By Caren Franzini
New Jersey’s place in the world of pharmaceuticals started back in 1886 when the Johnson brothers set up shop on the banks of the Raritan River in New Brunswick to produce a line of surgical dressings. They started with just 14 employees on the fourth floor of an old wallpaper factory and probably never imagined the revolution that would follow. Today New Jersey is the global epicenter of the pharmaceutical industry and known as the “Medicine Chest of the World.”
Inside that medicine chest you’ll find our prescription for success. A talented workforce makes the state a leader in innovation, research and development. New Jersey’s strategic location between New York City and Philadelphia and supportive trade organizations like BioNJ, the HealthCare Institute of New Jersey (HINJ) and the New Jersey Technology Council bolster the state’s aggressive efforts to attract both foreign and domestic companies. They also support the companies that have already found New Jersey a great place to do business.
Pharmaceutical and Life Sciences in New Jersey While talks of acquisitions and mergers in the pharmaceutical industry have lead to a certain degree of uncertainty, 15 of the world’s leading pharmaceutical companies base and grow their business here. In fact, HINJ estimates the industry’s economic impact in the state at $29.3 billion. Pharmaceutical and life sciences companies employ more than 131,000 people, directly and through “spin-off” jobs.
In addition to its impressive economic impact, the industry continues to demonstrate good corporate citizenship. HINJ members increased their charitable donations by more than $600 million, despite the economic downturn.
This past April, New Jersey’s status as the hub of the global pharmaceutical industry was reinforced when Bayer HealthCare announced it was consolidating its entire East Coast business operations in New Jersey. That move will add 500 jobs to the company’s 1,000 employee workforce in the state.
With $3.5 billion in global revenues, Watson Pharmaceuticals is the fifth-largest generics producer in the world. In 2011, Watson relocated its administration headquarters to Parsippany and plans to double its current staff of 250 over the next few years.
Another success was realized when Otsuka American Pharmaceutical Inc. relocated its U.S. corporate headquarters from Maryland to New Jersey in 2010, creating 50 new jobs. The company—which develops, markets and sells pharmaceutical, diagnostic and medical device products—invested $2.5 million in its expansion.
The New Jersey Partnership for Action So what is this prescription for growth? One of the signature steps taken by the Christie Administration to promote business in New Jersey has been the creation of the New Jersey Partnership for Action, a three-pronged public-private approach to economic development.
The Partnership is helping to attract new businesses and helping existing businesses thrive by:
• zeroing in on relationship-building and
• promoting state incentives and resources,
• developing pro-growth policies, and
• helping businesses navigate state government
regulations and programs.
The first prong of the Partnership is Choose New Jersey, a privately funded, non profit corporation that works to position New Jersey as a world-class leader in the competitive global marketplace by publicizing our diverse resource base and reputation for innovation.
Another component is a team of global and domestic business advocates who provide a customer service approach to state and local government agencies for businesses looking to remain, expand or locate in New Jersey.
The final piece is the New Jersey Economic Development Authority (EDA) which serves as the state’s “bank for business.” The EDA oversees various business retention and attraction programs and incentives, many of which have helped pharmaceutical companies to grow in New Jersey.
Tax Reform In addition to the Partnership, as part of the Fiscal Year 2012 Budget proposal Governor Chris Christie provided $180 million in targeted tax cuts for small businesses in New Jersey. The cuts are designed to spur job growth, business investment and expansion. Among the tax reforms were:
- a change in the corporate business tax formula from a three-factor
formula to a single sales factor
- an option for taxpayers to carry
forward losses from certain
business-related categories of
gross incomes for up to two years;
- a 25 percent reduction in the
minimum tax for S-Corporations;
- a doubling of research and
development credits; and,
- a phase out of the Transitional
Energy Facility Assessment (TEFA)
by January 2012.
The governor has consistently stressed the need for reform and fiscal discipline to overcome the state’s previously hostile climate towards business expansion and job growth.
The Administration has continued to advance policies to further improve New Jersey’s business climate by sunsetting the corporate business tax surcharge; signing new, robust business attraction incentive legislation; and protecting businesses from an average $400 per employee, or 52 percent increase in the unemployment insurance payroll tax. Those policies, coupled with recent activities like the governor’s Creating Jersey Jobs Summit and Lt. Governor Kim Guadagno’s 100 Businesses initiative, all demonstrate that New Jersey is well-positioned for an economic rebound.
Incentives The state also offers a host of incentives to attract and retain companies. As the state’s Bank for Business, the EDA administers programs like the Business Employment Incentive Program (BEIP) to support the relocation and/or expansion of jobs to New Jersey. The BEIP helped Watson Pharmaceuticals to choose New Jersey.
Due to the challenging economy, the Administration has also focused on business retention. Governor Christie signed into law an enhanced Business Retention and Relocation Grant (BRRAG) measure, which was a key to keeping Bayer HealthCare in the state.
There’s a lot going on in New Jersey as the state continues to enhance its business climate, streamline its regulatory process and advance pro-business initiatives. To learn more about New Jersey’s expertise and incentives to attract and support business growth in your community, call the Business Action Center at (866) 534-7789 or visit the State’s Business Portal at www.newjerseybusiness.gov.
Originally published in New Jersey
Municipalities, Volume 88, Number 8, November 2011