Working toward 20/20 vision for life sciences. (Insiders Outlook).

At the recent meeting of the Board of Trustees of Prosperity New Jersey, Professor Michael Porter presented his long-awaited report "New Jersey Life Sciences Super-Cluster Initiative." The report quantified the inferences that many of the business leaders and research institutions in the state had already drawn: That while today New Jersey enjoys a sound position in the life sciences, other states are beginning to catch up on a number of important measures, most significantly in the area of innovation.

New Jersey ranks 10th in life science patents per life science worker, surprisingly low for "the medicine chest of the world." Our life science patent growth rate is last in the nation. University-based research and development in New Jersey lags most states. Of the five universities and hospitals that rank among the top 25 life science patent holders in the nation, not one is based in New Jersey.

Among the top 25 life science patent holders in New Jersey itself, there are only two university-based research institutions: Rutgers University (11th) and the University of Medicine and Dentistry of New Jersey (21st). In comparison, 11 of the top 25 patent holders in Massachusetts are university and research hospitals. Not only is Princeton not among New Jersey's top life science innovators, it also ranks 78th nationally in life science patents among research universities and institutions.

The conclusion is unavoidable. New Jersey is experiencing an on-going erosion of its life science industries and neither the state's government nor universities are responding adequately to the serious challenges that this vital sector of the state's economy is encountering.

Governor James McGreevey and the executive director of prosperity New Jersey, Adam Pechter, deserve great credit for initiating the Porter report. It is impossible to properly respond to a problem if you have not adequately understood it. Professor Porter has provided the state with a blueprint for the future.

The Governor should also be commended for permitting this report to be issued in the middle of a difficult fiscal environment in which he is recommending draconian reductions in business incentives and in university-based research programs. After Professor Porter's presentation, the Governor himself asked Professor Potter the most probative question: "Given our fiscal condition, what can the state of New Jersey do to improve, protect and preserve its leadership position in the life sciences?"

To respond to the Governor's question, we should recall the words of the French poet, Paul Valery who wrote that, "The problem with our present times is that our future isn't what it used to be." There is great empathy in the state for the Governor's budget predicament. But there is a strong sense that the Administration has failed to articulate a vision for the state beyond the current fiscal crisis.

Like Francis Fukayama who proclaimed "the end of history," Administration is behaving as if Fiscal Year 2003-04 represents the end of history in New Jersey. The fact is that the economic cycle will turn and the state's economy will improve. The Governor can secure an appreciation for - if not support of -- his budget measures if he explains how he will address the needs of the state's business and university-based research communities once the state's fiscal condition is stabilized. We have been offered blood, sweat and tears without hope. What we are demanding is not more money but more vision.

For example, the Governor has proposed cutting $30 million from the Business Employment Incentive Program (BEIP). Specifically, what the Administration is proposing is that the state not appropriate funds for BEEP in the Fiscal Year 2003-04 budget (which begins on July 1, 2003). The Administration has not yet explained whether the program will be permanently suspended or, if not, whether the state will compensate companies that will lose benefits. It would be helpful if the Governor would announce that the impact of his decision to suspend BEIP benefits will be limited to FY 2003-04 and that the state will extend the eligibility period for any firms affected by his decision. If he does not, New Jersey will be discredited nationally and internationally as a reliable partner in economic development.

The same can be said about the elimination of funding for the New Jersey Commission on Science and Technology. The Commission has been the state's major conduit of finds to university-based research programs. Basic research is the raw material of a knowledge economy, which is a key building block for prosperity in modem societies. Most of it is performed at universities.

While it is true that New Jersey lags in federal government support for research activities, it will be perceived as disingenuous if we were to demand a greater commitment from the federal government even as the state completely eliminates its support for research activities.

The Administration needs to articulate a strategy on how the state will generate more university-based research and more technology commercialization. To begin with, the state needs to create a consistent and reliable source of funding for R&D, infrastructure and high technology business growth in the state. The fund could be supported by a combination of Technology Competitiveness Bonds, appropriations, pension fund investments, user fees and special assessments. If we do not invest in the state's physical and human capital, we will quickly be surpassed by other states as a high technology center of excellence.

When Helen Keller was nineteen months old, she fell ill. Her illness left her both blind and deaf. She learned to communicate, read and write through the inspired efforts of a visionary teacher, Anne Sullivan. Helen Keller went on to become one of the great American thinkers of the 20th Century. When a reporter asked her, "Miss Keller: Could you possibly imagine anything worse than losing your eyesight?" She answered, "Losing your vision!" Professor Porter's study provides New Jersey with the foundation for a long-term vision for prosperity. McGreevey has demonstrated resolve in forging the way for the study to be prepared. He demonstrated courage by allowing it to be publicly presented even though it criticizes the state's government and institutions for inadequately leading the state forward. Now the Governor needs to work with the state's leaders to visualize the ideal composition of New Jersey's economy by the year 2020 and to plan for what we need to do to build this model economy. Even in the midst of a fiscal predicament, New Jersey can afford to have 20/20 Vision.