Study: Pa. ranks low as place to start a business
Pennsylvania ranks as the nation's sixth-worst state to start a business, according to the personal finance website WalletHub.
The website compared states in 20 areas related to business costs, access to resources and the overall business environment.
Pennsylvania finished with an overall score of 39.74, ranking ahead of only Hawaii, Rhode Island, Maryland, New Hampshire and New Jersey, WalletHub said. North Dakota rated as the best state to start a business with a score of 69.38, followed by Texas, Utah, Oklahoma and Nebraska, according to the website.
Pennsylvania ranked lowest in the number of startup firms per 100,000 residents (42nd), the five-year business survival rate (44th), corporate taxes (44th) and entrepreneurs per capita (49th). It ranked 10th-best for the average rank of its universities and college students enrolled per capita, as well as for local and state government spending on incentives such as grants, tax abatements and low-cost loans as a share of the state's Gross Domestic Product.
Pennsylvania Department of Community and Economic Development spokesman David M. Smith said the study "uses outdated methodology," noting one report that WalletHub relied upon was produced in 2015 — before Pennsylvania's capital stock and franchise tax was eliminated.
The study also applied a double weight on labor costs, which Smith said "puts states with a more educated, skilled, high-tech workforce at a distinct disadvantage." He felt the study didn't place enough weight on the state's relatively low cost of living, which can play a big role in attracting new businesses.
"Pennsylvania continues to work to create an environment that strongly supports startup companies in all sectors of our diverse economy," Smith said.
"Pennsylvania's world-class universities, relatively low cost of land, a skilled workforce and a multimodal transportation system with direct access to major markets in the United States and beyond combine to position the commonwealth for business growth."
Tom Fontaine is a Tribune-Review staff writer. Reach him at 412-320-7847, email@example.com or via Twitter at @FontainePGH.