers on the Next-Gen 250 list, two on the Tech Elite 250, and one on the Fast Growth 100 and 50 Up-And-Comers list.

No. 37: Alaska

Solution Provider 500 Companies: 1

The largest state in the U.S., geographically speaking, is also among the more expensive in which to do business. The state's overall labor and business costs (No. 40) are high, albeit lower than Hawaii and states in the Northeast like New York and Massachusetts.

The unfavorable taxes and regulation ranking (No. 41) is due to high property taxes and extensive regulations.

But, Alaska is attractive from a quality of life/personal cost of living perspective (No. 7). Despite a high cost of living, the state has no individual income tax or state sales tax, and almost its entire population is online.

Alaska has no solution providers on the Next-Gen 250, Tech Elite 250, or Fast Growth 100 and 50 Up-And-Comers.

No. 36: Oklahoma

Solution Provider 500 Companies: 3

If you're looking for the state with the lowest costs, Oklahoma is it. Its low labor and business costs, combined with the state's low unemployment insurance expenses and relatively low energy prices, gives Oklahoma the No. 1 rank in overall labor and employment costs. The state's No. 3 rank in overall taxes and regulation also adds to its allure.

But, there are downsides: The state ranks No. 44 in the experience and education of its workforce, No. 44 in overall innovation and growth, and No. 44 in overall business opportunity.

Oklahoma has one solution provider on the Next-Gen 250 list, one on the Tech Elite 250, and three on the Fast Growth 100 and 50 Up-And-Comers.

No. 35: Iowa

Solution Provider 500 Companies: 3

Iowa offers relatively low labor/business costs (ranked No. 13 overall) for existing and prospective businesses. And, that rank would be even better if not for the state's relatively high unemployment insurance tax.

Iowa's rankings are otherwise lackluster. It's at the midpoint (No. 26) for overall taxes and regulations. But, its other rankings are generally in the 30s, including the experience and education levels of its workforce (No. 35) and ranking for innovation and growth (No. 38).

Iowa has three solution providers on the Tech Elite 250 list and two on the Fast Growth 100 and 50 Up-And-Comers, but none among the Next-Gen 250.

No. 34: Alabama

Solution Provider 500 Companies: 4

Alabama is ranked No. 2 in overall taxes and regulations, including boasting the lowest property tax rates of all the states, a moderate corporate income tax rate (6.5 percent) and one of the most benign regulatory environments.

On the flip side, Alabama is ranked No. 42 for the relatively low experience and education levels of its workforce, No. 40 for innovation and growth, and No. 35 for overall business opportunity.

Alabama has three solution providers on the Tech Elite 250 list, two on the Fast Growth 100 and 50 Up-And-Comers, and one on the Next-Gen 250 list.

No. 33: Tennessee

Solution Provider 500 Companies: 5

Like its neighbor Alabama, Tennessee's strongest point as a place to start and run a business is its low taxes and favorable regulatory environment (ranked No. 7). Both its property taxes and 6.50 percent corporate tax rate are at the low end of the spectrum among all states.

Tennessee doesn't have much else to brag about, however. It ranks No. 26 in overall labor/business costs and No. 33 in the experience and education of its workforce. It ranks No. 28 in innovation and growth and No. 38 in business opportunity. Most unimpressive is the state's low ranking (No. 47) for quality of life/personal cost of living due to its 7 percent sales tax, high crime rate, and low percentage of the population that uses the Internet.

Tennessee has five solution providers on the Next-Gen 250 list, four on the Fast Growth 100 and 50 Up-And-Comers, and one on the Tech Elite 250.

No. 32: Vermont

Solution Provider 500 Companies: 0

Vermont ranks No. 6 in the overall experience and education of its workforce. It's among the top five states in educated workers with 35.4 percent of the adult population holding a bachelor's degree or higher. And, it's ranked No. 1 in "migration of U.S. knowledge workers," a measure of the average educational attainment of recent migrants from within the U.S.

The downside is it can be an expensive place to do business. The state is ranked No. 34 for overall labor/business costs and No. 49 for overall taxes (including property taxes that are among the country's highest) and regulations. Taxes also take a toll on Vermont's No. 35 ranking in quality of life and personal cost of living. Its high personal income tax (9 percent) and sales tax (6 percent) are among the country's highest.

