Remarks to the Rochester Rotary

Thursday, July 19, 2012

Thank you very much. Greetings to area legislators and other elected officials. Two of my bosses from our Board of Regents—Regent Patty Simmons of Rochester and Regent Rick Beeson of St. Paul—are here. Please welcome them. And greetings to my good friend and colleague Chancellor Stephen Lehmkuhle. Steve has been a masterful leader and visionary in crafting the future of the University of Minnesota, Rochester—moving this unique institution forward with innovation, with charm, and with humor. In fact, perhaps you’ve heard that the chancellor has agreed this coming Saturday to be part of a comedy performance called: “The University of Minnesota in a Shopping Center: You’ve Got To Be Kidding.”

I can’t wait. Seriously, Chancellor Lehmkuhle, thank you for all you’ve done for UMR and the entire University system.


I am here today to tell you the University of Minnesota’s story. I will keep it to five brief chapters so that we have lots of time for a good question-and-answer/conversation session.

Let’s begin with Chapter One: The Research University, Its Role in Innovation and Discovery. This is a chapter marked by the essence of true lifelong learning: the power and energy of curiosity, and the creation of new knowledge and understanding. People often wonder: What is a research university? And what do we really do? They might think of some things we’ve done in the past—from the first pacemaker to the invention of the black box on airplanes to the development of new apples or strains of wheat.

But right now, at this moment, our faculty, researchers and students are engaged in experiments and projects to change this state, this region, and our world. How? We help cure diseases, we develop treatments, we create new technologies, and—FUNDAMENTALLY—we work to solve some of the most pressing social problems we face as a state. Let me tell you about just a few of them.

Just this morning, I met with some of your local legislators, and I was accompanied by two leaders of the University’s Center for Transportation Studies, a vibrant research hub. Our researchers gave an informative presentation about the work we do to help communities ensure road safety and save lives, particularly in Greater Minnesota. Last week, the Legislative-Citizen Commission on Minnesota Resources recommended the Legislature invest $8.7 million in the U to develop a research center aimed at combating such invasive aquatic species as Asian carp and zebra mussels. George Lake, Lake Zumbro, Winona Lake, the Mississippi near Wabasha, these are just a few of your nearby affected waters. To whom did the state turn to solve this environmental crisis?

The University of Minnesota. We are the only institution in this state with the experts and resources to conduct such urgently needed research for our tourism industry, our millions of anglers, and our public health. Or take Associate Professor of Ecology, Evolution, and Behavior Mark Bee in our College of Biological Sciences. He is studying how frogs can find each other through sounds and hearing to mate…despite all the background noise in their swamps. Sounds pretty sexy, right?

But his research is not really about the intimate lives of frogs. Professor Bee is studying frogs so he can translate such auditory research into helping develop more sophisticated hearing aids for humans. Meanwhile, our researchers in our Biomedical Discovery District are zeroing in on cures for diabetes—in partnership with colleagues at Mayo—for Alzheimer’s and childhood diseases. Scholars in our College of Education and Human Development are researching the effects on National Guard families when a parent or spouse is deployed to Iraq or Afghanistan…and the challenging effects when that soldier returns. It is the largest study of the effects of deployment on families, and those families are so thankful for our work. As the son of a Vietnam War veteran, I know this research is important.

Intellectual property discovered, invented, and developed at the U has hatched 30 startup companies in the past five years. This has been during a very challenging economic environment when our state has needed every job we could create.

One such startup resides just south of here in Rushford, in neighboring Fillmore County. Rushford Hypersonic is using technology developed by and licensed from the University. It was Minnesota’s first rural nanotechnology company, creating jobs in a town very much in need of them. In Minnesota, we are the state’s ONLY comprehensive, public research University. We tackle problems, and we bring the solutions to the marketplace or to communities across the state…all for the public good.


This leads to Chapter Two: The University of Minnesota’s Economic Impact and Our Human Capital Impact. This is a chapter that expresses the deep value and return on investment in the U…be it for the state, or for students and their families. An economic impact study conducted two years ago found that the University of Minnesota generates $8.6 billion a year in economic activity in the state. That means we return $13.20 to the state’s economy for every dollar in funding we receive from the state; 13:1. Not too shabby.

