NJ lags behind most nearby states in innovation
A new report that examines New Jersey’s innovation economy and compares it to other states in the region finds the Garden State is near the bottom of the pack. But the state is taking some positive steps which could improve its future standing.
The New Jersey Business and Industry Association’s 2022 Indicators of Innovation report analyzes data for 12 indicators in three major areas that are considered key for a robust innovation ecosystem: capital, talent and business.
Kyle Sullender, NJBIA’s director of economic policy research, said the report finds “New Jersey’s status with regard to it’s innovation economy did slip slightly relative to its regional neighbors in 2022.”
He said Massachusetts (with a total of 69 points) and New York (65) remain the regional leaders in innovation, followed by Pennsylvania (51) and Maryland (45).
New Jersey drops lower in innovation
New Jersey is tied with Connecticut for fifth place with 41 points each, while Delaware ranked last with an innovation score of 26.
In the last report in 2020, Jersey was ranked 4th with 44 points.
In the 7-state comparison, NJBIA scored each of the 12 indicators from 1 (least competitive) to 7 (most competitive), with a potential high score of 84 points.
What kind of innovation?
Sullender said many different kinds of factors are considered in the report including “the innovative capacity of small, high-growth ceiling businesses, and so there we may be talking about small venture capital start-ups.”
He noted, “at the same time we’re also talking about innovative capacity, so we’re talking about the talent level of a state, how many individuals there have graduated or advanced degrees.”
He said other areas examined include the ecosystem in a state for entrepreneurs, and what kind of a business climate a state has.
Sullender said Jersey get positive marks for the reinstitution of a state tax incentive program and the creation of the New Jersey Evergreen fund, which helps get more dollars into the venture capital space, but on the flip side “when you look at our regional business climate New Jersey not only ranks last in the region but last in the country as well.”
Another problem is brain drain
About 27,000 more students leave New Jersey to go to college than come into New Jersey for a degree.
He noted the report makes a series or recommendations to help the Garden State improve its competitiveness, like increasing support for research and development funding.
“New Jersey was the only state since 2010 to experience a decrease in those expenditures,” he said. “When other states are seeing dramatic increases in their investment, looking at a state like Massachusetts for instance, the state of New Jersey has decreased very slightly.”
He added the report indicates there are opportunities “where relatively small seeming changes could have significant effects on our competitiveness and our ability to bring innovative individuals and companies to New Jersey moving forward.”