Promoting partnerships between businesses and higher education is an idea that has taken hold in New Jersey. Policymakers recognize that our economic future will depend a great deal on how well we foster these partnerships and provide an environment where business and academia can work together in collaboration.
The latest initiative is a new law that establishes the Commission on Higher Education and Business Partnerships, which was signed by Gov. Chris Christie earlier this year. The commission is charged with stimulating academic-industrial collaboration in R&D and workforce development. It will also create an executive director to act as an ombudsman, assisting businesses and industry in making the appropriate contacts in higher education to foster these partnerships.
The commission, which includes NJBIA as one of its members, is designed to leverage the work being done in our academic institutions to attract successful companies that thrive on innovation.
Colleges and universities are also doing their part. Recent initiatives like the NJ Innovation Institute’s iLabs and Rutgers University’s Innovation Park@Rutgers are designed to be catalysts for public-private collaboration. At Rowan University, the $5-million Rowan Innovation Venture Fund provides early-stage funding for projects and products that are ready to compete in the marketplace. And Stevens Institute of Technology’s Innovation Expo will hold its 10th annual event in May.
The state has also improved its incentive programs. Take the Angel Investor Tax Credit program, for instance. Angel Investors are entrepreneurs who look for startup companies that need capital to get their business off the ground and provide an investment to make that happen. Such investments can be risky, as 9 out of 10 startup companies fail. The second most frequent reason they fail is running out of money, so a timely infusion of cash can help make or break a company in the startup phase.
The idea behind the tax credit is simple: Investors can take a credit of 10 percent of the amount they invest in a qualified emerging technology company either based in or largely located in New Jersey. The credit cannot exceed $500,000. This encourages investors to look more at New Jersey-based investments and leads to more capital flowing into the state.
Three years after it was enacted, the program seems to be working. Last year, the New Jersey Economic Development Authority approved 251 applications for angel investor tax credits that spurred more than $96 million in private investments, the highest annual total ever.
But as New Jersey makes progress, other states are not standing still. Massachusetts has emerged as a leader in this area, and Penn State University has invested in 20 business incubators.
The reason is not a mystery. While 9 out of 10 startups fail, the 1 in 10 that becomes successful can be lucrative, creating well-paying jobs and generating revenue for the state in which they are based. There is good reason for wanting these companies to succeed here.
New Jersey has all of the ingredients to be a hub of innovation – high-tech industries, outstanding academic institutions, dynamic entrepreneurs, access to capital and a highly educated workforce. And the state is recognized as being a center for innovation. We were recently ranked the fourth most innovative state by Bloomberg.
But that axiom about how in business, “if you’re standing still then you’re falling behind,” is especially true in this case. To make sure New Jersey is moving ahead, we must continue to create an environment that is friendly to entrepreneurs and makes it easy for businesses and academic institutions to collaborate.