Delaware, the "First State," has the legal and regulatory attributes that help make it the first state for corporations. My company, DuPont, has been supporting and benefitting from those attributes for more than 200 years.
If my company's experience isn't proof enough, listen to the U.S. Chamber of Commerce, which has ranked Delaware "the number one best legal environment for business" - for seven consecutive years. In addition to that ranking, Delaware scores at or near the top on almost all business and lifestyle ratings. See box page 58. Suffice it to say that more than 60% of the Fortune 500 companies are incorporated in Delaware. Probably the most critical reason for that choice is the state's legal and regulatory environment.
The Best Legal Environment
What makes Delaware such a positive legal environment for business? The number one reason is its fair and balanced judiciary. Business litigants know they will get fair treatment in Delaware's Court of Chancery, the state's equity court, where cases are tried without juries, and where there is 100 years of corporate case law to rely on. For a detailed discussion of the court system, see the interview with Delaware Chief Justice Myron T. Steele on page 59.
Delaware's legal environment and concentration of corporations have attracted or created excellent law firms, as well. The state's law firm population has tripled in the last 20 years. When it comes to corporate practice, many of these are world-class firms, including a couple of DuPont's primary outside law firms, Morris James LLP and Potter Anderson & Corroon LLP.
The third reason for such a positive legal environment is that politics in Delaware is up close and personal, created by smallness of the state. Policymakers and administrators from both the executive and legislative branches are accessible and collegial. They will listen to the business point of view, and they will come together on issues of great importance. Smallness is an advantage in government. Local politicians can come together much more easily without the partisanship of national politics.
Speaking of national politics, another benefit of the Delaware location is that it's an hour and fifteen minute train ride to Washington, D.C. You're not inside the beltway, but you're close enough to it to know what's going on. We have a window on D.C. In fact, I represented DuPont in Washington for many years and still travel there regularly on company matters.
"Location, Location, Location"
Delaware's closeness to D.C. is but one of many business benefits of the state's ideal location in the center of the Mid-Atlantic region. The nearness to Baltimore, Philadelphia and New York not only gives you quick access to these business centers, but also access to major international airports. Delaware is geographically suited for international business travel. For example, there are direct flights to Europe from Philadelphia and to Asia from New York. Delaware's proximity to D.C. and New York, plus the airport access, make the state attractive to foreign corporations and investment as well. With DuPont's global reach, in the last few months I've been to Asia and South America. It also helps to have interstate highway I-95 as well as Amtrak running right through the state, plus a deepwater port and marine terminal in Wilmington.
As home to such companies as DuPont and AstraZeneca, Delaware has become a magnet for biotechnology, health and life services and chemistry companies. Strong state and local economic development programs and availability of venture capital funding give companies in these industries a distinct advantage by doing business in Delaware. Delaware's pro business legal and regulatory environment has made it a haven for the financial services industry, both national and international. Several of the world's largest banks are either headquartered or have a presence in the state, as well as Delaware's largest homegrown bank, Wilmington Trust Company. Finance has become the largest private sector employer in Delaware.
These companies can depend on a skilled labor pool, as well, spurred on by the proximity of related businesses and the state's programs to recruit highly skilled workers. In a recent report, the Political Economy Research Institute at the University of Massachusetts Amherst ranked Delaware as having the best work environment in the nation. And business is well supported by higher education programs at such schools as the University of Delaware, Delaware State University, Delaware Tech, Wilmington College, and Widener Law School.
One education area that needs improvement is Delaware's public school system. Right now Delaware has a very high percentage of students enrolled in private, independent schools, rather than public schools. But we're working on reversing that trend through the Vision 2015 Program encompassing a range of educational reforms. It will help make Delaware an even more attractive place to live for young families.
Interconnected with the legal and business benefits of Delaware is the state's quality of life. It's a great place to live as well as work. Delaware boasts open space, the Atlantic beaches, a temperate climate, and many attractions such as Winterthur and the Nemours Mansion and Gardens. Its two major cities, Wilmington and Dover, have made many magazine lists as top U.S. cities. And Delaware is one of the most taxpayer friendly states in the Union. For example, the state has no sales tax, making it a great shopping area for residents as well as visitors.
If I sound like a pitchman for Delaware, I am. Often I'm asked by government leaders to speak to visiting corporate executives considering locating to Delaware. I'm proud and pleased to recommend the state because I truly believe that Delaware's legal, business and lifestyle attributes make it the country's first state for corporations.
Delaware's national rankings offer a glimpse into why so many companies call Delaware their home.
#1 Industry R&D investment
#1 High-wage traded service jobs
#4 Innovation capacity
#4 Scientists and engineers
#7 Overall transformation to a New Economy
#8 Knowledge jobs
Source: 2007 State New Economy Index, Kauffman Foundation/Information Technology & Innovation Foundation
AAA Performance, business vitality, development capacity
#1 Initial public offerings
#3 Private research & development
#5 PhD scientists and engineers
Source:2007 Development Report Card for the States, Corporation for Enterprise Development
#1 Best legal environment for business
(7th consecutive year) U.S. Chamber of Commerce
#1 Job opportunities, job quality, and workplace fairness
Political Economy Research Institute, University of Massachusetts Amherst