Phil Murphy: NJ tech not just about Amazon

NEWARK — New Jersey's choice for Amazon's new headquarters is well-suited to attract the internet retailer, but the Garden State needs to rethink how it will create a place that will foster smaller, faster-growing companies, Gov. Phil Murphy said Monday.

It includes revamping a tax incentive program that previously lavished billions in potential tax breaks, including some to mature companies that weren't likely to grow very fast.

“This is our economic DNA," Murphy said. "We didn’t lose our dominance in the innovation economy because our people or location changed. We lost it because we let it go.”

Murphy spoke to 260 people at the New Jersey Performing Arts Center for a forum sponsored by the New Jersey Business and Industry Association and Audible, an Amazon-owned technology company that has helped revitalize Newark.

It was a chance for Murphy to lay out his plan to revitalize New Jersey's technology industry. Once the home for groundbreaking innovation with AT&T's Bell Labs, it slowly lost its grip to high-flying Silicon Valley, Denver, Boston and other cities that were magnets for the giant millennial generation.

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Newark could provide a roadmap. The once downtrodden city is one of 20 finalists that Seattle-based Amazon is considering for its second headquarters in a $5 billion project that would bring upward of 50,000 jobs.

Its hand includes a highly educated work force, a high-speed fiber optic network, an international airport and mass transit that can have employees to Manhattan in 20 minutes.

It also includes a culture established at least in part by Don Katz, Audible's chief executive officer, who has formed an uncommon partnership with the city. The company, for example, provides incentives for employees who live in Newark. It subsidizes workers to eat lunch out of the office. It offers 15,000 Newark high school students and teachers a year membership.

He called it a "double bottom line vision" with both the company and the city as the beneficiaries.

"It all made us a better company," Katz said. "And it made us a place that hundreds of people want to leave Brooklyn each morning and come right here to New Jersey."

There are early signs of a shift. Bell Labs in Holmdel has been redeveloped as Bell Works, attracting technology companies that are growing fast. And Asbury Park has attracted creative talent; Katz said he attended the Asbury Park Music and Film Festival last weekend and wanted to form a partnership between Asbury Park and Newark.

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Murphy said New Jersey can be more competitive. Taking his cue from a report released last year by McKinsey & Co., he said huge incentive packages New Jersey has offered to prevent giant companies from leaving weren't paying off.

Instead, he laid out his vision that included: tax incentives for smaller, faster-growing businesses; investments in the state's transportation and education system; free community college; and debt relief to college students who stay in New Jersey. See the video above about one pilot program in Freehold that is capitalizing on the private sector.

For a heavily taxed state, Murphy already seems to be facing pushback from his fellow Democrats in the Legislature.

"I think the idea is, let's take the money we're spending today and let's talk about where the priority is to spend that money where we go forward," said Michele Siekerka, president and chief executive officer of the New Jersey Business and Industry Association. "We are in a dynamic world right now where priorities change every year because of technology and innovation. We should step way back. First of all, we should have a strategic plan that says, 'Where do we want to grow our state?'"

Murphy painted a picture of a state that could be sitting pretty in the digital age.

After all, the millennial generation that migrated to cities in their 20s could return to the suburbs as they get older and have children. And they could find a suburban state that has more urban features — high-paying jobs, craft breweries, entertainment options, all within walking distance from home.

“This state is custom built not only to uniquely lead, but to dominate the innovation economy,” Murphy said.

Michael L. Diamond; @mdiamondapp; 732-643-4038; mdiamond@gannettnj.com