Vermont has no Next-Gen 250, Fast Growth 100 and 50 Up-And-Comers, or Tech Elite 250 solution providers.

No. 31: Indiana

Solution Provider 500 Companies: 4

Indiana's No. 13 rank in overall taxes and regulations works in its favor as a place to start and operate a business. Corporate and property taxes are roughly in the median among all 50 states, but the state is ranked No. 4 for its business-friendly regulatory environment.

Finding experienced, educated workers can be a challenge in Indiana with its No. 41 ranking. That's balanced, somewhat, by the relatively low labor/business costs (No. 20).

Indiana has six solution providers on the Tech Elite 250 list, two on the Fast Growth 100 and 50 Up-And-Comers, and six on the Next-Gen 250 list.

No. 30: Nebraska

Solution Provider 500 Companies: 3

Nebraska has among the lowest labor costs in the U.S., ranking No. 3 overall. And while the state's regulatory environment is relatively favorable (No. 8), its 7.81 percent corporate income tax drops the state down to No. 23 on the overall taxes and regulations front.

Beyond that, Nebraska scores relatively low in the experience and education of its workforce (No. 37), overall innovation and growth (No. 39) and business opportunity (No. 30). And its 6.8 percent individual income tax pulls down its score for quality of life/personal cost of living to No. 23.

Nebraska has one solution provider on the Tech Elite 250 list, one on the Fast Growth 100 and 50 Up-And-Comers, and three on the Next-Gen 250 list.

No. 29: Nevada

Solution Provider 500 Companies: 0

Nevada ranks near the bottom of all states (No. 46) in the education and experience level of its workforce. Only 22.5 percent of adults have a bachelor's degree or higher. And, it's ranked No. 47 for employment in IT jobs (as a share of private sector employment). Yet, its labor and business costs, ranked No. 37, are higher than what would be expected for such an unskilled labor pool.

On the upside the state is No. 9 for its business opportunities and ranked a competitive No. 21 for overall taxes and regulations. It's only one of three states that has no corporate income tax (Wyoming and South Dakota are the other two), and it has no personal income tax -- one of the factors in its No. 19 rank in quality of life/personal cost of living.

Nevada has three solution providers on the Next-Gen 250 list, one on the Fast Growth 100 and 50 Up-And-Comers, but none on the Tech Elite 250.

No. 28: North Dakota

Solution Provider 500 Companies: 1

North Dakota is blessed with low labor and overall business costs (No. 5). Part of that is because of its No. 2 ranking in energy costs, a benefit of the oil production boom the state is currently experiencing.

Thanks to that oil boom, North Dakota boasts the fastest-growing economy of any state (13.2 percent in 2012) and the lowest unemployment rate (3.3 percent in March). But that doesn't appear to translate into opportunities for solution providers as the state is ranked No. 43 in overall business opportunity. Part of that is undoubtedly due to the relatively few number of businesses in the state.

North Dakota has one solution provider on the Tech Elite 250 list, but none on the Next-Gen 250 or Fast Growth 100 and 50 Up-And-Comers.

No. 27: Wisconsin

Solution Provider 500 Companies: 7

Wisconsin ranks fairly high (No. 16) in the education and experience levels of its workforce. But, the state otherwise ranks below the median of the 50 states in most other areas, including labor/business costs (No. 30), taxes and regulations (No. 36), and innovation and growth potential (No. 32).

The state's business opportunity rank, at No. 22, and quality of life/personal cost of living rank, at No. 15, are moderately favorable.

Wisconsin has four solution providers on the Tech Elite 250 list, one on the Next-Gen 250 and three on the Fast Growth 100 and 50 Up-And-Comers.

No. 26: Kansas

Solution Provider 500 Companies: 8

Kansas is geographically located smack in the middle of the U.S. Our analysis, interestingly enough, ranks Kansas in the middle of all states as the best place to start and operate a solution provider business.

Kansas gets respectable marks for its labor and business costs (ranked No. 18), and its rankings for the education and experience level of its workforce (No. 21) and for taxes and regulation (No. 22) are also quite good. Only the state's lower scores, as a place for innovation and growth (No. 34) and business opportunity (No. 27), bring Kansas back down to average.

