Different business segments see good things about Arizona, but more needs to be done to move the state into the top tier of economic development efforts.

Not too long ago we at Commercial Real Estate Group of Tucson noticed a lot of social media buzz about CNNMoney’s story on the 10 most entrepreneurial states. Arizona came in at no. 1.

The online story used the 2012 Kauffman Index of Entrepreneurial Activity as its source. That report determined the number of non-business-owner adults who worked on a new venture for at least 15 hours in the month it was started.

Arizona came in at 520 of every 100,000 adults who started a business last year.

CNNMoney said Arizona benefited from entrepreneurs fleeing places like California for the state’s lower business and property taxes and workers’ compensation costs.

It also touted our highly educated labor pool in science and technology and state grants for in-house job training.

These are all great attributes to point out not only to entrepreneurs, but to companies who want to relocate or expand in our state.

But we found a bigger picture emerge in two other studies we’ve recently digested.

Small Business Friendliness

The same Kauffman Foundation that issued the entrepreneurial study worked on a survey with Thumbtack.com. That effort ranked states on how friendly they were to small business. Answering the survey were small business owners who list their services with Thumbtack.com.

The United States Small Business Friendliness report showed Arizona received a “C” grade for overall friendliness to small business, ranking 27th among all the states. It was ranked as the 22nd easiest state for starting a small business.

Its highest grades came in government-offered networking programs (B+) and business-friendly regulations on employment, labor and hiring (B).

Its lowest grade came in the area of publicizing training programs (D). The report said Arizona ranked among the bottom 10 states for having well-publicized training programs.

A couple of asides we found interesting:

• “Male-owned businesses…felt significantly more support by the state than their female counterparts,” according to the survey.
• Tucson got an “F” for overall friendliness; in ease of starting a business; tax code and tax regulations; licensing forms, requirements and fees, and zoning and land use regulations. It earned an “A+” as the fourth least-costly city nationwide for hiring new employees.

America’s Top States for Business

CNBC put Arizona 22nd in its 2012 study of competitiveness for business among states. The cable news station used 51 metrics developed by the National Association of Manufacturers, the Council on Competitiveness and state participation.

Arizona ranked second in the nation for its workforce, based on education level, available workers, union membership and training programs that place participants in jobs.

The state also ranked in the top 10—no. 9—for infrastructure and transportation. That measured the value of goods shipped by air, land and water, as well as air travel availability and road quality.

Education was Arizona’s worst ranking—no. 49—in which the study looked at K-12 education measures (test scores, class size and spending) and the number of higher education institutions.

One other bottom-10 ranking came in the economy category. The study, which looked at “basic indicators of economic health and growth,” put Arizona no. 44.

The Big Picture We See

Looking at these studies at the same time, we feel good about the reputation of Arizona’s workforce and how we’re in the middle of the pack in the business environment.

That means plenty of entrepreneurs, business owners, business executives and site selectors might be willing to take a look at what we have to offer compared to about half the states.

But they won’t automatically take a look nor will they be easily convinced to do business here.

There’s plenty of work to be done for Arizona to be a top-tier state that draws a lot of consideration and a good share of business.