The central New Jersey business community has a lot to be smug about. While federal politicos bicker whether there is any recovery at all and municipalities search for slender rays of growth, the center of the Garden State can proudly claim growth in employment, successful business launchings, salaries, and real estate sales. Rental rates in central New Jersey are on the rise, according to Cushman & Wakefield’s third quarter commercial real estate report (see story p.TK). Even within the Sandy-smitten state as a whole, the NJBIA September business outlook survey was summed up by its president Philip Kirschner, who noted, “business confidence appears to be bouncing back to levels not seen in quite some time.” All well and fine. But how long will this state’s economic hub keep spinning, and who’s driving the engine?
To help assess the state of central New Jersey’s current and future fiscal health, the Middlesex County Regional Chamber of Commerce presents “Economics for Breakfast: You & New Jersey,” on Friday, October 17, at 8:30 a.m. at the DoubleTree of Princeton at 4355 Route 1.
Rutgers University professor Arturo Osorio will moderate the panel “You and New Jersey, Perfect Together?” Panelists include Bill Neary, executive director of Keep Middlesex Moving; Elayne McClayne, regional director of the New Jersey Small Business Development Center; Jessica Paolini, economic development manager of Choose New Jersey; Kathleen Shaw, department head of the Middlesex County Department of Business Development & Education; and Billy Steets, project consultant of New Jersey’s Clean Energy Program. Cost: $45. Visit www.mcrcc.org.
Rutgers professor Osorio has his hand and voice in everything entrepreneurial. In addition to teaching a full course load at the business school, he teaches at the Joseph C. Cornwall Center for Metropolitan studies and at the Center for Urban Entrepreneurship & Economic Development. Osorio has co-founded the Newark-based Urban Research Unit Think Tank. He serves as the advisor to Rutgers’ C.E.O. (Collective Entrepreneurs Organization) as well as several other business development institutes.
Growing up in Puebla, Mexico, Osorio got his initial taste of business from his CPA father, who served as an accountant for several local businesses. “Accounting shows how value flows into a community — it is really value’s unit of measurement,” explains Osorio to his students.
Upon graduating from Universidad Popular Autonoma del Estado de Puebla in 1994 with a bachelor’s degree in accounting and finance, Osorio entered UMass Amherst’s Isenberg School of Management. He took his master’s in business strategy followed by a doctorate in regional business development. One of his most beloved projects while in the Bay State was serving as financial officer for the joint Mexican/USA project, the Large Millimeter Telescope (www.lmtgtm.org).
“If you are trying to think outside the box,” says Osorio, “you have already made a major mistake. You have built an artificial and unnecessary box to think outside of. So why not tear down the limitations and let yourself conjure new goals and methods?” And if our central New Jersey business community is to keep booming, we have a lot of mental demolition and restructuring to do.
Mid-NJ’s advantageous base. Osorio predicts a continuation of strong growth in the center of the Garden State. He cites the solid cluster of varied industry and the fortunate location enhanced by markedly good roads and other transport systems.
Less tangible, but arguably the region’s greatest asset lies in its knowledge base. From the rank and file to senior management, central New Jersey holds a deserved reputation for a deep pool of competitively skilled individuals. No matter what you need made, this area has an available, able, and experienced pool of workers who have probably made it before. The renowned university cluster and vocational schools keep feeding the workforce stream and provide up-to-date training. Finally, the exceptional number and quality of research institutions and resources put innovative ideas and top talent within easy reach.
The picture is not all rosy, however. Osorio points out that while we have many corporate, academic, and institutional assets nearby, our collaborative game is weak. He cites certain states in his home country and throughout the U.S. where universities, schools, and local business incubator programs have united to bargain with vendors for cost savings. Companies and professional organizations could work much more closely with academia to provide specialized training courses that they require for growth.
Collaborative partnering is making some headway. The number of transfer offices in New Jersey colleges is growing, thus connecting inventive researchers with businesses that can transform ideas into opportunity. “Rutger’s active collaboration with the New Brunswick patent office presents a fine model,” says Osorio. “But what’s really needed are more social incubators — companies and organizations combining to address social needs, such as hunger and housing.”
Trapped in our own history. Osorio subscribes to a very simple, very proven, but too often ignored commercial philosophy: business thrives best in a thriving social climate. So if you want your business to prosper, you had better invest value into your community. The problem is that U.S. business has historically not made this connection.
This nation holds a long tradition of allowing business a completely free hand. Able to do anything that’s not specifically forbidden, business has the right to pursue its own most narrow interests. This cultural attitude has fostered immense growth and urged us to industrial might. At the same time, this lack of restriction has set the business community on a single-minded path. The sole goal of maximizing profits is accepted as the only reason to launch and build any business. This single-sighted aim has taken us from the foundations of agricultural slavery through industry’s continued war against workers’ wages until our most recent history.
This ethic is more a matter of focus than lack of caring. Companies have been given one single task — to generate revenue. It is seen as the board of directors’ legal responsibility, and within the last few years, directors have been brought to court and sued for failing to deliver their best efforts to maximize profits. However, times are very much changing.
The tipping point. Increasingly, business media and commentators are taking note of a new wave of startups that are launching as social enterprises. “People in business are seeing themselves as contributors to their community with a sense of social and environmental responsibility,” says Osorio. Even the larger plants are shifting their positions and seeing themselves as corporate neighbor.
As George Wurtz, CEO of Soundview Paper in Elmwood Park stated, “Gone are the days when you would just go out, buy acreage, and plunk down a factory in isolation. Today, you are probably going to set your plant within the boundaries of a town that you very much want to be part of.” In one way, we are returning to our commercial roots. The old time family farmers are now becoming the family entrepreneur with businesses blossoming in areas of high urban density, where the owner personally knows his market, and seeks connection with it.
This shift to 72 percent of the population in urban settings, Osorio points out, creates many niches for firms with smaller economic benchmarks. A major chain retailer may eye such an urban or near-urban setting as an ideal locale. However, initial analysis shows that a chain franchise may require a daily revenue of $75,000 to offset the hired staff and many layers of management within the large corporate organization. Meanwhile, a smaller, privately owned coffee shop staffed by the owner’s immediate family requires a much lower operations cost mark and may be able to fill that same spot quite profitably.
Perhaps what will keep the central Jersey hub humming is the flow of greater participation. Our larger industries will continue to flourish with the support of an ever-expanding blanket of smaller, supporting firms. With more fingers contributing into the pie, everyone ends up earning a bigger slice.