New Jersey Economic Development Authority is rolling out a pair of incentives aimed at spurring growth in the so-called innovation economy.
Gov. Phil Murphy announced the moves in remarks at the Princeton Innovation Center BioLabs on Wednesday.
The first involves a program in which the EDA will subsidize two to six months of rent. The other incentives represents a revamp of the state’s research and development tax credit.
“Both of these initiatives will allow us to take full advantage of all New Jersey has to offer entrepreneurs and startups as well as our established innovation-driven companies,” Murphy said. “We have everything right here at our fingertips to dominate the innovation economy.”
Under the rent-relief program, dubbed the Incubator and Collaborative Workspace Rent Initiative, the EDA will subsidize a startup’s rent at an incubator, accelerator or other collaborative workspace.
“This in total will allow entrepreneurs to commit their limited capital to things like talent acquisition or product development,” Murphy said.
In New Jersey, there are currently 29 incubators, seven accelerators and 31 co-working facilities, which could likely expand under the new programs.
The rent-relief program will start with an initial $500,000 investment, with a maximum of $15,000 in aid per applicant.They would be eligible for bonus assistance if the collaborative workspace is newly opened, established in one of the state’s 169 Opportunity Zones, or affiliated with a hospital system or New Jersey university.
The revamped R&D tax credit comes via the first major change in the program since 1992. Murphy said it will allow the state to diversify its recipients.
‘While many positive changes have been made to the federal R&D tax credit over the past 26 years, NJ’s program has stayed within its original 1992 criteria,” Murphy said. “This means innovative companies here have been missing out on new eligible research categories, new calculation methods, and even larger available credits. This also means that we’ve been at a competitive disadvantage with our competitor states, which have already modernized their credit programs.”
In the previous fiscal year, New Jersey doled out $80 million in R&D tax credits to 200 recipients, mainly in the pharmaceutical, telecommunications and advanced technology industries.
State Treasurer Elizabeth Maher Muoio said the newly updated R&D tax credit is key to the state’s economic growth, and its place as the “medicine chest of the world.”
“Increasing competition, both domestically and abroad, has threatened that distinction and demanded we do more to spur economic growth,” Muoio said. “The modernized R&D tax credit established in this year’s budget will help us attract and retain innovators, spur long-term job growth and stimulate sustainable revenue while sending a message that New Jersey is committed to remaining a global leader in innovation.”