Minnesota is number seven on CNBC's annual ranking of the top places to do business, moving up one spot from last year.
CNBC's fifth-annual study ranked all 50 states based on 10 categories: cost of doing business, work force, quality of life, economy, transportation and infrastructure, technology and innovation, education, business friendliness, access to capital, and cost of living.
Minnesota ranked high in quality of life (8th), education (10th), and infrastructure and transportation (15th). However, the state's economy ranking dropped drastically. The rankings also suggest that while the cost of doing business in the state has gone down in the past year, the cost of living has gone up. Read more about the factors that played into Minnesota's ranking here.
Virginia topped the list, knocking out Texas-which was last year's top-rated state-to second place, and capturing first-place honors for the third time in five years. CNBC said Virginia's tax burden improved considerably, and so did its education, reflecting a 2009 effort to reduce class sizes.
Rounding out the top five states were North Carolina, Georgia, and Colorado. Rhode Island fared the worst, followed by Alaska, Hawaii, and Mississippi.
On a recently released Forbes list of the best cities in which to do business, the Minneapolis-St. Paul metro area ranked 34th.