Key Indicators of Innovation 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
MA & NY Lead Region 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.
NJ Can Be the “Innovation State” Again 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.
10 Recommendations to Reclaim NJ’s Stature 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:
- Modify New Jersey’s R&D Tax Credit to better align with leading innovation states.
- Increase annual funding for the NJ Commission on Science, Innovation and Technology to directly increase the number of SBIR and STTR awards granted to small businesses.
- Form public-private partnerships with state government and the state’s venture capital funds to reduce investment risk for both parties.
- Foster public-private partnerships to attract and retain top-tier talent in the Garden State.
- Adopt GLOBAL EIR at New Jersey’s higher education research institutions to retain top-tier international students and recent entrepreneur graduates.
- Expand R&D STEM fellowship programs in New Jersey to attract and retain innovation talent in New Jersey.
- Provide additional incentives through the Angel Investor Tax Credit to small and medium, high-growth companies.
- Create a commission to review New Jersey’s regulatory structure, with the goal of identifying and reducing inefficiencies and overly burdensome red tape.
- Reinstate a corporate tax incentive program in New Jersey.
- Implement structural reform to improve New Jersey’s business climate.