NJEDA CEO talks continued ‘wins’ toward NJ’s innovation goals

NJEDA CEO talks continued 'wins' toward NJ's innovation goals

The New Jersey Economic Development Authority spent 2023 trying to move forward on a wide range programs and initiatives. That is a trend that CEO Tim Sullivan, who recently spoke with NJBIZ, hopes to continue in 2024. “It was a really busy and active year for the EDA – continuing to focus on Gov. [Phil] Murphy’s core strategies around economic diversification, small business, innovation, economic inclusion, and all of the things that accompany that,” Sullivan said, citing efforts across a number of sectors. “Lots of wins – big and small.” There have been multiple examples of wins on the innovation front – like the recent announcement of the inaugural cohort under the New Jersey Innovation Fellows program, which supports early-stage business ventures – and a series of major revelations centered on artificial intelligence. During his State of the State Address earlier this month, the governor announced a new AI Moonshot aimed at making New Jersey a leader in the emerging sector. That followed the establishment in December of an AI hub as part of a collaboration between Princeton University and the NJEDA. Earlier this month, Sullivan announced that the initial development of the Princeton AI hub will be supported with $250,000 in planning funds from the NJEDA’s Strategic Innovation Center initiative. “I think the governor is correct to be as focused as he is on generative AI – as kind of the next big thing and probably the next several big things all wrapped up in one,” Sullivan explained. “I think you heard in the State of the State the analogy of the internet in the early 90s. I think that’s right. Similarly, there is a degree to which a lot of people roll their eyes when they talk about AI – because it’s just like the latest hot topic. And I don’t think that’s true. I think it’s more like the internet in the 90s – where it is going to have very, very specific but also widespread ramifications for everything. Because it means a lot for the tech industry and the tech sector itself – it will be an important sort of piston in the engine of the tech sector.” But just as important, Sullivan said AI is going to have a big impact on some of the industries that the Garden State is strongest in, such as life sciences drug discovery and research into chronic or fatal diseases. “The impact that generative AI will have is extraordinary – and it’s almost limitless what that could mean for New Jersey,” Sullivan stressed. “Clearly, Silicon Valley has a leadership position in AI. But there’s a very clear rationale for New Jersey to have a top two or three-type positioning right behind there – given our location, our talent, our heritage in innovation.” He also noted that with a topic like AI – where the exact roadmap to the future is uncertain and evolving in real-time – it is critical to have the capacity for innovation. “December was an extraordinary month for Gov. Murphy – making two announcements back-to-back, one week apart. One was the Princeton announcement that we mentioned. The other was Bell Labs recommitting to New Jersey, doubling down, and moving to New Brunswick. Those two things – at the north and south end of the traditional Route 1 Innovation Corridor – and then keep going, and you’re in Newark where HAX and others are writing an extraordinary innovation story as well – I think really speaks to that inherent capability around innovation. Not just in AI, but broadly in technology and harnessing innovation for job creation purposes.” Having an institution like Princeton and its reputation, prestige and heritage gives the state’s AI efforts instant credibility and vast potential, Sullivan pointed out. “For them to engage this deeply and this directly in the real economy in something as transformative as AI, can really position New Jersey to be a global leader here,” said Sullivan. “The same role that Stanford played in the development of the internet industry. You can imagine Princeton playing a similar role in the germination and flowering of AI. “I think you have to give [Princeton] President Chris Eisgruber a tremendous amount of credit for stepping up and partnering with the governor,” Sullivan added. “This is an initiative at that level of importance and significance – both to the State of New Jersey and to Princeton University.” Sullivan thanked Eisgruber and the governor for having the vision and some moxie in how they approached this emerging sector. “And standing up and trying to forecast the future – and make a big play for it,” he said. The conversation moved to broader innovation economy efforts as the state seeks to attract more startup companies and re-establish its role as an innovation leader. “I think, particularly, the Bells Labs and HELIX story – and the fact that those two things are coming together – really speaks to the quality and the integrity of Gov. Murphy’s vision for this ambition to recapture our leadership position in innovation and entrepreneurship,” Sullivan explained. “I think if you closed your eyes five, six, seven, 10 years ago and said – ‘what does New Jersey need to do that?’ You’d say big institutions partnering together – whether academic institutions, medical institutions – having the kinds of space that you need to catalyze a new generation of startups that are going to grow and scale into big companies. You’d want to see more venture capital coming together. And you’d love it if somebody like Bell Labs would do something interesting. Fast forward – you’re having exactly that playbook come together in New Brunswick. And not just with somebody like Bell Labs – but with Bell Labs.” In addition to the announcements that generate headlines, Sullivan also stressed that there are a number of programs and initiatives in this space that do not receive the same attention but are contributing to the constellation of different resources and efforts they are trying to build – and broadening the ecosystem. He pointed to the Black and Latino Seed Fund and the clean energy space. “The seeds that are being planted for the next couple decades of economic growth,” Sullivan continued. “It’s rewarding to see the beginning, beginning green shoots of that strategy. But, man, the future is really bright.” The conversation moved to the offshore wind sector – a key area of the administration’s clean energy and economic strategy, which suffered a major setback last year when Ørsted pulled out of its two planned offshore wind farms in New Jersey, Ocean Wind 1 & 2. Despite that development and changing economics that altered the structure and feasibility of some pre-pandemic-planned projects, the administration pledged to move forward with efforts to make New Jersey an offshore wind leader. Sullivan reiterated that the message remains the same. While officials were extremely displeased with how the Ørsted situation unfolded, they remain optimistic and bullish on New Jersey offshore wind. “BPU [New Jersey Board of Public Utilities] will sometime relatively soon make announcements for the next crop of projects that are going to be awarded in the N.J.-three solicitation. The governor announced right before the holidays that he’s directed a fourth solicitation in 2024,” said Sullivan. “It’s important – and I think the last two months of history have proven this out. We talked a lot in early November about the notion that Ørsted’s projects were part of a generation of projects that were conceived before the pandemic, before supply chain changes, interest rates.” He pointed to some of the hiccups and setbacks in such projects up and down the East Coast. “All of which has led to a reset and a bit of a reboot from the pandemic era,” said Sullivan. “These new projects are going to be much more resilient and stronger. You’re seeing a tremendous uptick in activity and interest in offshore wind. So that bodes really well for New Jersey. The Wind Port – we are going to finish construction of phase one this year. That will be a milestone moment. We hoped to have Ørsted making use of it right away, but that won’t be happening unfortunately. But that project is an absolute category killer from a green infrastructure perspective. It is the only – and therefore best – purpose-built Wind Port in America. And so as long as there is an American offshore wind industry, that’s going to be a crown jewel in the infrastructure makeup – for decades.” The discussion shifted to some other areas – such as small businesses, Main Street, office buildings, manufacturing, and the post-pandemic aftermath and/or recoveries – before closing out talking about the investment landscape, especially as the state tries to attract more businesses and entrepreneurs. And of course, in a period of much uncertainty with elevated interest rates and global and political turmoil, including a major election in the U.S. later this year. “There were a lot of projects, a lot of situations – where in the last nine months or so, everybody kind of put things on pause, on ice,” Sullivan explained. “Particularly as they were waiting for the Fed to finally stop raising interest rates. We seem to have found – I suppose the top – but really the bottom, if you will, on rates. And the chairman said they’re going to come down a couple times this year. That’s good news. The fear in a lot of folks was not that the absolute rate was so high – it’s is it going to be seven-and-a-half next time you open the newspaper? Is it nine-and-a-half next time you open the newspaper? Having some predictability and stability there – is going to relieve a lot of headaches for folks who are trying to finance big projects. “You will likely see momentum continue to pick up – maybe not immediately in the first quarter,” Sullivan said. “But certainly, into the spring and summer.”