Business and Economic Development

Business is the production and trade of goods and services; Economic Development is the growth of business and the infrastructure that supports it.  This section covers issues related to the industries and sectors that operate in New Jersey, their growth, the infrastructure that supports it, and their role in the New Jersey economy.

National Rankings provide data on how New Jersey compares to other states on measures of Business.

State and Local Reports provide featured analysis of current Business data within New Jersey and its impact on the State’s economy.

 


National Rankings - compared to other states, New Jersey ranks...

8th Lowest Rate of Entrepreneurial Activity

April 8, 2014.  In 2013, New Jersey ranked near the bottom in the rate of entrepreneurship, according to the Ewing Marion Kauffman Foundation.  The rate of entrepreneurship is defined as the percentage of the non-business owning population that starts a new business each month.  Data come from the Census Bureau's Current Population Survey. Accoridng to this method, Montana was the most entrepreneurial state, and Iowa the least. 

10th in New State Economy Index

June 11, 2014.  In 2013, New Jersey's strong pharmaceutical industry and technology cluster around Princeton helped it keep a high ranking, although it was down from it's #4 ranking in 2013.   Produced by the Information Technology and Innovation Foundation, the New State Economy index includes 25 different indicators designed to measure the progressiveness and technological advancement of state economies.  Massachusetts led the index, as it has for many years.  Mississippi was last. 

 6th in Economic Output per Job

January 9, 2014.  In 2012, New Jersey workers produced an average of $86,362 in gross domestic output per job, using state output and jobs data from the US Bureau of Economic Analysis.  This is an approximate measure of productivity.  Ideally, we would measure output per hour worked, in order to account for the fact that many people work part-time. Unfortunately, data on hours worked, by state, are not available.  Also note that output per job should not be confused with salaries, because it includes profits, other returns, and the cost of intermediate inputs. 

8th in Size of Private Sector

January 15, 2014.  In 2012, New Jersey's private industries produced $452,301,000,000 in gross domestic output (current dollars), according to the U.S. Bureau of Economic Analysis.

9th in Value of Venture Capital Deals

October 9, 2013.  In 2012, 49 NJ companies received venture capital funding worth more than $429 million, according to the National Venture Capital Association.  Leading the list was California, accounting for more than half of all venture capital dollars in the nation.  

46th by CEOs as Best State for Business

May 6, 2013.   More than 500 CEOs considered a wide range of criteria, from taxation and regulation to workforce quality and living environment, in ChiefExecutive.net’s annual ranking of the best states for business. New Jersey dropped one place from 2012's 45th. 

6th as a Source for International Investment in 2012

September 11, 2013.  New Jersey ranked 6th among the states as a a provider of foreign direct investment (FDI) in other countries in 2012, according to the 2013 FDI Report from the Financial Times.  New Jersey did not rank in the top 15 states as a target for FDI from other countries in 2012.  This was a reversal from 2011, when the state ranked 13th and experieced a 53 percent in incoming FDI from 2010.  In 2012, FDI in the U.S. from other countries declined by 9.5%.       

49th in State Business Tax Climate

October 9, 2013.  According to the Tax Foundation, New Jersey had the second worst business tax climate in their 2014 State Business Tax Climate Index. New Jersey scores at the bottom by having the worst property tax, third-worst individual income tax, the fifth-worst sales tax, and the tenth-worst corporate tax. New York was the only state to score lower. Wyoming had the highest score.

4th Fastest Growth in Self-Employment

May 23, 2013.    Between 2005 and 2012, New Jersey experienced 14.4% growth in self-employment.  According to datacollected by the U.S. Chamber of Commerce, this was the 4th highest growth rate for self-employment in the nation and compared to 6.8% for states on average.

3rd in Total Solar Jobs

February 11, 2014. According to data from the Solar Foundation's 2013 National Solar Jobs Census, there are an estimated 6,500 solar jobs in New Jersey. This ranks the state No. 3rd for total solar jobs created, an increase of 800 jobs from 2012.  

25th in Subsidies for Industry

With $3.85 per $1,000 of state GDP, New Jersey ranks in the middle for subsdies received by business relative to output produced. 

• 24th in number of FDIC-Insured Financial Institutions

August, 2013.  With 110 FDIC-Insured Financial Institutions, New Jersey had the 24th largest number in 2012 according to the Proquest Statistical Abstract of the United States, 2013. Despite the total number of banks in the state declining, NJ actually moved up in the rankings due to ongoing consolidation in the banking sector.

47th in State Competitiveness Index

June 10, 2013.  According to the Beacon Hill Institute, only three states rank worse than New Jersey in competitiveness, based on a set of business indicators thast includes government and fiscal policy, security, infrastructure, human resources, technology, business incubation, openness, and environmental policy.  NJ ranked last in the fiscal policy index, which looks at taxes per capita relative to income, workers' compensation rates, state bond ratings, and payments to insured unemployed.  NJ ranked second on the openness index, which looks at exports per capita, foreign direct investment, and the percentage of population born abroad.

 


State and Local Reports

How Have Cuts to Public Sector Jobs Affected New Jersey's Economy?

New Jersey's recovery from the Great Recession has been slower than most states in the nation as a whole, reports Raymond Castro, Senior Policy Analyst at New Jersey Policy Perspective, and the gap between New Jersey's unemployment rate and the rates of other states and the US has grown as a result. Unlike the prior two recessions, public jobs were not restored in New Jersey after the 2007 recession, see graph below. 

Since the beginning of the recession, the number of state and local public-sector jobs has decreased by 20,800 as the result of layoffs and attrition. This represents, by far, the largest reduction in public jobs since the Department of Labor and Workforce Development began keeping records in 1990.

Read the full report

 

Additional Reports

 

Jon Whiten, New Jersey’s Subsidy Surge Has Not Subsided, NJ Policy Perspective, April 2013.

Mantell, Nancy, Joseph J. Seneca, Michael L. Lahr and Will Irving, The Economic and Fiscal Impacts of Hurricane Sandy in New Jersey, Rutgers Regional Report, Issue Paper 34, January 2013.

NJ Department of the Treasury, New Jersey Business Pulse Survey, New Jersey Economic Insights, monthly report.

Pew Center on the States, Still Risky: Safe Checking in New Jersey, State Fact Sheet, October 2012.

Nancy Mantell and Michael Lahr, New Jersey: The Recovery Sputters Along, Rutgers Economic Advisory Service, July 2012.

Deborah Howlett and Sarah Stecker, A Surge in Subsidies: Corporate tax breaks climb past $822 million, New Jersey Policy Perspective, April 2011.

Center for Responsible Lending, "The Cost of Bad Lending in New Jersey," August 2010.  

Gang, Ira N. Gang and Anne Morrison Piehl, “Destination, New Jersey: How Immigrants Benefit the State Economy,” Eagleton Institute, Rutgers University, December 2008.

 


Data from the NJ DataBank may be used with the following acknowledgement:

Source: NJ DataBank (http://njdatabank.newark.rutgers.edu), a project of the School of Public Affairs and Administration, Rutgers University-Campus at Newark