The Best Places For Business

Outsourcing may be all the rage these days. But many companies are still looking homeward--with good reason: low business costs and an educated work force. For our sixth annual survey of Best Places for Business and Careers, we turned to Economy.com, the West Chester, Pa.-based economic and financial research firm. The resulting business cost index weighs expenses related to labor, energy, taxes and office space. To assess the qualifications of the work force we took into account the concentration of college graduates and Ph.D.s in an area. We also factored in job and income growth, migration patterns and crime rates. This year we added a culture and leisure index to the rankings. Compiled by Portland, Ore. consultant Bertrand Sperling, the index considers such amenities as museums, theaters, golf courses and sports teams. For more detailed information on the 150 largest metro areas, go to the Best Places For Business Special Edition, where you'll also find a ranking of 168 smaller metro areas and their vital stats.

1. Madison, Wis.
Population: 443,000. Job Growth: 1.5%. Income Growth: 4.3%. Big Employers: University of Wisconsin, University Hospital & Clinics, American Family Insurance, Meriter Health Services, Mutual Group.

In Madison 41% of the adult population has a college degree--almost twice the national average. Per capita income is growing quickly. All that helps create a tight labor market: At 2.7%, unemployment is the lowest of any of the 150 largest metro areas.

2. Raleigh-Durham, N.C.
Population: 1,268,000. Job Growth: 1.1%. Income Growth: 2.4%. Big Employers: Duke University & Medical Center, University of North Carolina at Chapel Hill, IBM, North Carolina State University, Health Care.

Research Triangle Park in Raleigh-Durham is home to nearly 40,000 employees at more than 130 companies, including SAS and Cisco. Total job growth is expected to rise 14% in the next five years.

3. Austin, Tex.
Population: 1,349,000. Job Growth: 1.7%. Income Growth: 3.5%. Big Employers: University of Texas, Dell, Motorola, IBM, Seton Healthcare Network.

Last year's top-ranked metro area, Austin has been hurt by tech's slowdown. But things are looking up. Apple and AMD recently expanded operations there. And patent issuance was up 10% last year.

4. Washington, D.C.-Northern Va.
Population: 5,162,000. Job Growth: 2.1%. Income Growth: 4.3%. Big Employers: Verizon Communications, Safeway, Marriott International, Inova Health System, US Airways.

The District of Columbia itself makes up only 12% of the population of the total metro area, which includes parts of Maryland, Virginia and West Virginia. It ranks among the top regions for educated work force, income growth and culture and leisure. Only high costs keep it from ranking first overall.

5. Atlanta, Ga.
Population: 4,386,000. Job Growth: 1.1%. Income Growth: 2.9%. Big Employers: BellSouth, Delta Air Lines, Kroger, Emory University, Publix Supermarkets.

Business costs in Atlanta are the lowest of any area with a population of more than 4 million, and 6% below the national average. Two other plusses: It has the most industrial diversity within the top-rated areas; Atlanta's Hartsfield-Jackson airport has the second-greatest number of flights of any airport in the world.

6. Provo, Utah
Population: 388,000. Job Growth: 1.5%. Income Growth: 2.1%. Big Employers: Brigham Young University, Utah Valley State College, Health Services, Convergys, Novell.

Low costs keeps Provo on the radar for companies looking to relocate or expand. Business expenses are 7%lower than the average in the U.S. Per capita income is only $19,300 compared with the national average of $30,400. Helping to feed the labor force is one of the highest birth rates in the country.

7. Boise, Idaho
Population: 465,000. Job Growth: 2.5%. Income Growth: 1.9%. Big Employers: Micron Technology, Mountain Home Air Force Base, St. Luke's Regional Medical Center, Albertsons, Hewlett-Packard.

While not exactly a transportation hub, Boise continues to attract people from all over the nation thanks to low costs and job growth that has risen more than three times the national average during the past five years. Boise's net migration rate ranks fifth overall at 2.0% a year.

8. Huntsville, Ala.
Population: 354,000. Job Growth: 1.2%. Income Growth: 0.1%. Big Employers: U.S. Army Redstone Arsenal, Huntsville Hospital System, Cinram International, NASA, Boeing.

What Huntsville lacks in size it makes up for in brains: 31% of the population has a college degree (U.S. average: 24%). Pentagon contracts account for 25% of the region's nominal GDP in 2002, the highest rate in the U.S.

9. Lexington, Ky.
Population: 490,000. Job Growth: -0.1%. Income Growth: 1.8%. Big Employers: University of Kentucky, Toyota Motor, Lexmark International, St. Joseph Hospital, Central Baptist Hospital.

The horse capital of the world has the second-lowest business costs, after Albuquerque, N.M., of any area with a population greater than 200,000, and they're 19% below the national average.

10. Richmond, Va. Population: 1,023,000. Job Growth: 1.0%. Income Growth: 3.2%. Big Employers: Capital One Financial, Philip Morris USA, HCA, Wal-Mart.

A metro area for all seasons, Richmond is the only area to rank in the top half of our list for each of the nine criteria we examined.