The Business Case for an Excellent, Accessible University of Minnesota

Tuesday, September 27, 2011

A speech to the Minneapolis Regional Chamber of Commerce
September 27, 2011

I plan to leave time at the end for questions-and-answers, but I'd like to jump the gun a bit and ask you a few questions first.

First, how many of you have a degree from the University of Minnesota?

How many of you have a spouse, significant other, son, daughter or grandchild who has a degree from the U?

How many of you have children or grandchildren who aspire to attend the University or are currently attending?

How many of you work with or have hired a University of Minnesota grad?

How many of you root for the Gophers?

Is there anyone here who hasn't raised his or her hand at least once?

Good. No one.

I trust you got my point: Like just about everyone in this room, just about everyone in our entire state has a deep relationship with the University and has a real stake in its success.

Excellence in everything we do and ensuring access to the University for qualified students . . . good grief . . . Is there anything we can do that's more at the heart of what the business community is interested in its University doing?

Frankly, I don't think so. We're here to help you hire really terrific people. We're here to help your employees continue their education. We're here to help you innovate, and to be able to create the kind of business vitality that we all need.

I've been on the job for 89 days now.

With this gathering, I've now met not only with this Chamber, but also the Minnesota Chamber, the Itasca Group, the Minnesota Business Partnership and, in Greater Minnesota, with leaders of the agribusiness community at FarmFest, and local business leaders in Morris and Crookston. I'm heading for Rochester next week, and Duluth a few weeks after. Get a chance to cool down up there.

I've met with numerous CEOs one on one.

I've told them — as I am telling you today — I am seriously committed to advancing the University's relationship with our business community.

I view the Chamber, and each of you, as strategic partners towards that effort.

All of us have run businesses, and we all know that businesses rise or fall on the talents of their people. The University of Minnesota is first and foremost in the people business. We are the fifth largest employer in the state. We share all of the concerns that you have as business leaders.

But we also happen to educate and train your best employees. To the degree that Minnesota has a talented and diverse workforce, business comes here, stays here, and grows here. If we don't train those people, we just fall apart. The world is a flat place and if we don't stay ahead of the curve, people will, proverbially, eat our lunch.

And we are training some pretty spectacular people these days.

Let me tell you about the caliber of young people learning and graduating from the University.

I don't have to look much farther than our incoming freshman class, which arrived earlier this month with remarkable energy and promise on our Twin Cities campus. Our incoming Class of 2015 is, by all measures, the best-qualified group of first year students in U history.

40,000 applicants. 5,378 enrolled.

Highest ACT scores ever. An average of 27.5 across the board, with students in the Colleges of Biological Sciences and Science and Engineering scoring above 30.

If the U ever was a safety school, it's not anymore. It's an aspirational school. It's a school that is a treasure, and absolutely worthy of our investment.

Most National Merit Scholars ever, and, we believe, the most National Merit Scholars among public universities in the Big Ten, with 167.

I get sometimes disappointment. Some people wonder: "My son or daughter, my grandson or granddaughter didn't get into the U! Why?"

Part of our message to the community, to parents and students, is that you need to plan and work to come to the University of Minnesota. If you decide in the 10thgrade that you're not going to take math, you've made a decision that you're not going to go to the University of Minnesota. If you make a decision, "I'll probably just coast in my last year of high school," you're probably not coming to the University of Minnesota.

It's important for us to communicate with our partners in K through 12 what we're all about. We're going to enhance the quality of University of Minnesota degrees, and the value of your degrees and my degree from the University.

I do want to emphasize that our selectivity is not coming at the expense of Minnesota students. The fact is, we're not turning down Minnesota students in favor of out of state or international students. This year 63.5 percent of our freshmen graduated from a Minnesota high school and that percentage that has pretty much held steady over the past decade.

But we also bring students from Wisconsin, about six percent international students and 17-18 percent from other states in the U.S. We do plan to continue that mix and grow somewhat students from other states, which grows our diversity.

The University produces more than the thoughtful, creative, excellent leaders we all need in our workplaces.

The University is also in the idea business. That is a key and historic role for this University. We innovate. We discover. We create the future. We mold managers. We craft leaders. We promote curiosity.

We are the state's ONLY research university. It's uniquely a part of our mission.

That means we cure, we invent, we work to solve social problems by engaging with communities in the Twin Cities and across the state.

And we engage businesses and citizens in diverse ways:

  • Our pioneering technology in biomedical devices that goes back decades to the first portable pacemaker and the birth of Medtronic;
  • Our Carlson School of Management's highly successful Holmes Center for Entrepreneurial Studies reaches out to your companies through mentorships, internships and business hatching programs, and supports the Minnesota Cup, a prize for innovation and new startups. Often the winners of those competitions are not from the sciences and technology, but from the humanities as well
  • Our Office for Technology Commercialization has generated more than 300 patent filings over the past five years, from pharmaceuticals to software;
  • Our work with agribusiness companies finds cures for farm animal illnesses, develops vaccines, and feeds the world.

