A robust innovation ecosystem requires coordination and a willingness to make tough decisions in order to realize both short-term and long-term benefits. Together, government, academia and business can make the vision of revitalizing New Jersey’s innovation ecosystem a reality if we collectively address key indicators of innovation.
The vision of the New Jersey Business & Industry Association (NJBIA) is for the Garden State to reclaim its stature as the innovation state; the home of economic vitality, business prosperity, workforce skill excellence, and a great quality of life for New Jersey businesses and individuals. To that end, NJBIA has spent years studying key components of successful innovation ecosystems. Our extensive analyses have led us to conclude that creating a successful innovation ecosystem requires the strong presence of three categorical indicators: capital, talent and business.
Capital is the lifeblood of any business. The amount of cash flow in and to a state dictates the opportunities available to individuals and to businesses. Talent is another critical component to a state’s ability to create an innovation ecosystem. A highly educated, highly skilled workforce plays a significant role in creating an innovation ecosystem. Finally, without business there is no economy. Having a competitive business climate can make or break a state’s ability to attract and retain innovative businesses. A healthy/competitive business climate can spur innovation, while an unhealthy/uncompetitive climate can deter innovation in a state.
As part of our innovation research, NJBIA released an expanded “Indicators of Innovation” report in 2020, which was an update from our first report in 2019. The study looked at 12 indicators of innovation and scored them among our regional states to better understand the presence of an innovation ecosystem throughout the region. The 12 indicators, which fall within three categories (mentioned above), are listed below:
Capital Indicators: Venture Capital Investment – Assets Under Management, SBIR/STTR Award Obligation, State R&D Expenditures, and National Science Foundation Award Totals
Talent Indicators: Number of Institutions Ranked in the Top 100, Net Migration of First-Time, Full-Time College Students, Percentage of Population with a Graduate or Professional Degree, and Rate of New Entrepreneurs
Business Indicators: Number of Patents Granted, Rate of New Employer Business Actualization, Net Business Growth, and Business Tax Climate
The 2019 study found that New Jersey’s overall regional innovation score ranked fifth, behind Maryland, Pennsylvania, Massachusetts, and regional leader New York. The findings of the updated 2020 study suggests that New Jersey’s overall innovation score has moved little since the original release. Massachusetts and New York continue to be regional leaders, while New Jersey finds itself competing with Maryland to claim the 4th seed.
In the days of Thomas Edison, Nikola Tesla, and Alexander Graham Bell, the Garden State reigned as the “Silicon Valley” of the East, acting as a model of growth and innovation for other states to mirror.
Today, the Garden State is at a crossroads. New Jersey possesses all the qualities that are needed to reinvent and grow an innovation ecosystem; an ideally centralized location, nationally recognized K-12 academics, quality higher education institutions, and a highly educated, highly skilled workforce. However, the state’s inability to retain and attract top-tier talent along with a poor tax climate are hindering the Garden State from reclaiming its previous glory.
Done the correct way, the Garden State can attract top-tier talent to New Jersey’s postsecondary institutions, build “live, work and play” communities, increase venture capital investment, and target industry clusters for growth. To get there, we need coordination and a willingness to make tough decisions that, if made today, will reap great short– and long-term returns to the state. Together, government, academia and business can make the vision of revitalizing New Jersey’s innovation ecosystem a reality.
Simply put, New Jersey has the capacity to be a leader in innovation, but has yet to capitalize on its assets by addressing existing obstacles. And, given the drastic impact that COVID-19 pandemic has had on New Jersey’s economy, leaders across government, business and academia must implement concerted measures today to bolster innovation and growth as New Jersey emerges from this historic crisis. To read NJBIA’s 2020 Indicators of Innovation report in its entirety, please visit https://njbia.org/indicators-of-innovation.
To help New Jersey reclaim its stature as the innovation state, NJBIA set forth 10 recommendations in our 2020 report, which we are working to implement today. The recommendations are as follows:
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