Governor Murphy Discusses Vision for Strengthening New Jersey's Innovation Ecosystem

Governor Phil Murphy discussed his vision for tax incentives reform and growing New Jersey’s economy on June 24, 2019, in NJIT’s Makerspace. 

In his introductory remarks, NJIT President Joel S. Bloom cited the university’s focus on economic development, as evidenced by Makerspace and the establishment of the New Jersey Innovation Institute in 2014.

“We now have a STEM governor and jobs for all across the continuum,” said Bloom. “We need the workforce and the facilities.”

Governor Murphy highlighted the New Jersey Innovation Evergreen Fund (NJIEF), a new program to bring more venture capital investment to New Jersey while strengthening the state’s innovation ecosystem.  

“While we want an incentives program, we need to make New Jersey the place where companies are born in the first place,” he said. “We want New Jersey to be able to back them up, second to none in the U.S. and the world.”

As proposed, the NJIEF will make available approximately $500 million in venture capital funds to be invested into New Jersey-based startups. Of the $500 million total, $250 million will be raised by competitively auctioning state tax credits to New Jersey corporations over five years. The Fund would then invest the auction proceeds, alongside at least $250 million in funds from venture capital firms, into promising startups with the potential to scale up and create jobs. Companies that purchase tax credits through the auction will also be required to make additional commitments, for example, providing mentoring and networking support for startups that receive investments through the NJIEF.

To ensure optimal return on investment, the NJIEF will let private venture capital investors take the lead on identifying and investing in businesses in high-wage, high-growth sectors, such as life sciences, financial technology, advanced manufacturing and cybersecurity. To reduce risk and support founders and entrepreneurs who reflect New Jersey’s rich cultural makeup, the NJIEF will invest in a diversified range of companies. 

As the Fund’s investments mature and experience exit events such as acquisitions or initial public offerings, the investment proceeds will flow back to the NJIEF and its venture capital partners. This will provide a self-sustaining stream of funding to support future investments, making the Fund “evergreen.” If returns are large enough, a portion also could be diverted to support the General Fund, where it would be used to fund other important priorities.