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New Jersey Commits $25M for Innovation Zones

September 13, 2004

Location-based tax incentives to encourage the clustering of technology companies in distressed areas or around research universities has grown in popularity since Michigan's smart zones were created several years ago.

Last week, New Jersey Gov. James McGreevey signed an Executive Order creating three Innovation Zones – industry clusters centered around and including the campuses of the New Jersey Institute of Technology, Rutgers University, and the University of Medicine and Dentistry of New Jersey.

The concept underlying the Innovation Zones is to create an innovation triangle – a partnership among tech-based companies, the state’s research universities, and state government. Mutual proximity is expected to lead to partnerships between businesses and universities to better meet research and development needs.

The Executive Order directs the New Jersey Economic Development Authority (NJ EDA) and the New Jersey Commission on Science and Technology (CST) to work cooperatively with other state agencies to direct resources that will support financial, infrastructure, workforce and housing needs at the zones.

Businesses in the zones will be eligible for a range of targeted financial incentives from the state – including Business Employment Incentive Program grants, the Springboard Fund, and Technology Tax Certificate Transfer funding programs, which offer enhanced benefits to tech-based businesses in the zones.

In addition, New Jersey's Innovation Zones will offer new Commercialization Centers – multi-tenant facilities featuring labs or office space to be built and managed by the NJ EDA. These facilities, along with business incubators funded by the CST, will provide critical space and support services for early-stage and start-up businesses to conduct joint research and help move ideas from the lab to the marketplace.

“In addition to these enhanced incentives and coordinated state effort, the NJ EDA will continue to work closely with the business community to make all of our financing programs – including bonds, loans and guarantees – available to the emerging technology firms of New Jersey,” said NJ EDA Chief Executive Officer Caren S. Franzini.  [Note: Ms. Franzini is among the impressive slate of 50-plus presenters and panelists for SSTI's annual conference Oct. 13-15 in Philadelphia. More details are available at: http://www.ssti.org/conference04.htm]

New Jersey