Kansas has two solution providers on the Tech Elite 250 list, one on the Next-Gen 250, and two on the Fast Growth 100 and 50 Up-And-Comers.

No. 25: New Hampshire

Solution Provider 500 Companies: 6

New Hampshire is commonly thought of as the anti-tax, pro-business alternative to its liberal neighbors. But, according to our analysis, the state ranked No. 47 in overall taxes and regulations. The poor showing is due to it having one of the highest property tax rates and an 8.50 percent corporate income tax rate. New Hampshire actually scores poorly for its regulatory environment. On the plus side, its lack of a personal income tax helps it reach No. 2 for overall personal cost of living. New Hampshire is No. 13 for the high education and experience level of its workforce. There's a thriving tech industry in the southern part of the state that attracts engineering graduates and entrepreneurs from Boston-area universities, plus its own state schools and Dartmouth College.

New Hampshire has two solution providers on the Tech Elite 250 list, four on the Next-Gen 250, and two on the Fast Growth 100 and 50 Up-And-Comers.

No. 24: Idaho

Solution Provider 500 Companies: 1

Idaho offers a relatively low-cost environment for entrepreneurs looking for a place to launch a solution provider business. The state is ranked No. 16 for its overall labor/business costs; it would be even higher if not for an expensive unemployment insurance tax. And, its low overall taxes and limited regulations earn it the No. 14 rank in that column.

But, the education and experience levels of its workers merits no better than No. 34. And, its business opportunity rank (No. 37) is nothing to shout about. For overall innovation and growth prospects, it is ranked No. 20, and for quality of life/personal cost of living, it's ranked No. 21.

Idaho has two solution providers on the Tech Elite 250 list, but none on the Next-Gen 250 or Fast Growth 100 and 50 Up-And-Comers lists.

No. 23: Pennsylvania

Solution Provider 500 Companies: 14

Pennsylvania's attractiveness takes a hit from its high labor costs (No. 43). The state otherwise falls in the middle of the pack on many metrics including workforce education and experience (No. 26), taxes and regulations (No. 28), and innovation and growth prospects (No. 22).

The state does score well for business opportunity (No. 13) thanks to the sheer number of businesses in the populous state, the large number of fast-growing companies, and the state's economic diversity. Pennsylvania also scores high (No. 9) in quality of life/personal cost of living, thanks to the lowest personal income tax (3.1 percent) among the states that have such a tax.

Pennsylvania has six solution providers on the Tech Elite 250 list, five on the Fast Growth 100 and 50 Up-And-Comers, and an impressive 15 on the Next-Gen 250.

No. 22: Ohio

Solution Provider 500 Companies: 11

Ohio not only borders Pennsylvania geographically, but the two are ranked side-by-side in our analysis as well. Ohio does offer a much lower labor/business cost (No. 21) and lower taxes and regulation (No. 16) than its neighbor. But, those advantages are balanced out by Ohio's No. 25 ranking for quality of life/personal cost of living and mediocre ranking for business opportunity (No. 23); while more economically diverse than Pennsylvania, Ohio has fewer fast-growing companies.

Ohio's ranks for worker education and experience (No. 28) and innovation and growth (No. 21) are almost identical to Pennsylvania.

Ohio has seven solution providers on the Tech Elite 250 list, four on the Fast Growth 100 and 50 Up-And-Comers, and six on the Next-Gen 250.

No. 21: Connecticut

Solution Provider 500 Companies: 6

Like many other states in the Northeast, Connecticut can be an expensive place to start and run a business. The state is No. 45 in overall labor and business costs and No. 42 in taxes and regulations. The state's electricity rate of 14.89 cents per kilowatt-hour is second only to Hawaii.

But, the state is ranked No. 8 for overall workforce education and experience: 36.2 percent of its adult population have a bachelor's degree or higher, fourth among the states. It's ranked No. 17 for innovation and growth. And, the state can thank its impressive business opportunity rank (No. 7) for its impressive score in "high-wage traded services" -- the share of a state's employment in traded services sectors in which the average wage is above the national median.

