New Jersey’s long-established innovation economy needs help in the form of tax incentives and research funding if it’s going to regain its stature, NJBIA told an Assembly committee today.
NJBIA Policy Analyst Nicole Sandelier said New Jersey was lagging the region in venture capital investments, R &D funding, top-ranked higher education institutions, and workers with advanced education.
“Earlier this month, NJBIA released a report titled Indicators of Innovation, which shows New Jersey at a challenging crossroads in its efforts to reclaim itself as the ‘Innovation State,’” Sandelier said. “Compared with six other regional states, New Jersey is struggling to compete.”
Out of seven states she compared, Sandelier said New Jersey came in fifth overall. New York ranked first in the region with an overall score of 71, followed by Massachusetts (63), Pennsylvania (49), Maryland (46), New Jersey (41), Delaware (34) and Connecticut (33).
Among the findings she reported:
- New Jersey’s venture capital investment in 2017 was $781 million, compared to the $8.97 billion received by Massachusetts and $12.27 billion received by New York.
- New Jersey companies received less than $52 million in award obligation for federal R&D funding in 2017, below Massachusetts, Maryland, New York and Pennsylvania.
- New Jersey is home to three “Top 100” colleges/universities ranked in 2018 by U.S. News & World Report, compared to 10 each in Massachusetts and New York; and six in Pennsylvania.
- New Jersey lost a net total of more than 28,000 first-time college students in the fall of 2016, the largest loss in the nation. By comparison, Pennsylvania had a net gain of nearly 17,000 students that year.
- In 2017, New Jersey was fifth out of seven regional states with 15.6 percent of its population possessing a graduate or professional degree.
Not everything was bad news, however. She told the committee that New Jersey fares well in the Rate of New Entrepreneurs regionally, coming in second behind New York, and that the state’s startup density was 76.1 per 1,000 employer firms in 2017, good for third in the region behind New York and Delaware.
Based on the overall findings, however, New Jersey needs to change several policies to start climbing the innovation state ladder.
Sandelier recommended increasing the tax incentive thresholds for its successful Research and Development Tax Credit and the Angel Investor Tax Credit. The state also needs to support its universities and research institutions, particularly when it comes to increasing the amount of federal R&D funding they receive. She also said the overall business climate should not be ignored as a factor.