• Originally published July 24, 2010 at midnight, updated July 24, 2010 at midnight

By Ray Perryman

The Lone Star State has just been named the winner of a national reality show - again! Although it was not the kind of prime-time preposterousness seen ad nauseam on television that creates 15-minute cultural icons, it was an event in which 50 aspiring contestants were judged by the success they achieved in 10 different categories, each of which was worth 25 to 450 points.

The groupings ranged from the cost of doing business (worth the most points) to cost of living (worth the least). The other categories by which all U.S. states were judged to determine America's Top States for Business 2010 included workforce, quality of life, economy, transportation and infrastructure, technology and innovation, education, business friendliness, and access to capital.

In the study, sponsored by CNBC, Texas received 1,508 points out of 2,500, the highest total in the four-year history of the ranking and some 31 points ahead of last year's winner, Virginia. The other states among the top five were Colorado with 1,456 points; North Carolina, 1,381 points; and Massachusetts, 1,375 points. Alaska's 652 points earned the "land of the midnight sun" state the bottom rung. It is obvious that Texas won't be voted off the island any time soon.

The 2010 analysis was the fourth annual review of America's Top States for Business in which each was measured on 40 different metrics in the 10 key categories of competitiveness . The points are awarded on how frequently the states use these categories as selling points to attract business.

Texas took first place in 2008, but was runner up last year. In addition to the overall title, Texas was number one in both the economy (for the fourth time) and transportation and infrastructure (which the state also won in 2009). Those were two of the three groupings in which Texas was in the top five this year. The other was technology and innovation, where the Lone Star State placed fourth.

Percentage-wise, Texas scored its best in the technology and innovation area, claiming 88.4 percent of the available points. Of the three states that had higher percentages, their rankings overall were fifth, 24th, and 32nd.

The Lone Star State also achieved 88.0 percent of the obtainable points in two other groups - the access to capital and cost-of-living areas. Quality of life and education drew only 47.1 percent and 47.4 percent, respectively, of the number of accessible points. In those groupings, Texas ranked 29th and 30th among the 50 states. Texas was also 30th in the cost of doing business category, garnering just 220 out of a possible 450 points.

Since each category was weighted differently, it was the total points rather than the placement in any area that made the difference.

In the economy category, in which Texas received 270 out of 314 available points, states were analyzed on the health and growth of the key economic indicators, the diversity of businesses, and the number of major corporations located there. New York and North Dakota, respectively, ranked second and third in this category and 24th and 12th overall, receiving 238 and 202 points, in that order. No other state received 200 or more points. If America has an "idol" in economic prosperity, there is no doubt who it is.

In the transportation and infrastructure grouping, several factors were considered in ranking the states. Among them were the vitality of the transportation system measured by the value of goods shipped by air, land, and water. The quality of the roads and the availability of air travel also were evaluated. Texas was awarded 184 points in this area, while Georgia and Ohio, which tied for second, though 10th and 34th, respectively overall, trailed by 20 points.

By amassing more points that any other state for 2010, as well as the highest score in the history of the study, Texas' strengths were appropriately recognized. Although energy, the state's largest industrial sector, is a highly essential contributor to the vitality of the state's economy, the importance of the ongoing diversity of business operations is undeniable. In 2008, the first time Texas was the top state, oil was selling at a record $145 a barrel. This year, prices have averaged around half that amount.

Texans can be justifiably proud of the achievements our state is making in so many areas, but the low rankings the CNBC gave us in education, cost of doing business, and quality of life demonstrate that there is clearly room for improvement. Nonetheless, this designation is one of many where Texas has ranked at or very near the top, thus fueling a justified perception of the Lone Star State as an excellent venue for business growth and individual opportunity. Yes, indeed, we know we can dance!

Dr. M. Ray Perryman is President and Chief Executive Officer of The Perryman Group (www.perrymangroup.com). He also serves as Institute Distinguished Professor of Economic Theory and Method at the International Institute for Advanced Studies.

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