Manufacturing, STEM, logistics are keys to growing our economy

By John Kennedy, CEO, NJMEP
Cedar Knolls | Aug 30, 2018 at 11:00 am
Op-Ed

I am a “Jersey Boy.” I was born and bred here and still live in same town, Madison, that I grew up in. I’m proud of my home state. I am not one for the self-bashing many of our fellow citizens fall back on way too much. I am an hour from the Shore, the mountains, New York City, Philadelphia and it’s a couple more to Washington, D.C. No other state has it better. And our rankings in areas such as public education, home value and per capita income are all positive, as well.

However, the one that we never seem to be able to avoid is our “Worst States for Business” rating, which rarely less than 49th or 50th … and never out of the bottom five. This is not a good thing, but, oddly enough, I believe that many in the Garden State see this as some type of “badge of honor,” or evidence that it makes us more “people friendly.” That is not an asset on any level. It seems that we all forget that government has no source of income outside of the taxes and fees it charges its citizens and businesses. Without these, there are no funds available to cover the cost of education, police, fire, roads/bridges and other government services. 

The answer cannot always be to increase the demand on others, as they will “vote with their feet” and move away. Let’s think what other recent list we top … outmigration of businesses and young people. That is our future … leaving.

About a decade ago, several other states, including Massachusetts (similar to us on all fronts, save for the Boston Red Sox), had fallen on difficult times and decided to invest in industry using education and innovation as the tool. If you look solely at Massachusetts and its amazing growth in life sciences alone, you’ll see that a significant part of that advancement came from (formerly) New Jersey companies. Then look at our annual budget battles here, and it remains status quo. We seem to forget that healthy businesses hire and support citizens, and, together, they cover our in-state costs. When they grow, we all benefit. 

Yet, if you pick any administration over the past 20 years, the burden continues to always fall upon industry, and governors continue to act as if some of them do not even exist. While it is still too early in what will happen with Gov. Phil Murphy’s team, the initial budget was not one that was viewed optimistically from businesses of all types and sizes. I remain hopeful that more positive changes are forthcoming.

That brings me to my sector: manufacturing.

When I tell people that we have 11,130 manufacturing firms (yes, food and life sciences included) and that they directly employ 378,420 New Jerseyans, they are stunned. If you add in the other sectors, like STEM support and transportation, logistics and distribution/supply chain, that number grows to more than 1.1 million people. They average over $90,000 per year, and this industry supplies more benefits, including health care, than any other.

If you’re counting: This equates to more than $100 billion in annual income for the state — compared with $33 million for tourism.

Despite this, administrations have had a consistent plan toward manufacturing: Ignore it. Treat manufacturers like an adversary, with more regulations, higher taxes and fees, and then expect the sector to step up and not leave the state for better business climates. 

How has that worked so far?

In regard to manufacturing, some have worked very hard to change the paradigms, including the New Jersey Manufacturing Extension Program, New Jersey Business & Industry Association, HealthCare Institute of New Jersey, Commerce and Industry Association of New Jersey and others. We’ve had limited success, but we do see some possible relief in the year-old Legislative Manufacturing Caucus and the newly formed New Jersey Manufacturing Policy Academy Team.

The rebirth of the Committee for Science, Technology and Innovation is awesome, but will there be enough funding to make it of real value? Will members look to our entire manufacturing sector for input? Keep in mind that 75 percent of all private research and development is performed through manufacturers — big and small.

The proof, however, is in the results. And very little has come forth, as yet. The fact is that we invest very little in this critical sector, and then are stunned when places such as Massachusetts or North Carolina “steal our lunch money.” Being reactionary is being too late.

So … when do we learn, New Jersey?   

Sorry for the cynicism, but I’m not sure we ever do in the “habitual” climate. However, if the manufacturing/STEM/TLD industries could ever work together, their 1.1 million votes would change the landscape and make a transformation that improves the situation, so we can provide individual and corporate growth that includes career pathways. That would allow our younger generations to find the reason to stay.

My mom and dad always told me to never forget to vote, and never choose the lesser of two evils, but to vote for positive change.

If our great state won’t change, my favored industry can. It is time.

John Kennedy is CEO of the New Jersey Manufacturing Extension Program.

ROI-NJ Staff | editorial@roi-nj.com | @ROINJNews