When Ravi Bhatt took a trip to Bloomington, Indiana, in 2021 to scout potential office space for his new AI-driven software company, Folia, he wasn’t planning to move. He’d spent 17 years building software businesses in Chicago and was dug in there. But as an Indiana University alum, he knew firsthand about IU’s strong academic reputation in AI, machine learning and cognitive science. He wanted an office nearby that would allow for easy collaboration and give him access to both the latest research and top tech talent, including IU’s 50,000 students.
“Moving wasn’t even a thought,” he recalls. “Then I called my wife on the way back and I’m like, ‘Hey, how crazy of an idea would it be to move down here?’”
As it turned out, not so crazy. Bloomington’s smaller college-town feel and more affordable lifestyle was a big draw. “Here, I can pop over to talk to a faculty member on campus, come back to my office in the tech corridor, grab lunch at a great restaurant and then be able to spend time with my family—and do it all in the same day in a way that’s not possible in a larger city.”
Bhatt’s decision was prescient, reflecting a broader shift now taking place across corporate America. Increasingly untethered from traditional, big-city economic centers, companies are gravitating more and more toward states that offer that trifecta of business friendliness, workforce readiness and a better, less expensive quality of life.
The 2025 Chief Executive Best & Worst States for Business rankings show that states that have found that secret sauce are moving up toward the top of the list. Georgia and Utah are examples, both inching up two spots to No. 5 and No. 7, respectively. Virginia climbed three spots to break into the top 10 for the first time in a decade, its success at least partly owed to the an intentional, broader geographic approach to high-tech growth beyond the already-bustling northern corridor near Washington D.C. “Our aim is tech-driven economic expansion throughout the state, not just concentrated in Northern Virginia,” says Jason El Koubi, CEO of the Virginia Economic Development Partnership.
The middle of the list found some noteworthy status changes, as well. Iowa shot up nine spaces to No. 14, and Montana rose six places to No. 15. Wisconsin gained nine to reach No. 21, and Alabama climbed eight to No. 24. In the negative column, Delaware tumbled 10 spots to No. 25, likely owed to tax hikes and changes in litigation policies making the state less attractive for business incorporations.
Arizona sank six spots to No. 10, though its recent challenges may be due in part to its success. “The state has grown so much from a population standpoint and has had so much investment coming in over the last 10 to 15 years, they’re a little bit behind now on infrastructure,” says Larry Gigerich, executive managing director of the Ginovus economic development consultancy, who adds that for the first time since 2009, Arizona has a Democratic governor and a Republican legislature, raising the specter of policy gridlock. “It’s a little muddy there right now. Corporate CEOs like stability and predictability.”