We also are the cradle of creative thought in the arts and humanities. Combined with the high-tech, health sciences and business energy we create, the U helps to make the Twin Cities a cultural magnet within our region, and within the nation.

Governor Dayton spoke at my inaugural last week. He tossed out a remarkable fact.

He said that the University of Minnesota's annual economic impact on the state of Minnesota is equal to the combined impact of all eight-research universities in the Boston metropolitan area, including Harvard, MIT and Boston University.

I was sitting right next to him. Frankly, I said, "That sounds great, but that cannot be true!"

So, we checked.

According to a 2003 study done by a Boston consulting firm — a hometown team — the economic impact of all those schools was about $7 billion annually.

Last year, our impact was estimated at $8.6 billion. That's pretty remarkable

Gov. Dayton put that statistic — which turns out to be true — into perspective by saying, "My father often told me: 'If you have all of your eggs in one basket, you better take mighty good care of that basket.' "

We need to take a little bit better care of our "basket."

Reflect on these things. Open-heart surgery to Honeycrisp apples, the University's history of discovery is rich and profound. Today, in labs four exits away on I-94 from here, we are investigating food safety, Alzheimer's, diabetes, heart disease, cancer, and childhood illnesses of all kinds.

I said this in my inaugural speech. I can't guarantee that we'll discover another life-saving medical technology that will come from the University of Minnesota.

But I can guarantee you this: If we continue to disinvest in the University of Minnesota, if don't set our priorities right, if we don't attract and retain the best scientists, if we don't recruit and support the best young investigators and the best young minds, we absolutely will not discover new things.

Instead, we will wither as a University. Our business climate will go down with it. That I can guarantee.

Norman Augustine, the former CEO of Lockheed Martin, and a passionate supporter of research and development in higher education, has the best quote on this: If you happen to find yourself on an airplane that is losing altitude, and if you have to throw out things to cut weight . . . the absolute last thing you would throw out is the engine.

The University of Minnesota is the engine for the state. We have many partners, many business organizations.

But the University awards 90 percent of all science, technology, engineering and math Ph.D.'s in the state, 85 percent of all M.D. degrees, and 100 percent of dentistry, pharmacy and veterinary medicine degrees.

Just to even it up, we produce a few hundred lawyers!

Let me turn to what we do for Minnesota business every day and how the University invests in our state's economic vitality.

I know we've been criticized for being slow moving and sometimes unresponsive. I get that and I hear that. I gather that a few years ago members of the business community felt all they got from the U was unanswered voicemails, or stares.

But that's not true anymore. You should test us.

The Office of Business Relations was created a few years ago to serve as the U's "front door" to the business community and help connect you with the talent, training and technology that you need.

The Office of the Vice President for Research, under Vice President Tim Mulcahy, leadership, has moved forward tremendously, it works to enhance commercialization of university-based technologies, invigorate the formation of new spin-off companies based on university research, and enrich university-business interaction.

Tim Mulcahy has stepped up our game over the past several years, hiring staff with industry and small company experience, and promoting entrepreneurial development.

We're pretty self-critical at the U. So Tim brought in leaders from Columbia, Wisconsin and Stanford — three places that do tech transfer pretty well - and they said, "You know what? You do what you do as well as anybody in the country."

Last year we received more than $800 million to conduct a wide range of research. That puts us eighth in the country among all public universities in the nation in terms of externally funded research.

Over the past five years, inventions by university researchers have brought nearly $390 million in revenue into the state.

We also try to advance and advocate to improve the business climate. As the only member of the American Association of Universities from Minnesota, we supported and recently helped pass the Leahy-Smith America Invents Act. It streamlines the patent process, reduces costly legal battles and gives the patent office the money it needs to process patent applications more quickly.

To put it simply — you need us. You need a strong and dynamic University to help you succeed.

And we need you. The U needs strong partners and advocates for Minnesota's only research university. I hope I can call on you in making us excellent, and in raising our profile nationally and globally.

There is the big picture and then there is the small story that also reveals the true impact of the University.

At my inaugural last week I told a story about a remarkable young woman from Minneapolis named Ifrah Esse

Ifrah came to Minnesota from a refugee camp in Kenya. When Ifrah arrived in the United States, she was 11. She could neither read nor write Somali, and knew not a word of English.

She graduated in 2008 with a degree in sociology, 12 years after she came to the United States.

Today, Ifrah is a sourcing specialist for Target — her office is just down the street from here — working with vendors worldwide to deliver their goods to stores nationwide.

