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NJ’s Tech Future Begins with New Brunswick ‘Hub’ — Murphy

Governor’s plan for economic development begins with creation of a center for innovation and technology to help small businesses and startups

Murphy Hub
Gov. Phil Murphy, center, introduces his vision for an "innovation hub" in New Brunswick.

Gov. Phil Murphy has sketched out a vision for a New Jersey economic rebirth that’s centered around innovation and technology, and yesterday the governor highlighted how a four-acre site near the main train station in New Brunswick could eventually play a key role in that effort.

Saying he wants to see an “innovation hub” take root in New Brunswick that could foster the development of startup companies tied to cutting-edge research, Murphy convened a meeting with local leaders, officials from Rutgers University, and nearby businesses, to set an agenda for his goal of redeveloping the site as part of his broader economic-development dream.

“This is a very significant opportunity,” Murphy said during the meeting held on the Rutgers University campus. “We’re not playing at the edges here.”

The site that Murphy has his eyes on in New Brunswick is owned by the city, and it has been targeted for redevelopment for several years. The governor and other officials said the proposed innovation hub is in the earliest stages of planning, with some environmental remediation still required. Also left unclear is how exactly the hub would be funded, and what, if any, financial role the state could play in the funding.

City and state

Representatives from the city’s redevelopment agency and the state Economic Development Authority said as yesterday’s meeting came to a close that they would be working together to move ahead on the governor’s vision for the location, with a likelihood that many other partners would become involved. Murphy’s plans for the site also won an immediate endorsement from New Brunswick’s mayor, Rutgers’ leaders, and a key state lawmaker, Assembly Speaker Craig Coughlin (D-Middlesex).

During his successful run for governor last year, Murphy stressed the need to improve a state economy that has generally been lagging the national pace of growth and that of many surrounding states since the end of the Great Recession. Murphy also frequently pointed to a report issued last year by the global-consulting firm McKinsey & Co. that highlighted the successes of some other states in fostering the growth of startup companies by using small-business incubators and accelerators.

By contrast, during former Gov. Chris Christie’s tenure, New Jersey pursued an economic-development strategy that emphasized the awarding of tax incentives to established companies to lure or keep them in the Garden State. In fact, McKinsey determined that more than 80 percent of the state's tax incentives were awarded to older companies — even though younger, growing businesses tend to create more jobs. The firm's analysis also found that New Jersey was spending roughly $174,000 for each job that was created or retained by one of the older firms, but $110,000 for every job in companies that are younger than 10 years.

Since taking office in January, Murphy has attempted to lead the state in a new direction, including by ordering a full-scale audit of the tax-incentive programs. He’s also picked a new leader for the state Economic Development Authority, Bergen County native Tim Sullivan. And he’s named 12 people to serve on a gubernatorial jobs panel that is modeled on the federal government’s Council of Economic Advisers.

Big-time redevelopment

But yesterday Murphy highlighted a specific redevelopment opportunity, and he brought together leaders from government, higher education, and the private sector to discuss bringing to life his vision for a major innovation hub in New Brunswick. The four-acre site is located in the center of New Brunswick in an area that has already been undergoing significant redevelopment in recent years, led by the efforts of New Brunswick’s Development Corporation. Since its inception in the 1970s, the city Development Corp. (DevCo) has attracted an estimated $2 billion in investment to the city, which is also anchored by Rutgers, Johnson & Johnson, and Robert Wood Johnson-Barnabas Health.

The innovation hub would cover two to four-million square feet in a multilevel facility that would have direct pedestrian access to the train station and the nearby university facilities. It would be able to generate both construction and permanent jobs, though no estimates were shared with reporters yesterday.

Murphy said other states, like neighboring New York, are well ahead of New Jersey when it comes to using incubators to encourage the growth of small businesses and startups. New Jersey has just 15 such sites within its borders compared to New York’s 179, he said.

“That balance does not make sense,” Murphy said. “Things like this innovation hub will go right to the heart of moving that needle, aggressively.”

Rutgers onboard

State lawmakers have also become involved recently in the effort to generate more startups in New Jersey, advancing legislation that would provide state dollars to match a research institution’s investment in an incubator or accelerator.

New Brunswick Mayor James Cahill said city officials are “fully onboard” with the vision Murphy laid out for the innovation hub. Rutgers University president Robert Barchi said the college’s master plan already calls for an innovation center. And Barry Ostrowsky, the president and chief executive of RWJ-Barnabas Health, said his organization would also be “all in.”

“This couldn’t be more timely,” Ostrowsky said.

While not directly in his legislative district, the innovation hub’s proposed site is in the home county of Coughlin, the Assembly leader, who also participated in yesterday’s meeting. Coughlin said the initiative fits in well with recent legislative efforts, including the seating of a new Science, Innovation and Technology Committee in the Assembly.

“I think it’s going to be a wonderful economic driver in the continued redevelopment of New Brunswick, which just has a tremendous history of reinvesting itself and moving forward,” Couglin said.

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