As the U.S. economy has recovered from the Great Recession, New Jersey has struggled to keep pace. Since 2010, the overall economy has grown 13.2 percent while the state has only grown 8 percent. But within New Jersey, Mercer County has grown a respectable 14 percent, just beating the national average and blowing away the state average.
James Hughes, dean of the Edward Bloustein school for planning and public policy at Rutgers, has been studying why Mercer County has been a relative success story and will share his thoughts at an upcoming Princeton Regional Chamber of Commerce forum. The Mercer County Economic Summit will be held Tuesday, February 28, from 5 to 7:30 p.m. at the Boathouse at Mercer Lake in West Windsor. In addition to Hughes, there will be a panel discussion on adapting and preparing business for the changing economy, with Kimberlee Phelan of accounting firm WithumSmith+Brown, Wayne Pinkstone of law firm Fox Rothschild, and Mercer County Executive Brian Hughes. Tickets are $50, $60 for nonmembers. For more information, visit www.princetonchamber.org or call 609-924-1776.
Hughes the planning specialist, no relation to the county executive, believes Mercer County and the Route 1 corridor have been successful because they are well positioned to take advantage in changes in the economy.
“We’re seeing our suburban office ecosystem reinventing itself,” Hughes says. “Some parts of the system are becoming 21st-century economic assets, while others remain 20th-century dinosaurs.” Places near suburban “activity centers” are doing well. Morristown, the Hudson River waterfront, and Princeton are examples of “activity centers,” he says.
Many office buildings along the Route 1 corridor are desirable because of being near Princeton, Hughes says, and some have modernized extensively in order to stay relevant. “The poster child for that is the old Merrill Lynch facility on Scudders Mill Road, which is now the U.S. headquarters for Novo Nordisk,” Hughes says. “And also you have Bristol-Myers Squibb expanding with a new facility in Lawrence. It’s one of the better marketplaces in New Jersey.”
The Route 1 corridor has much in common with struggling suburban areas, which are seeing corporate offices leave for city centers all over the country. For example, Motorola Solutions is moving white collar jobs from the distant suburbs to downtown Chicago. On the West Coast, Weyerhaeuser moved from its suburban campus to a new building in downtown Seattle. But Mercer County has an asset that some other suburban areas lack: an availability of rental housing.
“There’s rental housing in Plainsboro near downtown Princeton on the Route 1 corridor,” Hughes says. “That’s much better than the Merck facility out in the hinterlands of Hunterdon County, which is surrounded by nothing.”
Modern businesses need to recruit skilled 20 or 30-something workers, Hughes says, and these workers need rental housing for several reasons. First, they prefer to live near “activity centers” with restaurants, bars, and amenities. Second, they have a hard time finding housing on their own. In New Jersey almost half of all residents aged 18 to 34 still live with their parents, the highest percentage in the nation. Not coincidentally, New Jersey also ranks number one in housing costs. “It’s hard to set up individual households,” Hughes says.
It would seem that municipalities are shooting themselves in the foot when they favor low-density single-family homes over high-density rental housing. “Economic growth really follows successful corporations, and they depend on a highly skilled, technologically savvy labor force,” Hughes says. “They are going to locate where that labor force can afford to live or where it wants to live. When you don’t have rental housing for people in their 20s, you have a real disadvantage.”
But in a constantly changing economy, today’s wisdom doesn’t necessarily apply tomorrow. The rapid pace of technology has dramatically altered the office landscape. “Exactly ten years and one month ago, Steve Jobs introduced the iPhone, and the iPhone created a completely new economic era,” Hughes says. “Before that most workers were chained by umbilical cords to their desktop computers in office buildings. You now carry an immense amount of computer power in your pocket. It’s freed up how workplaces are organized and how people can work. Any place is a workplace with iPads, ultrabooks, and high-powered laptops and the like.”
Some of the office buildings in the Route 1 corridor were designed in the 1980s when running a business required a lot of paperwork on actual paper. When powerful desktop computers took over many of these tasks over the next decade, the nature of white collar work changed with it. Offices became less devoted to routine clerical work and more devoted to creative work and trying to develop new ways of doing business, Hughes says.
Technologies currently in development could bring about even more radical changes. Artificial intelligence, machine learning, and neural networks are just beginning to be used as business tools. “We are going to see further disruptions to the way we do business moving forward,” Hughes says. “Two years ago, when the head of Amazon talked about delivering packages by drone, it sounded totally absurd. Now it sounds reasonable.” Self-driving cars could change living trends as well and spark revitalization of suburban places. Long commutes could be more tolerable if the driver can spend the time working or relaxing instead of sitting at the wheel.
Another change coming down the pike for businesses is the impending retirement of baby boomers. The oldest baby boomers turn 71 this year. “This is a huge generation and really represents the workforce of the past,” Hughes says.
But that doesn’t mean they are obsolete. In fact, boomers have vital skills that businesses will struggle to replace, he predicts. “A lot of them have really adapted well to the new economy and new technology. What we’re seeing now is probably the greatest brain drain n the nation’s history as that generation retires. That generation represents a lot of institutional memory, a lot of knowledge of business practices, and a lot of interpersonal skills.”
Hughes is a boomer himself, having grown up in Elizabeth, where his father, a bricklayer, died in 1957. He was raised by his homemaker mother, who went to work in a cookie factory when her husband died. Hughes was the first in his family to attend college, earning a degree in civil engineering and city planning at Rutgers. He served in the Army and returned to Rutgers in 1967, earning a doctorate in the school’s new postgraduate urban planning program, and became an assistant professor in 1971. He has spent the decades since then studying economics and urban planning.
But even Hughes is reluctant to make predictions about which kinds of businesses will succeed and which will fail in the rapidly changing climate. “If I knew that, I would be a very wealthy individual,” he says. “Economics is known as the dismal science, and it has a dismal forecasting record. I don’t know about who are going to be the winners and losers, but every industry is being transformed.”