Arizona's climate for small businesses and entrepreneurs is among the best in the nation, according to a report by the National Policy Research Council.
The private, nonpartisan Washington, D.C.-based think tank compiled the results of a host of academic and business studies weighing each state and the nation's most populous cities to present an overview of the nation.
According to the group's Gold Guide, the climate for entrepreneurs and small business in Arizona ties with Florida as the nation's second-best. Nevada ranked No.1. "When people measure small-business success, Arizona keeps coming up near the top," said Chris Madison, the council's spokesman.
Arizona's position is based on studies that assessed the number of start-up businesses that remained viable over a year's time. The ranking also incorporated results from an assessment of 10-year-old start-ups that employ at least five people in Arizona today, Madison said.
The results of a third study that looked at states' overall entrepreneurial energy was also included in the ranking, Madison said. In that study, conducted by the nonprofit Corporation for Enterprise Development, Arizona was among 10 states to receive an A mark, Madison said.
Madison said that the purpose of the rankings is to help cities and states improve their procedures and services and, in turn, their residents’ quality of life.
While the council analyzed studies and data to produce the rankings, the group isn't backed by political or industry-related organizations and doesn't advocate on any one issue, Madison said.
"We didn't make any specific value judgments ourselves, but we based our rankings on a mathematical weighing of all the studies that were available," Madison said.
That method was developed more than two decades ago by Robert J. Eggert of Sedona, who used the practice as editor of the Blue Chip Economic Indicators newsletter, said Marshall J. Vest, director of economic and business research at the University of Arizona's Eller College of Management.
"All of this is based on the idea that any one single ranking may not contain all the appropriate information. But if you were to take an average of all of them, perhaps you'll come up with something better," Vest said.
The Gold Guide reveals what residents and others find when they arrive in Arizona, Vest said.
"Arizona historically has been known as a new frontier kind of state. It's still the wild, wild West. There's not a lot of regulation. It's fairly easy to start a new business. And it's a very fertile environment for people to come and start businesses," Vest said.
While Arizona's business climate ranked near the top, the Gold Guide placed Arizona 48th in public safety.
That was based on empirical studies of the number of crimes committed per capita across the state, Madison said. The ranking isn't related to the number of police officers in a department or region, the existence of such things as neighborhood watches or whether a city supports community-based policing, Madison said.
And Vest pointed out that with any ranking system, such showings must be taken with a grain of salt.
"They have us ranking 35th for quality of life. They've got Minnesota at number one. And if we rank just 33rd overall, how come we're the fastest-growing state in the nation?" Vest said.