Hot Cities

Middlesex / Somerset / Hunterdon (1998)

Driven by a talented labor pool and a government with a refreshingly aggressive pro-business attitude, this three-county MSA in central New Jersey has shed its reputation as the bedroom community for nearby New York City, Philadelphia and Trenton, New Jersey. The area is now a small-business powerhouse, ranking as the number-one large city in the Northeast.

Successive waves of downsizing by big corporations in the area and a large number of affluent two-income households have resulted in a flood of educated, ambitious people looking to start businesses. These businesses are filling the needs of the area's rapidly growing population; in fact, more than 20,000 service-based jobs in businesses with fewer than 100 employees were created in this MSA from 1992 to 1996. The area's proximity to many major East Coast cities has also made it an ideal location for research and development activities as well as "back office" operations of large corporations.

Although property taxes are still higher than in some states, state and local governments are working on strategies to encourage business growth. Governor Christine Todd Whitman has streamlined New Jersey's regulatory process; lowered the corporate income tax rate; and provided incentive programs to businesses that relocate from other states, pay more than the minimum wage, or offer job-skills training to their employees. At the local level, Somerset County has relaxed zoning laws to allow homebased businesses to flourish.

Contrary to popular belief, industry in the Garden State isn't all smokestacks and dump trucks. Central New Jersey is a green, semi-rural area that has attracted a wide variety of "clean" businesses, including AT&T, Merck & Co. Pharmaceuticals and Metropolitan Life insurance company. And at the rate it's growing, this region can expect more businesses to seek its greener pastures.

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This article was originally published in the October 1998 print edition of Entrepreneur with the headline: Hot Cities.

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