Connecticut has four solution providers on the Tech Elite 250 list, three on the Fast Growth 100 and 50 Up-And-Comers, and six on the Next-Gen 250.

No. 20: Missouri

Solution Provider 500 Companies: 8

Missouri has a lot going for it. It has some of the lowest labor/business costs in the country (No. 4) and one of the best rankings (No. 6) in overall taxes and regulations. Despite the low-cost business climate, the state also has a workforce that's ranked No. 18 in its education and experience levels.

But, Missouri doesn't score well in innovation and growth (No. 29): Despite a respectable level of entrepreneurial activity rank, the state has low scores for innovator patents, innovation capacity and the number of high-tech jobs in non-IT industries. And, its No. 36 business opportunity rank is relatively low due to a lower number of fast-growing companies and other factors.

Missouri has five solution providers on the Tech Elite 250 list, two on the Fast Growth 100 and 50 Up-And-Comers, and three on the Next-Gen 250.

No. 19: Illinois

Solution Provider 500 Companies: 27

Illinois is a relatively expensive place to do business. The state is ranked No. 39 in labor and business costs. It holds the same rank in overall taxes and regulations: The state's 9.5 percent corporate income tax is one of the highest in the country.

The state ranks No. 11 in the education and experience levels of its labor pool. And, its overall business opportunity rank is No. 14, not surprising for the state with the fifth largest population and a mega-city like Chicago at its core.

But, Illinois' rank for innovation and growth (No. 19) is driven down by a poor score for entrepreneurial activity, a characteristic it shares with other Great Lakes industrial states like Michigan, Pennsylvania, Indiana and Wisconsin.

Illinois has nine solution providers on the Tech Elite 250 list, 13 on the Fast Growth 100 and 50 Up-And-Comers, and 11 on the Next-Gen 250.

No. 18: Delaware

Solution Provider 500 Companies: 0

It's surprising that not one SP500 is based in Delaware given that it's ranked No. 1 for overall business opportunity. Delaware scores ahead of all states in high-wage traded services and the availability of broadband communications services for consumers. It also ranks No. 6 for the number of fast-growing firms. The state is ranked No. 19 in both labor/business costs and the education/experience of its workforce -- a balance that few states even come close to.

Delaware's taxes and regulatory environment is rated No. 35 -- its 8.70 percent corporate income tax is in the top 10 among all states. And while Delaware doesn't have a sales tax, the state still ranks a disappointing No. 41 for quality of life/personal cost of living due to a high crime rate and its relatively high cost of living.

Delaware has no solution providers on the Tech Elite 250, Fast Growth 100 and 50 Up-And-Comers, or Next-Gen 250 lists.

No. 17: Michigan

Solution Provider 500 Companies: 15

Despite having a middling workforce education and experience ranking (No. 27), Michigan has high labor/business costs (No. 44). Some of that is due to the state's high energy costs and an unemployment insurance tax that's more costly than in most states.

Michigan, nevertheless, has some things going for it. It ranks respectably for overall taxes and regulations (No. 20) and business opportunity (No. 18). Even better is the state's ranking for innovation and growth -- Michigan does well in such criteria as technological innovation and the percentage of the state's private-sector workforce made up of scientists and engineers.

Michigan's quality of life/personal cost of living is ranked No. 12.

Michigan has seven solution providers on the Tech Elite 250, two on the Fast Growth 100 and 50 Up-And-Comers, and six on the Next-Gen 250 list.

No. 16: Florida

Solution Provider 500 Companies: 10

Florida is the fourth most populous state in the country and in 2012 reported gross state product growth of 2.4 percent to $777.2 billion -- also fourth largest in the country. So, it's not surprising our analysis would rank the state No. 11 in business opportunity and No. 12 in growth and innovation.

Florida offers relatively low taxes (No. 18) and its cost of labor is No. 27. But, the education and experience level of its workforce merits only a rank of No. 39.

And, the state's median age of 41.1 is exceeded by only four other states.

Florida has eight solution providers on the Tech Elite 250, four on the Fast Growth 100 and 50 Up-And-Comers, and nine on the Next-Gen 250 list.