But we deliver more than monetary impact. We deliver human capital that fuels the vitality of your community. We graduate more than 80 percent of the state’s new physicians—with the rest graduated right here at Mayo. By the way, 183 physicians and scientists who work here at the Clinic have professional or advanced degrees from the University’s Medical School and other schools and colleges in our Academic Health Center. We graduate ALL of the state’s new veterinary, pharmacy, and dental grads.

Our businesses need an educated workforce, and we supply it. Our College of Science and Engineering reports that 95 percent of our B.S. graduates had jobs in their field of specialization or were in graduate or professional school within six months of graduation. Eighty-five percent of our Carlson School of Management graduates—and I mean students with four-year bachelor’s of management degrees—get jobs within 90 days of graduation in such industries as accounting, financial services, investment banking, health care, and manufacturing. And about 80 percent of those Carlson School graduates go to work for companies here in Minnesota. Eighty percent.

Let’s look at IBM, right down the road here. We’re told there are about 3,000 employees there now. Of those, IBM reports 570 have University of Minnesota degrees. And, as you all know, UMR is charting a new, innovative and efficient path to prepare professionals for the ever-changing health care industry. Our biomedical informatics and computational biology programs are interdisciplinary and supplying experts in one of the world’s fastest-growing fields.

It’s a spectacular example of crafting world-class education for the jobs of the future. So, if anyone asks about the high-level talent supply chain fueling Minnesota businesses, tell them about the University of Minnesota.

Which leads to my Chapter Three.

After all that good news, I’m afraid there is a sad chapter. This chapter is titled: Unsustainable Disinvestment. This is a chapter filled with danger.


We have long claimed to be a national model for education…the “Minnesota Miracle” and all that. But now we are substantially lagging behind the rest of the nation in funding for higher education. I know these are tough economic times. I know higher education has been cut in most states. I understand we are not alone.

But the average reduction of state appropriations for higher education across the nation—in all 50 states—over the past decade has been 20 percent. That’s bad enough. In Minnesota, it’s been 35 percent. AGAIN: The average cuts in other states, 20 percent. In Minnesota, 35 percent. Over just the past three years alone, we’ve seen the state reduce its investment in the University by 20 percent.

But don’t just listen to me. Listen to Greg Page, chairman of the Cargill Corporation. He spoke to Regent Simmons and Regent Beeson and their colleagues last week. Greg has been the chair of the Itasca Project’s Higher Education Task Force, a high-level group of Twin Cities community leaders. He said this—not me. The CEO of Cargill told Regents last week: “For higher education to be an ongoing source of prosperity and competitiveness for Minnesota, the funding of our students and institutions must be brought to a solid and sustainable path.”

Why? Because the sort of research I mentioned a few moments ago and the kind of expertise we attract and must retain just won’t be possible without adequate and sustainable state funding of the University. In fact, our state funding is now below 1997 levels…by more than $127 million! And that despite the fact we have more students, more campuses, more graduates than ever before…and completing their degrees in a more timely fashion. We have higher energy costs, higher health care costs, and higher infrastructure maintenance and renovation costs, just like any business. But today we are graduating students more efficiently with less state money than we did 15 years ago, 13 percent more efficiently.

What’s the impact of this state disinvestment? A dramatic shift in who pays for the cost of educating a top-flight student. Today, families are picking up a larger portion of the tab than ever before. That means higher student debt and higher tuition. And that’s probably the most critical issue facing students today.

When I was a student, the state funded 40 percent of our budget. Now, it’s down to 16 percent.

The reality of diminishing state support means we at the University need to operate more efficiently, more effectively and in a more entrepreneurial manner. I believe in that. I am committed to that. Frankly, we need to change our business culture at the U. One of my main initiatives in my first year on the job has been operational excellence. It has been to combat what I call ESPs…Extremely Stupid Procedures. Right now, we have more than 240 items on the table to examine, from how we pay for and inventory items to whether we can consolidate jobs across different colleges.

