Making the Grade: NJ Technology Council

Mercer Business, Mar 01, 2006 by Roberts, Russell

The grades are in for the state of New Jersey's first evaluation by the New Jersey Technology Council (NJTC), and it's a good news/bad news type of scenario. While the state doesn't have to sit in the corner with a dunce cap on, it also cannot rest on its laurels either and assume that it's always going to post high marks.

"We're on shaky ground," warned Maxine Ballen, President and CEO of NJTC.

Just the Facts

The Mount Laurel-based NJTC was founded in 1996 to provide business support, networking opportunities, information, advocacy, and recognition of technology companies and their leaders. Currently the council contains more than 1200 member companies, including Verizon, Princeton University, and PSE&G. The members work together to support their own enterprises as well as to advance New Jersey's status as a leading technology center in the United States.

The NJTC attempts to bridge the gap between government and the community, and by doing so assisting in shaping the future of New Jersey. The council believes that active participation in the political process yields the best form of government.

"Democracy is not a spectator sport," Ballen noted. "Get off the sidelines and get in the game."

The NJTC's technologies industry report card was an attempt to see how New Jersey stacked up against many of its neighboring states as far as the general technology business environment. The perception was that New Jersey was doing well in that area, and was a high-tech leader, but the council wanted to put the information down in black and white rather than rely on supposition and heresay. In effect, the council was taking a page out of Jack Webb's book, and asking for just the facts.

"We needed to quantify what we thought we knew," said Ballen.

The final report card report had many participants, including the NJTC, the New Jersey Department of Commerce, the New Jersey Commission on Science ,and Technology, Rutgers University, and PricewaterhouseCoopers. The states that the report card used as a comparison were Massachusetts, New York, North Carolina, Pennsylvania and Virginia. The research and comparative analysis in the report was based on numerous high-tech industries, including information technology, life sciences, telecom, energy, and environmental technology. The data utilized spanned a five-year period, from 1998-2003.

So, based on all that, how was New Jersey's technology ranking?

As good as most states surveyed and better than some, according to the report card; in general, New Jersey and high-tech are "perfect together," to borrow an old advertising slogan. But, the survey also found that the state faces critical challenges that, if mishandled or fumbled, could choke off the momentum of technology growth. To continue the football analogy, the state is currently facing second-and-short. A few wrong moves, however, and it could very easily be staring at thirdand-long.

"This is an important time for technology in New Jersey," said Ballen.

The Good

First of all, the good news:

The economy is strong, thanks in no small part to the state's dense concentration of technology firms. New Jersey has the highest concentration of technology companies among its peers, and that has helped lead the state to the top ranking both in the creation of new jobs and in per capita income. New Jersey's employment base is growing at twice the national average.

New Jersey is a leader in productivity, which is a source of a state's competitive environment and an engine of long term growth in its economy. The state's economy is among the most productive. It ranks first in productivity for technology companies, and second in overall industry productivity.

The state's fertile technology environment and robust technology economy is creating job opportunities for two important technology professions: scientists and engineers. This has helped New Jersey fashion a workforce that is among the most skilled and welleducated in the nation. Another factor in its excellent workforce is the state's high quality k-12 public school infrastructure.

New Jersey provides numerous opportunities for venture capitalists - a necessary ingredient to backing firms that are engaged in new or experimental technologies. The state is first in net growth of venture capital deals and total dollars invested in high tech businesses. (Because of the global nature and selectivity of capital markets, investment capital flows are a good indicator of a state's current economic potential.)

New Jersey offers a high standard of living. The report found that the state is competitive with others in terms of the livability of many of its cities and the quality of its primary education system. This has aided the state's technology economy benefit from a steady migration of skilled workers from abroad.

So that's the good news, and there's plenty of it. As Ballen noted, much of that was already known, or at least suspected. "The general reaction [to the report card's good news] was 'I'm not surprised,' " she said. But, as she added, the good news should be taken with a grain of salt, because there are warning signs on the horizon. As the report stated, "New Jersey's technology economy is showing some signs of fatigue."