No. 15: New Jersey

Solution Provider 500 Companies: 29

New Jersey offers a workforce that's ranked No. 7 in its education and experience levels: 35.3 percent of the adult population have a bachelor's degree or higher. The state is also ranked No. 7 for the percentage of scientists and engineers in its workforce. Given all that, it's not surprising New Jersey ranked No. 8 for overall innovation and growth.

That expertise, however, comes with a cost. Its high overall labor and business costs put the state at No. 41 in that criteria. And, its ranking (No. 45) for taxes and regulations (including high corporate income and property taxes) is even worse. Even the personal cost of living is mediocre (No. 24) due to some of the highest personal income and sales taxes in the country.

New Jersey has eight solution providers on the Tech Elite 250, six on the Fast Growth 100 and 50 Up-And-Comers, and five on the Next-Gen 250 list.

No. 14: Minnesota

Solution Provider 500 Companies: 15

Like New Jersey and many other states, Minnesota offers entrepreneurs an educated, experienced workforce (ranked No. 9) -- but at the price of high labor costs and high taxes. The state is ranked No. 33 for overall labor expenses and cost of doing business and No. 38 for taxes and regulations.

Minnesota ranks a respectable No. 14 in innovation and growth and No. 12 in business opportunity. The latter includes a No. 4 ranking in high-wage traded services (the share of a state's employment in traded services sectors in which the average wage is above the national median).

Minnesota has eight solution providers on the Tech Elite 250, three on the Fast Growth 100 and 50 Up-And-Comers, and eight on the Next-Gen 250 list.

No. 13: New York

Solution Provider 500 Companies: 45

New York is ranked No. 8 for overall business opportunities -- not a big surprise for the third most populous state. The state is No. 11 for overall innovation and growth. And, there's an adequate pool of educated and experienced workers, according to its No. 10 rank. But, New York is second only to Massachusetts as an expensive place to do business: It's ranked No. 49 for overall labor and business costs. And, it's ranked No. 34 for overall taxes and regulatory environment. Somewhat surprising is New York's No. 13 rank for quality of life and personal cost of living, given the 8.8 percent individual income tax and No. 47 ranking for cost of living. But, it scores points for a comparatively low sales tax (4.0 percent), a relatively high median household income ($55,246), and a low crime rate (No. 4).

New York has 18 solution providers on the Tech Elite 250, seven on the Fast Growth 100 and 50 Up-And-Comers, and 13 on the Next-Gen 250 list.

No. 12: North Carolina

Solution Provider 500 Companies: 5

North Carolina appears to be an up-and-coming place to do business. The state has moderate labor and business expenses (No. 15) and low overall taxes and regulations (No. 9). And, it is ranked No. 18 for innovation and growth and No. 15 for its business opportunities. North Carolina is No. 20 for the education and experience level of its workforce -- likely fueled by the number of graduates pumped out by schools in the Research Triangle region.

Where North Carolina falls down is its disappointing No. 38 ranking for quality of life/personal cost of living. That's due to the state's relatively high 7.8 percent personal income tax (rank No. 40), low median household income of $43,916 (No. 39 among all states), and low percentage of the population that's online (No. 40).

North Carolina has five solution providers on the Tech Elite 250, three on the Fast Growth 100 and 50 Up-And-Comers, and 11 on the Next-Gen 250 list.

No. 11: Texas

Solution Provider 500 Companies: 24

Thesecond most populated state gets a boost from its high score for overall innovation and growth (No. 4). That includes a No. 1 ranking for the value of exports per manufacturing and service worker, a No. 7 in entrepreneurial activity, and a No. 2 in gross state product, and technology and innovation. Texas' efforts to define itself as a hotbed of IT, however, take a hit from its No. 31 ranking for the education and experience level of its workforce. It is ranked No. 17 for IT jobs (employment in IT occupations in non-IT industries as a share of private-sector employment). And it ranks No. 22 in overall labor and business costs and a surprising No. 31 in overall taxes and regulations. The lack of a personal income tax, however, boosts its personal cost-of-living to No. 8.

Texas has 13 solution providers on the Tech Elite 250, eight on the Fast Growth 100 and 50 Up-And-Comers, and 22 on the Next-Gen 250 list.

