With the success of the VOICE Summit — nearly 3,000 attendees in one day versus an anticipated 1,500 — in Newark, and the recent buzz around Propelify in Hoboken, the state appears ripe to push an innovation agenda.
It’s why New Jersey Innovation Institute President Donald Sebastian is bullish on New Jersey’s ability to grow an innovation economy.
He knows, however, it’s not as easy as it sounds.
For starters, Sebastian said, it comes down to more than just letting the state become a “tech hub.”
“You can’t just say, ‘I want to be a tech hub,’” he said. “What does that mean?
“So, you have 10 companies and they all do something different — and then you don’t have economies of scale.”
Sebastian said it is much easier to allow innovative clusters to grow organically, because the rate of change in industries is lightning speed compared to the past.
He points to the growth of Silicon Valley.
The transistor was invented in Bell Labs in New Jersey before it was moved to Mountain View, California. That was more than 20 years before the personal computer market was born, which paved the way for organic growth of what is known as Silicon Valley today.
In addition, since industries are pivoting to, and paying attention to, the disruptors and innovators and idea-givers, Sebastian said it’s become easier to create bonds.
“We bring together entrepreneurs in a particular technology area, we also foster and grow them, and connect them to big companies if they are interested and will buy things they are developing,” he said.
JLABS, Sebastian said, concentrates companies in a particular health care area. Maybe one out of 10 might be useful.
Pharmaceutical companies can operate in that high-risk manner because of their experience with internal research and development.
It’s not easy, however.
“It becomes cost-prohibitive,” he said. “That’s why our drugs cost so much, because you have to pay for all the failures.
“So, if we can reduce the risk by bringing big companies in at an earlier stage, not only might they find a product they want to buy, but maybe they will find people they want to work with. That’s part of our technique.
“So, what you’ve created is a virtualized R&D. You’re not paying for that company for all of their stuff for the rest of their life, you’re engaging with them in a mutually beneficial way which may end up as an acquisition, it may end up as a long-term trading partnership, it may bring the company to IPO status — there are lots of different exit strategies.
“But it’s creating technology bond and flow that’s more efficient than searching the World Wide Web to see is there a patent out there that’s useful or a company that I can invest in and so no.”
And with Gov. Phil Murphy eager to push an innovation agenda, it should be easier to make moves, right?
Not quite, Sebastain said.
“Everyone wants it,” he said. “He’s not the only governor in the country that says he wants innovation. Massachusetts is a decade ahead of us.”
And it grew with different cities being homes to different clusters. Which is what Sebastian sees as the key to New Jersey doing it right.
“Most people know it when they see it, but they don’t know how to make it happen,” he said. “We like to think we have a strategy and approach by which we can make innovative hubs across … the state.
“It’s not just the smart city and Newark, there are other places in the state where we’ve got our finger on the scale. We’re working with the communities and local people to, in some cases, grow the theme they have, and in some cases help them find a theme. We believe in themes.”
And there shouldn’t be a fight over where the central hub of innovation should be.
“Let’s start to make clusters and see what grows,” Sebastian said. “We have a fertile enough state to grow more than one focus. We can be a tech state, and we’ll be a tech state that has identifiable goals.”
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