Two recent sets of rankings about Louisiana’s economy and business climate send mixed messages about how attractive the state is to companies that want to invest here. Or do they? Sometimes you have to dig a little deeper to sort it out.
The headlines are certainly different. One says, “Louisiana Ranks #2 in South for Economic Development Efforts.” Another blares “Louisiana Finds Itself in the Bottom 10 of ‘Top States for Business.’” So, what gives?
Well, the first one certainly seems accurate when you look at the criteria. Southern Business & Development magazine ranks southern states based on per capita capital investment and job creation projects. One doesn’t have to look far to see the investment that is occurring in southwest Louisiana and along the Mississippi River between Baton Rouge and New Orleans.
We’re talking billions of dollars, primarily in our energy and manufacturing sectors, and that has made us a leader in industrial investment for years. But that makes sense. Our industrial sector has been here for a long time. Other parts of the country aren’t quite as welcoming to this kind of industry. Our location on the Gulf Coast, straddling the Mississippi River, is a big asset. And Louisiana has an aggressive approach to economic development that’s coupled with a strong assortment of incentives.
Put all of those together, and we should be doing well. So why are we in the bottom of the Top States for Business, the annual rankings compiled by CNBC? It’s because they are looking at something different. They consider a much broader business climate that looks at 10 different factors including our workforce, infrastructure, education, business friendliness, and the overall strength of our economy.
The problem is that of those 10 indicators, we earn no better than a “D” on eight of them. Our only two strong points are the cost of doing business and the cost of living. So, the takeaway here is that we’re not an expensive place to live, but we lack other important amenities that would truly make our state more attractive.
That, of course, begs the question of why we are a leader in the south in terms of economic investment? It’s primarily a function of two things: 1) the bulk of that investment is coming in the petrochemical industry where we have clear advantages compared to other states, and 2) the dollar amount of the investments that industry makes is so huge. Take that out of the equation and then where would we stand?
Of course, you can’t take that out, and that sector should continue to be a source of strength for us for years to come. But we can’t deny the fact that technology is changing economies like never before and we’re faced with the choice of being a part of that change or risk falling farther behind.
So, the question is, are we willing to look at the challenges highlighted by things like the CNBC rankings and take the steps we need to propel us forward? It’s a question worth asking now because this is an election year, and the candidates are going to promise us something, so we might as well ask them about that.
That doesn’t mean things will change overnight, but there are certainly steps we can take now that will have a more immediate impact in improving our workforce, strengthening our tax structure, modernizing our infrastructure, and just generally moving us forward.
These are the types of things we should be talking about this election year. They’re not the only things that are important, but they are things that could change our trajectory and make Louisiana what it ought to be, a welcoming place that provides real opportunities for businesses to come and for people to thrive.