How can we change what we do? How can we stop some things we’ve always done? We are in the process of trimming at least 10 percent of the academic centers and institutes that have proliferated on campus. We are about to examine every academic department to see which ones are up to top-flight national standards, and which ones aren’t. In our Fiscal Year 2013 budget, the University’s operating costs will rise just 1.5 percent, or half the rate of inflation last year. And despite the severe state cuts, we will increase tuition for undergraduate residents by 3.5 percent—the lowest increase in the 21st century. It’s a smaller percentage rate increase than our friends at MnSCU, and a far smaller percentage than most of our peers nationally.

But, if we want to reduce the burden of student debt, we must hold tuition down. That means we need to reinvigorate our partnership with the state and begin to reinvest to keep tuition low.


Which leads to Chapter Four. Its title is: We are Good. We are very good. I know, in Minnesota “above average” is important and, even, sometimes, acceptable. It’s a Minnesota thing that we don’t brag. I mean, if Texans lived here this would be the state of 30,000 lakes. We’re the only state that rounds down.

But, our researchers make us the eighth-largest public research university in the country as measured by our ability to win highly competitive federal research grants. But we’re the nation’s 21st most populous state. As I like to tell our National Wrestling Coach of The Year J Robinson, “We wrestle above our weight.”

Our schools and colleges of law, pharmacy, public health, veterinary medicine, public affairs, dentistry, and management are all nationally ranked. Sixteen of our programs are in the Top Ten of their fields. Our incoming freshmen on the Twin Cities campus this fall will have the highest ACT entrance exams in University history, with our honors students having higher ACT scores than students admitted to Carleton and Macalester. Still, on the Twin Cities campus, our incoming class will be comprised of about 62 percent from Minnesota high schools, about the same percentage we’ve had in place for the past five years, and a higher percentage of in-state freshmen than most Big Ten institutions. But you know what?

Applications to the Twin Cities campus are up 110 percent over the past decade. We are in demand, even though our freshman class headcount has remained relatively constant. Top students who used to leave the state to go to college are staying because we are so good. One other thing: The University accepts about 3,000 transfer students every year from MnSCU institutions. Last fall, 49 came from your own RCTC and 31 from nearby Winona State.


Finally, let me close with Chapter Five: Local Impact and Statewide Footprint. This is the chapter about the University’s wide and deep footprint, touching all 87 counties, impacting every legislative district. The impact of the University of Minnesota on Rochester and all of southeastern Minnesota is quite remarkable. We keep track of this stuff.

Right now, there are more than 1,300 University students who list Olmsted County as their home. There are 4,800 alumni who live here and who earned nearly 6,300 degrees…obviously many with advanced degrees. We have 153 University employees here, and we believe our economic impact in Olmsted County generates more than $18 million a year to your economy. Our partnerships with the Mayo Clinic are historic, deep, and special. The globally recognized Minnesota Partnership for Biotechnology and Medical Genomics was formed in 2003 as a unique collaborative venture among Mayo Clinic, the University of Minnesota here and in the Twin Cities, and the State of Minnesota. The Hormel Institute in Austin—which is a research unit of the University—is a leader in cancer and chronic disease research. And IBM and its Blue Gene/L—the world’s fastest computer—has joined forces with the Hormel Institute and the University of Minnesota Supercomputing Institute to accelerate cancer research discoveries.

As for UMR, I think you’ll all agree, this campus—this source of academic, medical, and cultural energy—has changed Rochester, and for the better. The success of UMR could not have happened without you, the leaders and citizens of this great community. I thank you for that. I know in the past—through the proceeds of the city sales tax—this community has thoughtfully and generously supported UMR. We wouldn’t be gathered here in this great facility today were it not for this community’s profound and progressive commitment to higher education. I hope you will continue to support UMR and the other key assets in your community come November.

So, when we add up my five chapters, the University of Minnesota’s story is quite simple. We are a talent magnet and a talent nurturer for our state’s employers and communities. We are a cultural engine. We are an economic engine. Together, we must ensure that the University of Minnesota retains its strength, its power, and its impact on the state of Minnesota, on Rochester and, frankly, on the world. That’s what I’m working to do every day. I can’t do it alone. I hope you will help. Thank you.