NJ Ranks Among Least Innovative States In Regional Area

NEW JERSEY — In a recent report that compares New Jersey's innovation economy to other states in the regional area, the Garden State continues to lag behind its competitors.

The New Jersey Business and Industry's 2022 Indicators of Innovation report revealed that Pennsylvania, New York and Massachusetts surpassed New Jersey's innovation scores in 2022.

The report analyzes data for 12 indicators in three major areas that are considered key for a robust innovation ecosystem. These areas include capital, talent and business.

Capital is the "lifeblood of any business," according to NJBIA, and the amount of cash flow in and to a state dictates that opportunities available to individuals and business.

NBIA also argues that talent — or a highly, educated, highly skilled workforce — is critical to a state’s ability to create an innovation ecosystem.

Lastly, a competitive business climate can spur innovation, while an unhealthy or uncompetitive climate can deter innovation in a state, according to NJBIA.

New Jersey's innovation status dipped slightly below its competitors in 2022, according to the report. Massachusetts, with a total of 69 points, and New York, at 65 points, remain the regional leaders in innovation, followed by Pennsylvania, 51, and Maryland. 45.

New Jersey tied for fifth place with Connecticut with a score of 41 points.

In addition, New Jersey’s average score in the capital category was at a low of 2.75, trailed only by Delaware which scored last in all four categories. Compared to regional leaders New York and Massachusetts, New Jersey’s capacity for investment and research remains low, according to NJBIA.

Some of NJBIA's recommendations for New Jersey to increase its innovation capital include modifying its current Research & Experimentation tax credit by increased the credits awarded for R&D in strategic sectors to 15 percent, as well as increasing annual funding for the New Jersey Commission on Science, Innovation, and Technology.

NJBIA also recommends forming public-private partnerships with state government and venture capital funds, which would help invest in a new generation of early-stage companies that will grow and innovate in the state.

Another finding by the NJBIA shows that New York and Massachusetts are home to the most universities that are ranked in U.S. News and World Report's top 100 universities in 2022.

"Innovative companies often rely on individuals with advanced degrees to drive growth and development, making the supply of these graduates critical to a successful innovation ecosystem," NJBIA states.

According to the report, New Jersey is home to only three universities that fall in the top 100, and is trailed by Connecticut and Maryland who each have two.

New Jersey received 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, New Jersey ranks last in the region and country for its business climate.

While some progress has been made in the state, NJBIA argues that "there is still much work to be done if the Garden State intends to bypass regional competitors as a leading innovation hub in the northeast.