Can states become more attractive breeding grounds for small companies? Increasingly, governors and legislators around the United States have been answering with a determined yes. INC.'s Fourth Annual Report on the States once again ranks in the 50 states on factors that are important to small businesses. Beyond these numbers, we examine some of the more interesting efforts of states to improve their business environments: Ohio's struggle against a legacy of bureaucratic neglect (see page 116); Louisiana's plan to shift gears into a new economy (page 112); California's attempt to keep its pot boiling (page 119); South Carolina's push to find more risk capital (page 122); and Washington's drive to put its volatile economy on the path of steady growth (page 120). Running through these stories is a common thread -- a growing awareness that, when it comes to changing a state's business climate, all the solutions are long term.