Three of Ifrah's older siblings have also graduated from the U, including a brother who recently graduated from our Medical School.

Ifrah says the University of Minnesota has become an "Esse family tradition."

We don't do any better than that. We create opportunities for people to create lives and move forward.

It is a touching story. It makes me proud. And it generated a spontaneous standing ovation for her from 1,000 people at the inaugural ceremony.

That's what we do. That's what we should do. And that's what we have to do for the business climate in the state of Minnesota.

Despite such good news about our incoming class and the impact the U can have on one family's life, an issue that continues to concern me is the decline in science, technology, engineering and math — or STEM — education in Minnesota and the United States.

Thomas Friedman, the St. Louis Park native, was on campus a few weeks ago to talk about his new book. The title is "That Used To Be Us."

Clearly, we've got a lot of work to do.

  • In Minnesota, in 2010 test results, only 48 percent of our white students scored proficient on the state's 11th grade math test.
  • Only 40 percent of our Asian students, 18 percent of our Hispanic students, 17 percent of our American Indian students and 13 percent of our African-American students scored proficient.
  • Only 43 percent of Minnesota's fourth-graders scored proficient in a national science test.
  • Only 40 percent of eighth-graders scored proficient, and the racial achievement gap here was also significant.

Think for a minute of the implications for us as a center of innovation, for this state as a job producer, and for our overall quality of life?

By 2035, demographers tell us almost half of the population of the Twin Cities metro area will be people of color. We can't fail now in teaching and learning the basic sciences and math and expect to support a state long known for its discoveries in the health sciences, manufacturing, agribusiness and high-technology to continue to succeed.

The answer to, "Where will Minnesota's scientists and innovators of the future come from?" is unclear.

We need to work very, very hard with our partners in K-12 education.

A report called "Rising Above The Gathering Storm" was commissioned by a bipartisan Congress in 2005. It is six years old, but its relevance and import remain.

The Gathering Storm group was comprised of top-flight CEOs, university presidents and Nobel Prize winners. I encourage you to take a look at that report. It calls to:

  • Vastly improve K-12 science and math education.
  • Recruit annually 10,000 science and mathematics teachers by awarding 4-year scholarships.
  • Strengthen the skills of 250,000 teachers a year through continuing education.
  • Support and grow specialty high schools and open the road to inquiry-based learning via summer internships and research opportunities for middle-school and high-school students.

We have an enormous problem. It's an academic problem.

It is, in the end, a business challenge.

Finally, I'd like to say a bit about University efficiency.

I know that some of you may consider that an oxymoron, University efficiency.

As business leaders, you all are attempting to trim costs in the face of these difficult economic times. So do we.

At the U we have been feeling the effects of deep reductions in state aid. It's a historic trend, and it's not going to turn around very dramatically soon, although I do hope that conversations around value and investment in the U will help us in targeted areas.

By a point of reference, when I was here in 1978, when I began as a Ph.D. student here, did you know that the state supported 43 percent of the University's budget? This year it's 18 percent, and it's going down.

That translates into a need for us to be more efficient and more effective and we've done that and we will continue to do it even better. It also translates into an increase in tuition that students have to pay, and that rate of increase simply cannot continue.

So, it is incumbent on us at the University to act with real urgency to address the way we do our business and deliver our products of education, research and engagement with our communities.

Some of this is really hard. A lot of businesses are much more efficient than they were 30 years ago. But the way we engage with research, the way we bring graduate students in, train doctors, dentists, pharmacists is intensely a hands-on, handcrafted business.

We are going to move on the operational front. We're going to move to bring good common business practices to bear. And, as I like to say, to pick up the pace.

We are a deliberative organization. We will continue to be a deliberative organization. But we're going to get it done a little bit more quickly.

As I said in my inauguration speech, we're going to reduce administrative costs every single year.

So, my goal is to elevate the University's brand statewide, we're going to talk about the University's impact, its value to the people of the state of Minnesota, and to deliver on the promise of that value every day that we're open.

I think it's very logical that this University be in the conversation about the first-rank of American public universities in the United States. We should be in the conversation with Berkeley and Michigan, Virginia, North Carolina and UCLA. We have a scope and a span that's enormous.

We have thousands of dedicated, hardworking and brilliant scientists and researchers, people who discover and create. This is a great university and we're going to be a great partner with the business community in Minnesota.

You will also hear me talk about the need for engagement with some of our friends. Our need for philanthropy, private giving and for partnership with business to leverage our resources is extremely high.

Philanthropy can never replace the fundamental base operating money we get from the state of Minnesota.

But philanthropy can and does take us from good to great.

I think of us as partners and I think we have to continue to be strong and engaged partners. I'm committed to doing that. I look forward to a long and productive relationship with the members of this group.

Thank you.