Joel Bloom, president of New Jersey Institute of Technology (NJIT), was invited to testify in a joint hearing of the Senate Economic Growth Committee and Assembly Commerce and Economic Development Committee on March 8, 2019. The joint hearing brought educational institutions, industry leaders and policy research organizations to answer questions and discuss solutions to boost economic development in New Jersey.
NJIT’s focus on economic development as a core mission of the university directly supports the essential themes of Governor Murphy’s economic plan, The State of Innovation: Building a Stronger and Fairer Economy in New Jersey. President Bloom outlined the impact and importance of higher education on New Jersey’s economy, which includes NJIT’s $2 billion economic impact on the state.
Below is President Bloom’s opening testimony to the joint hearing at the New Jersey State House in Trenton.
Joint Hearing of the Senate Economic Growth Committee and Assembly Commerce and Economic Development Committee
Joel S. Bloom, President
New Jersey Institute of Technology
Thank you for the opportunity to testify regarding higher education and state economic development at this joint hearing of the Senate Economic Growth Committee and the Assembly Commerce and Economic Development Committee. This is a topic upon which I have spoken and written often, because New Jersey Institute of Technology (NJIT) is somewhat unique in that economic development is an expressed and core component of its university mission, along with education, research, and community service. The intentional focus of NJIT on the economic development aspect of its mission has resulted in close partnerships with our state’s most essential industries and an annual economic impact on New Jersey that some might find surprising—more than $2 billion. Furthermore, Governor Murphy’s economic plan, The State of Innovation: Building a Stronger and Fairer Economy in New Jersey, outlined four key themes, three of which—Investing in People, Investing in Communities, and Making New Jersey the State of Innovation—directly connect to the mission and work of NJIT. During my testimony, I will speak broadly of the role that higher education must play in economic growth and will provide examples of success achieved in this area by NJIT.
It has been established that expansion economies are accelerated by knowledge and technological advancement. It also has been demonstrated that higher education, through workforce development, research and development, and innovation, is one of the most significant factors in driving gross domestic product growth. Therefore, higher education policy and economic growth are inextricably linked. Today, the industries that drive our national and global economies, including health care, military and defense systems, manufacturing, transportation, finance, and every other business sector you can imagine, are technology enterprises. They rely upon both a highly trained workforce and technological innovations that enhance efficiency and yield new and/or improved products and services. That is precisely the reason why job growth is occurring most rapidly in sectors requiring what The Economist refers to as “non-routine cognitive thinking.” This skill set demands the capability to problem-solve, to adapt, to improvise, and to collaborate—this is what higher education is designed to foster within students.
Not surprisingly, job growth in the technology cluster is booming, so much so that we are not able to meet the demand for talent across technology-driven industries. In fact, the Wall Street Journal noted that the United States has 1.3 million vacant jobs in science, technology, engineering, and math (STEM) fields annually and only 600,000 new college graduates within those disciplines. NJIT students are reaping the benefits of this shortage. By the time they reach graduation (NJIT’s graduation rate far exceeds the national average), our students have an average of nearly three job offers in hand and starting salaries exceeding the national average by almost 20 percent. This is one reason why NJIT is now ranked #1 in the nation by Forbes for the upward economic mobility of low-income students. One-third of NJIT’s students are federally-funded Pell Grant eligible, and over 70 percent of our students receive financial aid. However, upon graduation, they become highly compensated STEM professionals, transforming their lives as well as those of their families, and creating significant revenue for state and local governments. In addition, economic analysis has shown that technology jobs have a multiplier effect, with every job created in the tech sector resulting in an additional 4.3 jobs in related and other sectors.
The impact of higher education on economic growth also extends beyond its important role of educating the workforce of tomorrow. Colleges and universities can be economic catalysts when they partner with industry on research and development. At NJIT alone, we annually conduct more than $162 million in applied research, solving real-world problems in areas that include civil infrastructure, advanced manufacturing, cybersecurity, transportation, medical devices, nanotechnology, clean energy, resilient design, national defense, financial services, health care, materials science, and many others. This has earned us the recently announced distinction of being designated an “R1” research university by the Carnegie Classification®, which indicates the highest level of research activity. NJIT is one of only 131 universities nationally and just three in New Jersey—Princeton and Rutgers are the others—to achieve this recognition. NJIT’s R1 designation is in response to our university’s growing body of research and will benefit the State of New Jersey in multiple ways. The R1 designation will enhance the ability of NJIT to attract competitive research funding from agencies and private-sector partners to New Jersey. Additionally, NJIT’s $162 million in annual research activity has a multiplier effect on industry research expenditures and results in increased employment across a broad range of business sectors.
Other higher education/industry partnerships have significant and positive effects on our state economy, as well. For example, the New Jersey Innovation Institute (NJII) is NJIT’s portal to partnership with industry and government. NJII applies NJIT’s intellectual and technological resources to challenges identified by private- and public-sector partners and generates more than $80 million in annual revenue with a 17:1 multiplier effect on the economy. NJII focuses on industry sectors that are foundational to the New Jersey economy—Biotechnology and Pharmaceutical Production, Medical Devices, Civil Infrastructure, Defense and Homeland Security, Financial Services, and Healthcare Delivery—and has built technology ecosystems related to advanced manufacturing, healthcare, medical devices brownfields remediation, transportation planning, defense contracting, and the Internet of Things, including working with the City of Newark and multiple technology companies to create “Newark LINK,” a smart city program. Today NJII is partnering with more than 100 companies. In addition, VentureLink at NJIT is New Jersey’s largest tech and life science incubator, and Makerspace at NJIT is an educational, research, and economic development space for advanced manufacturing that is available to both the campus community and manufacturers who can use the facility’s state-of-the-art industrial equipment to design, build, and test prototypes. Each of these efforts at NJIT, as well as similar ones at other universities, has direct and substantial impacts on our state economy.
Unfortunately, New Jersey higher education has endured decades of declining state funding and an absence of state support for ongoing capital repair and replacement. New Jersey is among the nation’s leaders in funding K-12 education but is among the lowest for higher education. By underfunding higher education, we are reducing the benefit of our state’s very worthwhile investment in K-12 education. New Jersey’s annual brain-drain, a net out-migration of approximately 30,000 college students, represents a loss of approximately $275,000 per student invested in the K-12 education of those students. We are preparing students as well as any state in the nation but are losing them to other states, where they find post-graduate employment and frequently take up residence after college.
If New Jersey truly is to become the State of Innovation, higher education must be a central consideration for future investments and policy decisions regarding economic development. As has been done at NJIT, we must cultivate longstanding and emerging partnerships between corporations and institutions of higher education. Policy decisions that detract from or neglect higher education will cause great damage to our state economy. Conversely, policies that strengthen our ability to provide the type of education, and the access to it, that will prepare students for this rapidly changing economy while enabling us to continuously drive innovation will strengthen our state and improve quality of life for its citizens.
Joel S. Bloom
New Jersey Institute of Technology