RAPID CITY - The city's recent ranking as the nation's seventh best small city to start a business or a career is good national exposure and a good marketing tool for the area, said Bob DeMersseman, president of the Rapid City Economic Development Partnership.

"It validates what we say to (prospective) businesses, that this is a business-friendly state," DeMersseman said of the Forbes Magazine ranking.

It also shows local entrepreneurs that their start-up companies, large or small, have a better shot at success here than they would elsewhere in the country, he said.

Each year Forbes, the business magazine, ranks U.S. cities large and small on a variety of measures. It rates the best companies, best business schools, richest Americans, richest celebrities. It also rates cities on everything from most overpriced real estate to the best places for young professionals.

The annual ranking for businesses and careers compared Rapid City and 178 other small metropolitan statistical areas for the cost of doing business, cost of living, education levels, colleges, crime, cultural attractions, income growth, job growth and net migration.

In 2005 and 2006, Rapid City was ranked No. 6 among small MSAs. In 2004 it was ranked 10th.

This year Sioux Falls again took the No. 1 spot. Rounding out the top 10, in order, are Bismarck, N.D.; Columbia, Mo.; Fargo, N.D.; Iowa City, Iowa; Bloomington, Ind.; Rapid City; Las Cruces, N.M.; Morgantown, W.Va.; and Johnson City, Tenn.

Forbes applies the same measures to 200 large MSAs. This year Raleigh, N.C., took the top spot, followed by Provo, Utah; Boise, Idaho; Des Moines, Iowa; Knoxville, Tenn.; Albuquerque, N.M.; Durham, N.C.; Fayetteville, Ark.; Nashville, Tenn.; and Olympia, Wash.

Rapid City's cost of doing business, ranked second-best among the 179 small metros, seemed to be the factor that put the city in the top 10. Sioux Falls was first in that category.

The city's low cost of doing business could be interpreted as low wages, which is good if you own a business but not good if you're starting a career.

DeMersseman conceded that lower-than-average wages might have influenced the city's high ranking. But he believes attracting new businesses, especially those that require skilled, educated workers, will bring wages up.

"Until we start competing for skills, we're going to be faced with that," he said. "But also the tax structure, real estate costs and those kinds of things make us more competitive."

The other categories, and Rapid City's ranking, were:

- Colleges - the measure of four-year colleges, including highly rated schools - No. 42.

- Cost of living - housing, utilities, transportation and other costs - No. 73.

- Crime rate - the number of crimes per 100,000 residents - No. 62.

- Culture and leisure - museums, theaters, golf courses, sports teams and other activities - No. 31.

- Educational attainment - share of over-25 population with a bachelor's degree or higher - No. 47.

- Income growth - No. 67.

- Job growth - No. 76.

- Net migration - population growth not attributed to births and deaths - No. 109.

Contact Dan Daly at 394-8421 or at dan.daly@rapidcityjournal.com