Each year, the Entrepreneurship Council issues the Small Business Survival Index, a measure for comparing how state and local governments treat small business and entrepreneurs. Scientific Atlanta Chief Economist Grant Lawson, who also writes a bi-monthly article for ASIB'S "The Daily ASIB" discusses what entrepreneurs can learn from the Index.

What is the Small Business Survival index, and what does it measure?
The Small Business Survival Index ranks the 50 states and the District of Columbia according to their respective public policy climates for entrepreneurship and small business. Basically, it tries to gauge how friendly or unfriendly the policies are implemented by state and local government officials. The latest edition of the Index includes 23 measures of government-imposed or related costs.

Why is the index important to current and prospective small business owners?
There are many -- indeed, countless -- factors that go into business decisionmaking, but tax and regulatory policies matter a great deal. It's important to know whether government is a plus or a minus in the business decisionmaking process. After all, public policies impact population, economic growth and job creation.

What are some of the key trends from the 2009 index? What has changed over the past few years and why?
Our Index isn't strictly comparable year to year because we try to improve it with each edition. In recent years, though, there have been some clear negative developments -- such as major tax increases in states like New York and New Jersey -- along with some plusses -- such as pro-growth tax relief in New Mexico.

What are the advantages for entrepreneurs who live in the higher-ranked states?
In best ranked states, the overall weight of government on entrepreneurs and small businesses is lighter. For example, the top four states on the 2004 Index -- South Dakota, Nevada, Wyoming and Washington -- impose no personal income, capital gains or corporate income taxes. Those are huge positives for businesses in those states.

By the same token, what are the implications for entrepreneurs who live in lower-ranked states?
At the bottom, public policy can be a serious drag on entrepreneurship. In the worst ranked states, tax and regulatory policies tend to be poor across the board, not just limited to an area or two.

What should entrepreneurs look for in future versions of the index?
As I noted earlier, we try to make the Index more comprehensive each year. I'm looking to get far more specific on various regulatory costs. Regulations can be just as burdensome as taxes for small businesses, so we're trying to take a closer look at regulatory costs across all of the states. That's not easy, but it's important to try.