Rhode Island ranked 50th in CNBC’s 2024 "America’s Top States for Business" study, placing it last among the 50 states. The annual analysis evaluates states across 10 categories, including infrastructure, economy, and cost of doing business, with Rhode Island’s low ranking driven primarily by high costs and a sluggish business environment.
Understanding the CNBC Methodology
CNBC evaluates states by scoring them on 128 metrics across 10 broad categories. These categories are weighted based on how frequently states use them as marketing tools to attract businesses. The highest-weighted categories include Workforce, Infrastructure, and Economy.
According to CNBC’s 2024 rankings, Rhode Island’s overall score suffered due to its performance in the "Cost of Doing Business" and "Economy" categories. While the state scored higher in categories like "Education" and "Life, Health & Inclusion," these did not offset the weight of economic indicators that landed the state at the bottom of the list.
Economic Challenges in Rhode Island
The state’s bottom-tier ranking reflects specific structural challenges. High energy costs, taxes, and regulatory environments are primary factors often cited in such assessments. In the 2024 report, Rhode Island struggled to compete with states that offer lower corporate tax burdens and more flexible labor market regulations.
Comparatively, states like Virginia, which secured the top spot in 2024, performed consistently across all 10 categories. Rhode Island’s position at 50th highlights a persistent gap in competitiveness when measured against the specific metrics favored by corporate site selectors and business owners who prioritize operational efficiency and growth potential.
Contextualizing the State Business Climate
It is important to distinguish between this ranking and other economic indicators. While CNBC focuses on business-specific metrics, other organizations often rank states differently based on quality of life or individual tax burdens.
For instance, the Tax Foundation’s State Business Tax Climate Index frequently evaluates states based solely on tax structure. Rhode Island consistently ranks in the bottom half of that index, reflecting a tax system that observers often describe as complex or burdensome for high-growth industries.
Key Takeaways
- Overall Standing: Rhode Island was ranked 50th in the 2024 CNBC America’s Top States for Business study.
- Evaluation Criteria: The study uses 128 metrics across 10 categories, including infrastructure, workforce, and cost of doing business.
- Primary Drivers: High operational costs and economic performance metrics were the primary contributors to the state’s low ranking.
- Comparative Performance: While struggling in business-specific metrics, the state often scores differently in social or education-focused indices.
Looking Ahead
The CNBC ranking serves as a benchmark for state officials evaluating economic development strategies. Future shifts in the state’s position will likely depend on legislative changes regarding tax policy, energy infrastructure investments, and efforts to modernize the regulatory environment to attract private-sector investment.