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State’s Key Economic Incentive Programs Foster High Tech Jobs

By The Honorable Bob Franks, President, HealthCare Institute of New Jersey

Hillside, NJ, May 24, 2005 —The life sciences have clearly become the leadership industry of New Jersey.  Our rank as the state with the most scientists and engineers per square mile has helped cement this status.  And, you merely need to look at the pharmaceutical, medical technology and bio-tech companies moving into New Jersey as evidence of our pre-eminent place in the life sciences. New Jersey is the global epicenter for research and development.

Despite this, however, other states “court” our pharmaceutical and medical technology companies with lucrative offers to move to their states almost daily.  They have sophisticated marketing tactics and come armed to the teeth with incentives. In many cases, they present offers almost too good to resist.  These states recognize, correctly, that the life sciences industry is competitive and that high technology jobs will keep our economy healthy and resilient into the future.

Recognizing this competitive environment, it’s important to highlight how one of the state’s key economic incentive programs has steered the location of additional life sciences companies and high tech jobs to New Jersey over the past decade.  Specifically, through the Business Employment Incentive Program (BEIP) and Business Retention and Relocation Assistance Grant (BRRAG) we have been able to retain and grow our life sciences industry in the state.  They are important features of our state’s economic development tool kit.

Introduced by Governor Whitman in 1996, BEIP and BRRAG have continued to flourish under the administrations of Governors McGreevey and Codey.

As governments in Europe and Japan impose barriers and disincentives onto life sciences companies, worldwide research and development activities keep moving to the United States.  Having BEIP and BRRAG in place has often been the deciding factor in companies deciding to locate those R&D activities in New Jersey.

Here are some recent examples which underscore New Jersey’s pivotal role in the life sciences industry:

  • In August, Novo Nordisk of Denmark will open its first ever research facility outside of that country, a hemostasis research facility at the Technology Centre of New Jersey in North Brunswick.
  • When German pharma company Altana decided to open a U.S. headquarters, Florham Park NJ was their choice.
  • Using a BRRAG grant, Pfizer has just undertaken a $600 million expansion of its consumer health headquarters in Morris Plains, including a recent groundbreaking for a new R&D building. They have already added over 200 jobs.
  • Novartis has added 250 new jobs at its North American headquarters in East Hanover.

While some have sought to describe these programs as “corporate welfare”, they should be seen for what they are: a sound investment in building a stronger New Jersey.  These programs return hundreds of millions of dollars to the state coffers and generate good-paying, high-quality jobs that have spin-off implications throughout the state’s economy. They have been enormously successful for New Jersey.

Over the past decade more than $163 million in BEIP and BRRAG grants has been disbursed to industries of all types, not just life sciences. They have been given to companies large and small.  They have created in excess of 50,000 new jobs. Two thirds of the grants have gone to small businesses; many are the kinds that work with our large life sciences companies.

Historically, the pharmaceutical and medical technology industry has been an excellent corporate citizen. As an example of how seriously we take that citizenship role, the members of the HealthCare Institute of NJ in 2003 contributed $155 million to philanthropic activities in our state.

In addition, during the first few months of this year through our Rx4NJ program, our companies have helped over 50,000 people in New Jersey who have needed assistance with their prescription drug costs. We would hardly call that an example of corporate welfare.

New Jersey will be offered more opportunities in the coming years to attract additional key players in the life sciences to our state.  BEIP AND BRRAG are the most important programs in our State’s economic “tool kit”.  Let’s make sure that New Jersey has every competitive advantage to remain the dominant force on the life sciences landscape.

Former New Jersey Congressman Bob Franks represented the 7th District of New Jersey from 1993-2001.  He was a member of the New Jersey General Assembly for 13 years before that.  For the past four years, he has served as the President of the HealthCare Institute of New Jersey, the Hillside-based trade group for the pharmaceutical and medical technology industry.