Drawing on economic data and insights from business leaders, a consulting firm is suggesting ways New Jersey can improve its economy.
Steve van Kuiken is a senior partner at McKinsey and Company. He said helping high-growth biotech, cybersecurity, and warehousing and distribution businesses navigate regulations and increase their access to capital will help turbo-charge the state’s economic growth.
“Net job creation is being driven by these young companies. We need more companies that are 500 employees going to 2000. We also think that can be a key element of stemming the outflow of millennials from the state by creating opportunities to work in these new young and growing businesses,” he said.
New Jersey has a large supply of high and low skill workers but Van Kuiken said the state lacks middle skill workers and employers can help by working with educators.
“Industry needs to work with the education system to inform standards and curricula and certificates. There’s interesting examples where other states have encouraged employers to upscale their workers and even build incentives around that.”
Van Kuiken said encouraging transit-oriented infrastructure development is a key element to driving economic growth.
“Some of those things could require more investment like shifting more transportation to rail in the future and upgrading rail capability. Some of those things don’t require a bunch of investment like better commuter information and monitoring. Essentially this is about reducing the frustration that we all feel on the roads.”
Van Kuiken said optimizing the impact of the potential changes could put the state on the path to adding 250-thousand jobs and growing the economy by $150 billion over the next decade.
From the report Reseeding the Garden State’s economic growth: A vision for New Jersey (pdf)
Four factors have been limiting the dynamism of New Jersey’s economy, depressing growth:
The state has relatively few young companies that have grown into major employers.
Aging transportation infrastructure exacts a toll on productivity and high maintenance costs divert public funds from other uses.
There is a growing shortage of middle-skill workers (those with some post-secondary education but without a four-year college degree) with the training for new jobs in areas such as health care.
Other states get higher returns on economic incentives for businesses, partly because they focus more on young, high-growth companies. New Jersey’s economic incentives have focused more on retaining jobs.