40 of 100
40. Olympia, Wash.
Population: 46,605
Metro hub: Olympia, Wash.
Pros: Northwestern scenery, supportive tax structure
Con: High cost of living

The top employers in Washington's capital city are all public: the state, the city government, and Providence St. Peter's Hospital. But Michael Cade, the executive director of the city's economic development council, says the talent pool of state workers breeds small-business activity: "They're government employees by day, and entrepreneurs by night."

Local businesses benefit from the city's strategic location between Seattle and Portland, the absence of a personal or corporate income tax, and Thurston County's tax exemptions on manufacturing equipment.

Cade says that plastics and machinery manufacturing are dominant industries, but the city is attracting more high technology, offering tax breaks such as credits of up to $2 million for research and development. Tourism is also on the rise: In addition to an incoming branch of the big hunting outfitter, Cabela, Olympia has waterfront retail and restaurants, and abundant parks and wildlife sanctuaries. The beautiful surroundings encourage environmentalist leanings and healthy living. -Mina Kimes

Interactive map: Olympia, Wash.
Homes for sale Find homes for sale in Olympia, Wash.

NEXT: 41. Asheville, N.C.

Last updated July 02 2008: 11:16 AM ET
More Galleries
A sampling of beers being made with traditional Latin flavors A small but growing number of craft breweries are including passion fruit, Mexican cinnamon and other traditional Latin flavors. More
Banks won't lend? Use these guys instead Banks often have exhaustive approval processes, high minimums, and flawless credit requirements. But there's a wealth of non-bank alternatives for those who need capital fast. Here are some of the leaders. More
Facebook launched my startup These entrepreneurs relied exclusively on Facebook, Twitter and Instagram to jumpstart their small businesses. More

Special Offer
Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.