The ‘State of State Assistance’ for Tech Startups

Within a competitive national landscape, New Jersey is leveraging an array of programs and support networks aimed at helping high-tech startups and companies thrive here.

By George N. Saliba, Contributing Writer On May 31, 2024

New Jersey’s storied history as a technology hub continues via behemoth companies such as Nokia Bell Labs as well as through startups that have been attracted to the state for many reasons, including but not limited to: Proximity to Manhattan’s financial markets, a highly educated/skilled labor force, lower costs when compared to New York City, and assistance provided by the State of New Jersey. The latter point is especially notable against the backdrop of fierce interstate competition for both tech workers and tech companies themselves – including those involved in emerging AI endeavors. 

As an independent government agency, the New Jersey Economic Development Authority (NJEDA) has been playing a role in attracting, retaining and growing tech firms and other companies. “Within the NJEDA – and within the [NJEDA’s] economic transformation division – our entire raison d’etre is to support innovation and technology companies in the state,” Ram Akella, executive vice president for innovation impact at the NJEDA, tells New Jersey Business Magazine. “To that end, over the years we have curated various programs that facilitate and support companies from ideation all the way through growth.”

The NJEDA has swelled to approximately 400 employees and delivers myriad programs such as New Jersey Innovation Fellows, which provides would-be entrepreneurs with income replacement grants. The NJEDA separately offers a New Jersey Angel Investors Tax Credit program in which investors worldwide can recoup up to 25% of their investment in New Jersey startup companies to either reduce the cost basis or to increase the amount of their financial investment in a company.

The NJEDA has additional undertakings, such as the Net Operating Loss (NOL) program, which allows tech and life sciences companies to sell their New Jersey net operating losses and/or research and development (R&D) tax credits for cash. Meanwhile, the $5 million NJ Entrepreneur Support Program provides a guarantee of an investor loan advanced for working capital to businesses. Additionally, the NJ Accelerate Program promotes tech accelerators in the state and, separately, the New Jersey Innovation Evergreen Fund is a co-investment vehicle for venture and private equity funds to invest in New Jersey companies. 

CSIT 

The NJEDA is also collaborating with other entities in its framework including the New Jersey Commission on Science, Innovation and Technology (CSIT), the latter whose mission is to formulate and implement long-range plans and programs for science, innovation, and technology in the state. 

CSIT Executive Director Judith Sheft highlights a range of specific CSIT efforts, including managing the website Research with New Jersey, an online portal which features information such as research conducted by STEM faculty members at Princeton University, Montclair State University, New Jersey Institute of Technology (NJIT), Rowan University, Rutgers University and Stevens Institute of Technology. 

Sheft says small businesses can contact CSIT to request conversations with specific researchers. Startup companies can additionally receive up to $40,000 in R&D vouchers that enable them to use specialized equipment at universities such as electron beam microscopes, animal testing facilities or, say, wave tanks. 

CSIT holds a twice-monthly conference call with its university partners as well as Hackensack Meridian Health, Joint Base McGuire-Dix-Lakehurst, Picatinny Arsenal, Corriell Institute for Medical Research, and Hackensack Meridian Health’s Center for Discovery and Innovation. “We’ll say to them: ‘Here’s a company that’s looking for [a particular type] of support,’” Sheft says. “‘Who has equipment that can help this company with a project?’” 

New Jersey’s Tech Climate

New Jersey’s efforts are within the context of broader trends on the national stage: Many Americans exited urban centers during and following the pandemic in part to leverage work-from-home routines, enjoy lower costs of living, and avoid concerns about crime, for example.

Without mentioning those specific reasons, Jim Barrood, the founder and CEO of Innovation+, a global community of more than 10,000 entrepreneurs and innovators, says the “exodus of folks from New York City into our amazing state and green suburbs” has been a benefit for New Jersey tech innovation. He adds that a rise in entrepreneurship across the nation has likewise been a boon for New Jersey. 

While Barrood is pleased that New Jersey remains in the top 10 states for technology and has a “grand legacy” of innovation, he adds, “We have to work even harder to keep people here. It’s just very competitive, and these other regions and states are making it very attractive [for people to move to those locales].”

Although Barrood is “delighted” that Governor Murphy has made AI a key focus (Murphy has established a state artificial intelligence task force and announced alongside Princeton University’s president plans for constructing an AI research and development hub at the university), he explains that “it is still going to be a battle.” 

He adds, “If we can get some momentum and attract [human] talent for AI, that could be a real game changer for [the state] in the future.”

Feeding the Pipeline

At least part of that future appears to involve preparing a capable tech workforce. With education part of that equation, the nonprofit Research & Development Council of New Jersey (RDNJ) has been assisting with several programs. It is, by all accounts, making a difference. 

“The R&D Council’s Governor’s STEM Scholars program provides an up-close look at the variety of STEM opportunities available for students here in New Jersey,” explains Kim Case, RDNJ executive director. “They get to see scientists in their labs at work, engineering potential at the NJIT Makerspace Lab, visit nuclear power plants to see the future of energy, and many other highly technical jobs that are available for them right out of college. In fact, many of the scholars get internships at STEM companies while they are in college. 

RDNJ President Anthony Cicatiello adds, “It is a win-win situation for everyone in New Jersey and we can see the excitement in the scholars when they realize that all of these opportunities are right here in the state where they grew up. As for entrepreneurship, many of them are already working on start-ups for themselves or in collaboration with established companies.”

Conclusion

The State of New Jersey is, again, helping to pave the way for companies throughout the state. The NJEDA’s Akella concludes, “We [at the NJEDA] have been in growth mode. I’ve been with the authority for 17 months or so, and since my being here, we’ve stood up at minimum eight or nine new products and refined them, etc. That process [occurs] on a daily basis. We take pride in that.”

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