Retooling and Reviving New Jersey’s Manufacturing Heritage

Manufacturing is a $40 billion industry sector, but a bipartisan ‘manufacturing caucus’ wants to take it higher

Donald Sebastian, president and CEO of the New Jersey Institute of Technology's Innovation Institute, addresses members of the state Legislature's manufacturing caucus yesterday.
From robotics and automation to biotech and chemical engineering, a group of state lawmakers in the midst of evaluating New Jersey policies related to the manufacturing industry got a crash course yesterday on how technology is reshaping a sector that used to dominate the state’s economy.

The members of the Legislature’s new “manufacturing caucus” met for several hours in Paterson — a birthplace of U.S. manufacturing centuries ago — taking testimony from industry leaders on a range of topics that included how the state currently regulates and taxes the more than 10,000 manufacturers who still call New Jersey home.

The bipartisan panel also heard about how New Jersey’s public schools and colleges are training students for careers in the manufacturing industry, and how they could do a better job of matching up the curriculum with the technologies that companies are currently using to assemble products across the state.

Getting ready for the renaissance

The goal of the new caucus, according to legislative leaders, is to ultimately redraft state policies so New Jersey can more effectively foster growth in the manufacturing sector. The lawmakers are also looking to put the state in prime position to take advantage of an expected renaissance that’s coming as the industry becomes more and more connected to new technology instead of cheap overseas labor.

“When times are changing it creates opportunity,” said Donald Sebastian, president and chief executive of New Jersey Institute of Technology’s Innovation Institute. “When there’s a whole new world, there’s new opportunities.”

At one point during the past century, half of the state’s jobs were in manufacturing, as industries like textiles and telecommunications boomed. And though there’s been a decline since then, manufacturing is still a $40 billion industry in New Jersey, with more than 10,000 companies employing an estimated 360,000 people.

Productivity in manufacturing in New Jersey has also grown by nearly 4 percent annually in recent years, about 2.5 percentage points higher than nonmanufacturing growth, and more than 70 percent of the state’s manufacturers said in a recent survey that they are on the hunt for new employees, according to information gathered by the New Jersey Business & Industry Association. That suggests there’s still room for more growth, even as some other industries have continued to struggle since the end of the Great Recession.

‘Pathway to a better life’

John Kennedy, chief executive officer of the New Jersey Manufacturing Extension Program, urged the lawmakers to do more to help create “pathways” into manufacturing jobs for students who may not want to go to a four-year liberal arts college or have the means to do so. The industry’s average annual compensation is more than $90,000, Kennedy said, well above the state’s median household income.

“Pathways are important,” Kennedy said. “I believe this industry … is a pathway to a better life.”

One way that students can learn some of the skills that are in demand among the state’s manufacturing companies is by going to one of the vocational-technical high schools that are now located in all 21 counties in New Jersey. But right now, there are more applicants for those high schools than there is available space.

Last year, the county vocational-technical high schools were forced to turn away more than two students for every one that was enrolled in a vocational-technical program, Judy Savage, executive director of the New Jersey Council of County Vocational-Technical Schools, told the lawmakers yesterday.

Savage’s organization is conducting a statewide needs-assessment because legislative leaders are already talking about floating a new state bond issue to help pay for more vocational-technical learning space and equipment.

“The time is right,” Savage said. “We are extremely excited about the prospects of this (proposed) bond act.”

The vo-tech ‘stigma’

But she also said more could be done to address the notion that a college-prep education at a traditional high school is superior to pursuing vocational-technical training.

“Truth be told, there is still a stigma,” she said.

Sebastian, the leader of the NJIT Innovation Institute, said there are lessons that lawmakers can learn from New Jersey’s manufacturing history, which included businesses like Roebling Steel and Thomas Edison’s Lamp Company. Just as those and other manufacturing businesses flourished because of New Jersey’s prime geographic location and its access to skilled labor and centers of research, so can modern manufacturing companies.

But Sebastian suggested it will require taking a closer look at a number of areas, including tax policy, regulation, education, and transportation infrastructure, and then making changes where necessary. He also said biotech and manufacturing that is tied to emerging Internet-based technologies are two areas where New Jersey could eventually become a national leader.

“There’s an opportunity to come in at the top of the curve,” Sebastian said.

The panel’s next meeting is scheduled to be held next month, and state Sen. Robert Gordon, who is chairing the manufacturing caucus, said he’s hoping the lawmakers can ultimately come up with a package of bills geared toward improving the state’s overall business climate for manufacturers later this year. The state may also have to revise its economic-development tax-incentive programs to give more emphasis to startups and the smaller companies that make up the state’s manufacturing industry, Gordon said.

He also praised the lawmakers who participated in yesterday’s session for adopting a bipartisan approach, even as they are in the midst of an election year, with all 120 seats in the Assembly and Senate on the November ballot.

“The people here, I believe, are all very policy oriented,” said Gordon (D-Bergen). “(They) are more interested in solving the problem than scoring political points.”

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