No. 10: Oregon

Solution Provider 500 Companies: 2

Oregon's high ranking for innovation and growth (No. 7) gets a boost from its good scores for gross state product growth (ranked No. 3) and inventor patents (also No. 3). The state ranks No. 16 for overall business opportunity, including a No. 3 ranking for manufacturing value added (defined as the manufacturing value added per production hour worked as a percentage of the national average).

While Oregon ranks No. 14 in the education and experience level of its workforce, its overall labor/business costs are ranked a moderately high No. 31, and the state's rank for taxes and regulations is even less favorable (No. 33).

Oregon's quality of life/personal cost of living rank (No. 27) is helped by the fact it's one of the few states that has no sales tax.

Oregon has one solution provider on the Tech Elite 250, none on the Fast Growth 100 and 50 Up-And-Comers, and two on the Next-Gen 250 list.

No. 9: Massachusetts

Solution Provider 500 Companies: 15

You won't find another state with such contrasting rankings. The state is ranked a not-surprising No. 1 for the experience and education of its workforce. It's No. 1 in the percentage of adults with a bachelor's degree or higher (39.1 percent). And the region's thriving tech sector is arguably second only to California's Silicon Valley. The state is also ranked No. 2 for overall innovation and growth (second to California) and No. 5 for business opportunities.

Now the bad news. Massachusetts is No. 50 -- dead last -- in both labor/business costs, as well as in overall taxes and regulations. Its 8.0 percent corporate income tax is ranked No. 33. It's No. 43 in property taxes. And then there's the issue of this new 6.25 percent sales tax on software services that's reviving the old "Taxachusetts" label.

Massachusetts has seven solution providers on the Tech Elite 250, four on the Fast Growth 100 and 50 Up-And-Comers, and four on the Next-Gen 250 list.

No. 8: Georgia

Solution Provider 500 Companies: 18

Georgia ranks an impressive No. 4 for overall business opportunity and a respectable No. 16 for innovation and growth -- which gets a boost from the state's No. 4 rank for entrepreneurial activity.

On the expense side, Georgia does well in taxes and regulation (No. 4). But, it's ranked only No. 28 for its labor and business costs. And, its workforce education and experience ranks only a middle-of-the-pack No. 24.

Georgia has eight solution providers on the Tech Elite 250, six on the Fast Growth 100 and 50 Up-And-Comers, and 10 on the Next-Gen 250 list.

No. 7: California

Solution Provider 500 Companies: 49

You would expect California to be on top of the tech rankings. And in some ways, you'd be right. California, for example, is ranked No. 1 for its overall innovation and growth opportunities, thanks to high scores in such criteria as entrepreneurial activity (No. 1) and inventor patents (No. 2).

Also not so surprising is the fact that California is an expensive place to do business. It's ranked No. 38 for overall labor and business costs and No. 40 for taxes and regulation.

But, the education/experience level of its workforce is ranked only No. 12. And, it's ranking for overall business opportunity is a disappointing No. 21. All of which reminds us that Silicon Valley isn't all there is to California.

California has 37 solution providers on the Tech Elite 250, 15 on the Fast Growth 100 and 50 Up-And-Comers, and 23 on the Next-Gen 250 list.

No. 6: Arizona

Solution Provider 500 Companies: 9

Arizona offers potential for entrepreneurs looking for a place to start a business. The state is ranked No. 3 in business opportunity and No. 10 for its innovation and growth.

Arizona is also attractive for its impressive No. 11 ranking for its relatively low labor and business costs as well as its respectable No. 17 rank for taxes and regulation. (The state is ranked No. 1 for the lowest unemployment insurance tax.) The education and experience level of its workforce, however, is only ranked a so-so No. 22.

The state's overall ranking would be even higher but for its somewhat disappointing No. 34 rank for quality of life/personal cost of living. Blame the 6.6 percent sales tax and a No. 41 ranking for crime.

Arizona has four solution providers on the Tech Elite 250, two on the Fast Growth 100 and 50 Up-And-Comers, and four on the Next-Gen 250 list.

