Top 10 Best cities for business in America

The recession spared few U.S. cities, wiping out 9.4 million jobs between November 2007 and August 2009. Many will never return, and those that do you probably won’t find on the East or West Coast. For the most active areas of job creation (and lower costs of doing business) you have to go to the heartland, home to 80% of the top 25 regions on our list of Best Places for Business.

“Washington’s been adding a tremendous number of jobs for a number of years,” said Kevin Klowden, a managing economist at the Milken Institute in Santa Monica, Calif. Klowden and other institute researchers recently performed their own study on the best cities for business and ranked Washington high on their list as well, sixth overall and tops among major metropolitan regions.

The Top Cities in America for doing business are not at all where most people think, and there’s good data to back that up. This year Inc. publishes an exclusive Top Cities list, using a brand-new methodology that we believe to be the most objective, reliable system used anywhere for ranking fertile ground for companies.

The categories and weightings, for a total of 2,500 points, are:

Cost of Doing Business (450 points)

Workforce (350 points)

Quality of Life (350 points)

Economy (314 points)

Transportation & Infrastructure (300 points)

Technology & Innovation (250 points)

Education (175 points)

Business Friendliness (175 points)

Access to Capital (50 points)

Cost of living (25 points)

We use publicly available data on the metrics in each category to score the states, and then add up those scores to rank America’s Top States for Business.

1. Washington, D.C. – 1,100 points: The nation’s capital has been steadily rising up the top 10 list during the four years Market Watch has conducted the survey, and it placed second in 2009. But a number of factors combined to help it take the top prize in 2010.

2. Omaha, Neb. – 1,072 points: Last year’s third-place finisher moved up a notch in the standings, and was at the very top of the class in keeping down unemployment and in the number of Forbes Private Companies.

3. Boston – 1,071 points: Beantown narrowly missed out on the second spot by one point, but remains a perennial contender. Boston was fifth last year, second in 2008 and fourth in 2007.

4. Des Moines, Iowa – 1,057 points: Last year’s top finisher, Des Moines scored in the top third in 10 of the 14 metrics, and in the top half on three of the other four. But Des Moines’s unemployment rate went up over the last year, putting Iowa’s biggest city in the bottom fifth in that category and unseating it from the top spot.

5. Minneapolis-St. Paul – 997 points: The Twin Cities won the first two “Best Cities” rankings in 2007 and 2008, and then dropped to fourth last year when the study was expanded to include more than 100 metro areas. But the region remains strong in a number of key metrics.

6. Denver – 980 points: The Mile-High City is another perennial squatter in the top 10, ranking second, third and seventh in 2007, 2008 and 2009, respectively.

7. Richmond, Va. – 957 points: Richmond continues to reap the rewards of being in fairly close proximity to this year’s top finisher, Washington, D.C. After a one-year hiatus from the top 10 last year, Richmond came back to claim a spot once again.

8. New York – 950 points: The Big Apple’s sheer size long has been, and continues to be, a magnet for business.

9. Harrisburg, Pa. – 939 points: Harrisburg benefits from being a small city that gets a large positive effect by having a few, influential companies in its backyard – and was catapulted into the top 10 by a series of new metrics included this year.

10. Seattle – 932 points: The hub of the Pacific Northwest also made a precipitous climb into the top 10, as it ranked 31st last year due to some poor showings in the job-creation department.

The rankings are derived from three-month rolling averages of U.S. Bureau of Labor Statistics “state and area” unadjusted employment data reported from January 1993 to September 2003. The data reflect the new North American Industry Classification System categories, including total nonfarm employment, manufacturing, financial services, business and professional services, educational and health services, information, retail and wholesale trade, transportation and utilities, leisure and hospitality, and government.