It’s easy to judge the success of economic development solely by numbers. And if that’s the metric you want to use, N.J. Economic Development Authority CEO Tim Sullivan is happy to participate in the exercise.
Sullivan, who began his role at the EDA a month into Murphy’s time in office, will point to 250,000 new jobs, more than $250 million provided to small business, hundreds of new grant, tax credit and other investment programs, support for more than 100,000 small businesses, largest job creation in region since pandemic, the biggest IPO in the country in recent years (CoreWeave), 12 Strategic Innovation Centers and one sector that is just started to blossom but has enormous potential (TV and Film production).
In total, Sullivan figures the EDA has invested more than $8 billion toward economic growth.
Sullivan, however, would rather point to how he feels the administration has redefined economic development.
“I credit Gov. Murphy for broadening what economic development means,” he said. “Yes, it means getting big companies to either come to or stay in New Jersey. But it also means caring about the innovation economy in a much deeper way. It means caring about small businesses in a specific way. It means investing in things like economic security.
“Eight years ago, I think a lot of people would have scratched their heads at the notion of the EDA working on a childcare infrastructure investment or on food security. Hopefully, we’ve changed the narrative that economic development means making broad and deep community development investments that build economic security and quality of life — the type of investments that will help grow the economy sustainably and do it in an inclusive way.”
Sullivan, who intends to leave his role by the end of the year, recently looked back on his time at the EDA in an exclusive interview with BINJE.
Here’s more of that conversation, edited slightly for clarity and grammar.
BINJE: Let’s start at the beginning. When the governor took office, he did so while suggesting that the EDA was not functioning properly. Simply put, he felt the programs were getting little back for what they were giving. In his administration, as you point out, the EDA has awarded more money than the Christie administration. How is the EDA different today than it was before?
TIM SULLIVAN: The critiques of the prior programs revealed some real weaknesses, particularly in the compliance elements — were people doing what they said they were going to do? Was the EDA making sure we had good enough reporting to look people in the eye and say, ‘Company A, you promised X, Y and Z, and we believe that you did X, Y and Z and therefore you’ve earned the tax credits you were promised.’ We have dramatically tightened up the reporting process.
Even more, the prior programs were really focused on corporate tax credits to relocate companies or to get them to stay in New Jersey. And we still have that tool in the toolkit. That’s the Emerge program. You could say that fits Fiserv.
Then there are programs like Aspire, which are investing more in real estate than they are in companies. They are investing more in place than in a sector. This is the investment in things such as the HELIX in New Brunswick or HAX in Newark.
When you build structures, you are building capacity. These can be legacy projects that can be permanent features of the economy.
We also have programs geared toward creating more homegrown companies, because that’s ultimately what you want.
Programs like the Evergreen Innovation Fund, the Angel Tax Credit and the Strategic Innovation Center platform are a much more impactful way to increase the growth trajectory of the state rather than simply luring an existing company here. We feel we’ve changed the game.
BINJE: Helping to create new businesses is great, but let’s turn to the small businesses that already are here. Everyone says small business is the backbone of an economy — but it still feels as if more interest and emphasis is placed on large companies and creating new companies. Many felt more could have been done to help small businesses. How do you respond to that?
TS: Investing in small business is one of those things that you can almost never do enough. It’s not just in New Jersey, but in America. We understand that it’s hard to be a small business when the sun’s shining and the wind is at your back — and rarely are those two things happening. Whether it’s tariffs now, the pandemic five years ago, or just the general challenge of dealing with corporate behemoths that are trying to muscle you kind of muscling you out of your market share, the challenges of being a small business are numerous.
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Gov. Murphy should get a lot of credit for dramatically increasing the amount of resources made available to small businesses. At least a quarter billion dollars of regular state appropriations, plus more than a billion dollars of covid money went directly to small businesses. If you look at a graph of direct appropriations to the EDA to invest in small businesses, you would see 20 years of zeros, and then about a quarter billion dollars the last five or six years — and items for things like manufacturing and child care facilities investment, all of which are small businesses, are another 100 plus million dollars.
I think we’ve done a ton. We’ve been trying to address an enormous structural national challenge. I hope the state of New Jersey continues to invest in small businesses and continues to grow that investment. But it’s got to be investing in things that are not just giving people money as a tax rebate, but in helping them make investments in their business, helping them enhance the capacity of their small business.
BINJE: Touch on a few items with some quick-hit responses. Give your thoughts on helping diverse companies.
TS: It’s fallen out of fashion nationally to talk about inclusive growth, but not in New Jersey, not under Gov. Murphy’s leadership. We’re trying to bring along as many people in New
Jersey as possible. That means being really intentional about reaching out to minority-owned businesses, women-owned businesses, veteran-owned businesses, LGBTQ- owned businesses, immigrant-owned businesses. (For a more detailed answer, click here)
BINJE: Innovation?
TS: We’ve created a number of programs that we consider, if not first in the nation, pretty close: The Evergreen program, the Strategic Innovation Center platform, the Innovation Fellows program, our cannabis grants, our childcare investments and sustain and serve are things that are not just helpful and good, but I think innovative in their own right. They show how economic development can be deployed and be effective. I’m incredibly proud of that.
BINJE: Film industry?
TS: The film industry has grown 10x during his time in office. I think that may be the governor’s greatest economic legacy. If Netflix delivers half of what they’ve promised, it’s going to be one of the most extraordinary economic development projects in the state, region or country. The momentum is incredibly strong. Irrespective of who comes next, I think the baton is being passed with a lot of momentum.
BINJE: Higher education?
TS: One of the key pillars of Gov. Murphy’s strategy for economic growth has been deepening the connection between higher ed and the real economy. If you look at Princeton and the AI Hub with CoreWeave and Microsoft, that’s extraordinary. You won’t feel the full reverberations of that for several years. You look at NJ FAST, which is Stevens, Prudential and Plug and Play. That’s going to have an enormous long-term impact.
BINJE: Strategic Innovation Centers?
TS: There are 12 and they are building institutional capacity for innovation. Will all 12 of them be grand slam home runs? Probably not. In any portfolio, you’ve got some high performers and less lower performers, but the investments that are being made there will pay off. And, by the way, the next governor doesn’t have to spend a penny on them. Those are all fully funded. Hopefully the next governor, whoever it is and whoever their successors are, will tend to that garden. The opportunities those Strategic Innovation Centers present are extraordinary. (For a more detailed answer, click here)
BINJE: And finally, let’s talk about the idea of the government working to spur the private sector. Some feel it should be hands off. Some call it corporate welfare. As a career economic development official, what are your thoughts?
TS: I think investing in economic growth comprehensively is really important. I think if the entirety of your strategy is tax credits for big companies, I don’t think you’re doing it right, and I think you’re opening yourselves up to critique.
I think when you balance investments in companies with investments in place and communities, with investments in economic security and innovation, you get a much more comprehensive economic growth strategy, and that result yields big results.
Gov. Murphy came into office with the critique that the economy wasn’t growing fast enough and therefore not producing enough new jobs and new opportunities for people —as well as the new tax revenue needed to invest in social services and infrastructure and all the things that everybody loves to invest in.
I think we’ve made massive improvements in the growth trajectory so that we can pay down our long-term debts, invest in education and parks and roads — and all the critical things that make an economy go. I think it has been an investment worth making.
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