New Jersey’s economy will grow in the future only if it is able to attract and nurture high-tech businesses that thrive on innovation. Talent, education and facilities give New Jersey an economic advantage. It’s an advantage the state had enjoyed for many years, but in the 21st century, it has lost ground to New York, Massachusetts, Maryland and Pennsylvania. That’s why NJBIA has been working proactively to make New Jersey the leader in innovation once again.
Business incubators. Incubators help get businesses off the ground by providing the overhead for entrepreneurs who are still in the development stage; they are an essential economic development tool. Unfortunately, New Jersey is well behind its peers. The state has only 15 incubators and business accelerators, compared with 375 in California and 179 in New York.
NJBIA advocates for the creation and expansion of these facilities. Last year, the Assembly approved NJBIA-backed legislation to create a grant program for incubators and the businesses they support.
Venture capital. Early investors are the lifeblood of any startup, particularly in high-tech, innovative businesses. Yet New Jersey again lags behind its peers in the amount of investments it attracts. According to the McKinsey report, New Jersey attracted $1,493 per capita in venture capital from 2010 to 2014, well below Massachusetts ($9,347). In 2016, New Jersey attracted about half of the venture capital investment of neighboring Pennsylvania and a fraction of the investments made in New York.
New laws providing tax incentives for angel investors who help get companies from research to production have made New Jersey more attractive to venture capitalists, but more needs to be done.
Business-academic partnerships. Universities and colleges need to collaborate with businesses to leverage higher education research and their facilities. This is essential to creating an innovation ecosystem that will make New Jersey competitive well into the future. A number of schools have adopted policies to make it easier for their researchers to collaborate with business. NJBIA is also encouraging the state to establish a database of academic resources the private sector can use.
NJ Innovation Institute (NJII). Created in 2014 by the NJ Institute of Technology in Newark, NJII is a great example of the kind of academic-business partnerships New Jersey needs. NJII operates business incubators and accelerators, makes its laboratory and research facilities available to the private sector and even lines up venture capital investments. More than 90 seed, startup, and expansion companies are participating in the program.