With the long-awaited announcement of Amazon’s intentions to build two major new campuses in Queens and Northern Virginia, I wanted to offer some initial observations for what this means for New Jersey’s economy.
We won’t know the full impact of the new campuses or the process of selecting them for many years, but a few things already are clear:
Newark is on the national map in a big way: Whatever stage of comeback we thought Newark was at in September 2017, when the HQ2 process began, it’s inarguable that the Brick City took several quantum leaps forward in its national perception as a top destination for major companies. With 238 proposals received, 218 were dismissed early on in the process; Newark made it to the finals — this would have been difficult to imagine just five or 10 years ago. No doubt, other companies will take notice and want to be a part of the Newark story.
The process itself was good for Newark: The work that went into Newark’s proposal and pitch process will pay dividends for years to come. And the collaboration that was on display throughout this process at the local, county, state and federal government levels, along with the private sector and labor, was something unique. When Amazon visited Newark in the spring, Gov. Phil Murphy, U.S. Sen. Cory Booker and Mayor Ras Baraka made an incredibly compelling case for the city and a strong demonstration of what productive partnerships look like. We will see that play run again.
The process was good for all of New Jersey: Many cities and counties threw their hats in the ring along with Newark — and, in the process of doing so, honed their own pitches, inventoried their key assets and, importantly, identified areas for investment and improvement for when the next big pitch opportunity comes along.
The nexus of higher education and economic development: If you wanted to make the case for Long Island City, New York, at the top of the list would be its proximity to the Cornell-Technion applied sciences campus that former Mayor Michael Bloomberg spearheaded. And, in Alexandria, Virginia, plans call for the creation of a new 1 million square foot Virginia Tech Innovation Campus, part of a statewide commitment to double the number of grads in computer science and related fields.
The nexus between higher education and economic development continues to grow stronger in the best-performing economies, which is why Gov. Murphy has been so focused on enhancing that connectivity here in New Jersey. The proposed Hub project in New Brunswick will bring together Rutgers, Princeton, corporate partners, incubator and collaborative workspace and, potentially, foreign research universities to bring about the kind of commercialization and innovation our economy needs more of to compete.
The Hub is just one example of the kind of academic/corporate collaborations that Gov. Murphy’s economic development vision plans to foster throughout the state in partnership with our strong crop of higher education institutions.
Amazon is part of a broader urban trend: More and more of the most successful companies (but not all) are making the decision to locate in thriving, vibrant, walkable, transit-rich cities and downtowns. That’s why Gov. Murphy’s plan for a “Stronger and Fairer Economy” proposes major investments both in infrastructure as well as in strengthening our cities’ and downtowns’ ability to attract people and investment.
From a revamped brownfields revitalization program to a new historic tax credit to a major gap-financing tool to bring new development to urban areas and suburbs served by mass transit, Gov. Murphy’s economic development plan will position New Jersey to be even more attractive to both homegrown and global companies. We will also continue to help our suburban communities reposition legacy corporate assets as new engines for the innovation economy via the Economic Development Authority‘s 21st Century Redevelopment challenge.
Incentives are important, but rarely the main driver of big strategic decisions: We now know that incentives offered by New York state and city and Northern Virginia are far less than those offered by New Jersey, Maryland and many other states and cities. As Gov. Murphy said from the campaign through the early days of his administration, incentives must be a tool in service of a broader strategy, not a strategy unto themselves.
Gov. Murphy’s economic development strategic plan calls for a new approach to incentives and economic development, one that recognizes the important role that incentives play, but that also approaches economic development comprehensively through parallel investments in people, communities and infrastructure.
We can do well and do good: In the last several years, New York City and New York state enacted paid sick leave, paid family leave and one of the highest minimum wages in the country. We can do well and do good at the same time.
This is good for the region and therefore good for New Jersey: As disappointing as the ultimate outcome of the HQ2 process may be for Newark and New Jersey right now, we should keep in mind that we are part of two major metropolitan areas centered around New York City and Philadelphia.
New Jersey is stronger when our region is stronger, and we will reap more benefits (a stronger regional tech cluster and talent pool, for example) from Amazon choosing NYC than, say, Denver or Columbus, Ohio.
And if it doesn’t work out in Queens for whatever reason, Amazon, it’s less than a 30-minute train ride from Manhattan to downtown Newark.
Tim Sullivan is the CEO of the New Jersey Economic Development Authority.