Policy expert sees dreary future for telecom in New Jersey

Industry seen losing jobs and research and development capabilities to other parts of the nation

By: Lauren Otis
   WEST WINDSOR — At a recent "telecommunications summit" on the convergence of telecommunications technology, held at Sarnoff Corp. headquarters, James Hughes, dean of Rutgers University’s Edward J. Bloustein School of Planning and Public Policy, began his presentation by saying he has been accused of being "the Dr. Kevorkian of New Jersey, having forecast nine of our last five recessions."
   Noting he intended to keep up this reputation in his talk on the state of the telecom industry in New Jersey, Mr. Hughes proceed to do just that, painting a distinctly unrosy picture of the state’s telecommunications sector, which is losing jobs and research and development capabilities to other parts of the country.
   "New Jersey unfortunately has been loosing its edge," in the telecom realm, Mr. Hughes said at the summit, hosted by the New Jersey Chamber of Commerce and the New Jersey Board of Public Utilities.
   Noting that New Jersey’s share of total U.S. employment is 3 percent, Mr. Hughes said, citing U.S. Bureau of Labor Statistics census data, that in 1990 the state played host to 5.8 percent of telecommunications jobs in the country, showing that "an undeniable telecom cluster was resident in the state."
   By 2005, New Jersey’s share of national telecommunications jobs was down to 3.8 percent, a 34-percent loss of such jobs to other parts of the country in just 15 years, Mr. Hughes said.
   "The Hughes estimated seismic shift date," when New Jersey’s total telecommunications jobs would drop to 3 percent of the nation’s, would be in the third quarter of 2008, he said. At that time, "we will have fully regressed to the national mean, we will be like any other state," with no claim to being a center for the telecommunications sector in any way, he said.
   New Jersey has lost traditional "wired telecommunications" jobs at a slower rate, Mr. Hughes said. In 1990, 7.5 percent of the nation’s wired telecommunications jobs were in New Jersey, and by 2005 this percentage had declined to 4.7, "clearly an above average concentration but one that is declining," he said.
   In the wireless telecommunications sector, although jobs have jumped nationally, growing 362 percent from 41,371 in 1990 to 191,136 in 2005, New Jersey’s growth was only 200 percent, from 1,755 wireless jobs in 1990 to 5,271 in 2005, Mr. Hughes said. In 1990 New Jersey held 4.2 percent of national wireless telecommunications jobs, but despite adding jobs, only held 2.8 percent in 2005 meaning job growth in this sector was far greater in other parts of the country. "We as a state are now underrepresented in terms of wireless employment," he said.
   To make matters worse, the 28,278 wired telecommunications jobs New Jersey has lost in the past 15 years, pay an average of $91,721 annually, whereas the 3,516 wireless telecommunications jobs the state has gained over the same period only pay an average of $68,879 annually, "again not the best of tradeoffs," Mr. Hughes pointed out.
   Mr. Hughes said that much of New Jersey’s earlier hegemony in the production of telecommunications technology and services, came about as an "accident of geography," with no real state political effort to attract the industry. He cited the Sarnoff research center where the meeting was being held as an example, describing how in 1941 it was built in West Windsor off Route 1 because it was an easy drive from RCA corporate headquarters in New York City, and equidistant from RCA’s two manufacturing facilities in Camden and Harrison.
   For the future, "unless there is a sustained public policy response, and I think the current administration realizes there needs to be a sustained public policy response, New Jersey’s role as a producer of telecommunications technology and innovation is likely to wane," Mr. Hughes concluded.