NJ recommits to technology-based economic development

New Jersey, long considered a state-leader in technology-based economic development prior to the Great Recession, has committed to reinvesting in its innovation economy. In addition to the legislature overwhelmingly approving a bill to reconvene the New Jersey Commission on Science and Technology — the state’s primary technology-based economic development organization — Gov. Phil Murphy also announced several other initiatives to support innovation and entrepreneurship in the state.

The New Jersey Commission on Science and Technology was developed by Gov. Thomas Kean in the early 1980s to make recommendations on economic development. In 1984, 60 percent of voters approved a $90 million “Jobs, Science and Technology Bond Issue,” which was recommended by the commission and provided funding for activities such as applied research centers at colleges and universities. The commission operated for more than 25 years with bipartisan support. Writing in the New Jersey Tech Weekly, angel investor and accelerator founder Mario Casabona notes that, “most of the successful tech companies, incubators, centers of excellence and funding programs that exist today in the state can be attributed to the work of the Commission.”

In the height of the financial crisis, then-governor Chris Christie did not include funds for the commission in his 2010 budget proposal or in any of the state’s subsequent budgets. Although the commission was not formally dissolved, it did not receive any funds for operations during his administration. With the election of Gov. Phil Murphy earlier this year, however, there were signs of a re-emergence.

Early in the Murphy administration, the governor appointed a New Jersey Biotechnology Task Force to make recommendations on improving the industry’s competitiveness in the state. One of the main recommendations of the task force was to implement the New Jersey Science and Technology Commission and its previous slate of activities.

Last month, the New Jersey state legislature overwhelmingly passed S-2329/A-3652, to re-establish the 17-member commission tasked with developing policies and programs related to science, technology and innovation. The commission is also tasked with promoting collaboration between industry and higher-ed through advanced technology centers, innovation partnership grants, incubators, and extension services, and ensuring that these programs are adequately funded.

The state’s FY 2019 appropriations bill signed by  Murphy last month will provide $1 million for the commission’s activities.  Furthermore, the governor announced two notable initiatives this week to support the state’s innovation economy.

The first of these initiatives would assist startups with rent at incubators, accelerators, and co-working spaces. Called The Incubator and Collaborative Working Space Rent Initiative (ICWRI) and operated through the NJ Economic Development Authority, the program will provide matching grants for two, four, or six months of rent payments, with a maximum benefit of up to $15,000 per startup. The program also will provide an additional one month of support for each of the following workspace characteristics: recently established, in an Opportunity Zone census tract, or affiliated with a hospital system or New Jersey university.

The governor also announced that the state is modifying its criteria for the R&D tax credit, which has operated within its original criteria since 1992. “The changes to the tax-credit program included updating and expanding the list of research activities that qualify for the tax credit, and allowing companies to qualify for larger credits,” according to an NJSpotlight report.