No. 5: Maryland

Solution Provider 500 Companies: 23

Maryland is in the top five states despite being ranked No. 47 for its high labor and business costs, behind only Massachusetts, Rhode Island and New York. But then you're paying for a workforce that's ranked No. 2 for its level of education and experience. (It's second only to Massachusetts in the percentage of the adult population with a bachelor's degree or higher, and second only to Virginia for its information technology jobs rank.) Maryland also impresses with its scores for overall innovation and growth (No. 5) and overall business opportunity (No. 10). Its No. 29 rank for taxes and regulation is a bit unattractive -- but it's very competitive against states like Massachusetts and California. Interesting fact: Maryland has the highest median household income at $70,004

Maryland has five solution providers on the Tech Elite 250, two on the Fast Growth 100 and 50 Up-And-Comers, and six on the Next-Gen 250 list.

No. 4: Washington

Solution Provider 500 Companies: 6

As home to such tech giants as Microsoft and Amazon, you'd expect Washington to have a lot to offer solution provider businesses. And, it does both in terms of its educated, experienced workforce (No. 5) and rank for overall innovation and growth (No. 3). And the state is ranked No. 1 for the share of the private sector employed as scientists or engineers, as well as No. 4 for the number of information technology jobs as a share of private sector employment. The overall business opportunity rank, however, is no higher than No. 25: There are large areas of the state beyond the Seattle area that are very rural, after all. The labor and business costs are ranked No. 24, while overall taxes and regulations rank a relatively unfavorable No. 32. Washington's overall rank gets a boost from its lack of a personal income tax.

Washington has six solution providers on the Tech Elite 250, two on the Fast Growth 100 and 50 Up-And-Comers, and four on the Next-Gen 250 list.

No. 3: Colorado

Solution Provider 500 Companies: 15

Colorado has quite a bit going for it, coming out No. 3 overall thanks to its highly educated, experienced workforce (36.7 percent of its adult population has a bachelor degree or higher) and its high scores for innovation and growth (the state is ranked No. 3 for entrepreneurial activity).

The state is far from the cheapest place to do business, however. Colorado is rated No. 36 for overall labor/business costs. Its ranking for overall taxes and regulation is a middle-of-the-road No. 24. And, the state ranks No. 19 for overall business opportunity.

Colorado has excellent scores for overall quality of life/low cost of living -- the state's 2.9 percent sales tax is the lowest among all 45 states that levy such a tax.

Colorado has nine solution providers on the Tech Elite 250, two on the Fast Growth 100 and 50 Up-And-Comers, and five on the Next-Gen 250 list.

No. 2: Virginia

Solution Provider 500 Companies: 46

Virginia has a lot going for it. The overall education and workforce experience level is ranked No. 3, behind Massachusetts and Maryland. The 35.1 percent of the adults with a bachelor's degree or higher ranks it No. 7. And, it's ranked No. 1 for the number of IT jobs as a share of private-sector employment, an indicator many Virginia companies have significant IT operations. The state is ranked No. 6 for business opportunities, not so surprising given the exploding economy in the region. And, it's ranked No. 15 for overall innovation and growth and No. 1 for the number of fast-growing companies. Virginia ranks No. 8 in overall taxes and regulations. But, labor and related business expenses are high, putting it at No. 32. Virginia also ranked No. 1 for quality of life/personal cost of living.

Virginia has 15 solution providers on the Tech Elite 250, 22 on the Fast Growth 100 and 50 Up-And-Comers, and 21 on the Next-Gen 250 list.

No. 1: Utah

Solution Provider 500 Companies: 1

Given that there's only one Utah solution provider on the SP500, the state is apparently undiscovered country for the channel. But, our analysis shows that entrepreneurs looking for a place to set up shop should have the state on their radar. Utah is ranked No. 1 for its low taxes (its 5 percent corporate income tax is among the lowest) and moderate regulatory environment. Its labor and related business costs are ranked No. 8.

But, Utah isn't just about low costs. It's ranked No. 2 for business opportunity and No. 9 for innovation and growth -- that includes its surprising No. 1 for awarded patents. And, it's No. 4 for fast-growing companies, behind only Virginia, Massachusetts and Maryland. Interesting fact: 90.1 percent of Utah households are online, highest in the U.S.

Utah has one solution provider on the Tech Elite 250, none on the Fast Growth 100 and 50 Up-And-Comers, and one on the Next-Gen 250 list.