‘Innovation’ Key to New Jersey Prosperity

New Jersey’s economy outperformed most other states during the 1990s, based on factors such as
average wages and worker productivity, but the state risks losing ground unless industries here strive for
constant innovation, a leading Harvard University economist said yesterday.

By:
Robert Stern
Trenton Times

New Jersey will maintain or improve its economic advantage over other states by focusing on fostering
increased innovation across a broad range of industries in the state, from pharmaceuticals to banking to
transportation, said Michael Porter, a university professor at Harvard Business School.

"We can’t just make the same old products and services more efficiently," said Porter, addressing the
board of trustees of Prosperity New Jersey during the nonprofit organization’s annual reorganization
meeting at Princeton University yesterday.

"The only way this state is going to be able to prosper and continue to prosper is through innovation,"
Porter said.

"A place like New Jersey is not going to compete by being the cheapest place to do business, it’s going
to compete by being the most productive place," he said.

He asserted that, while New Jersey is "very prosperous, with a high level of innovative output," its rate of
economic improvement "is perhaps a little slower than what it should be."

For example, Porter presented research data yesterday that show New Jersey ranks sixth among the
states in the number of patents issued per 10,000 employees but lagged behind 26 other states between
1990 and 1998 in the rate of growth in the number of patents issued.

Prosperity New Jersey is a public-private nonprofit partnership established in the mid-1990s by former
Gov. Christie Whitman to promote economic development in the state.

In March, Gov. James E. McGreevey appointed as chairmen of the group Princeton University President
Shirley Tilghman, Sarnoff Corp. President and CEO James Carnes and the Rev. William Watley,
secretary of the state Commerce and Economic Growth Commission.

A crucial charge for the group, McGreevey said yesterday, will be to foster closer ties between
government, the private sector and universities to encourage economic growth in the state.