Speech at the Governor's Job Summit

Tuesday, October 25, 2011

I have the answers.

I have the answers to the fundamental questions we're all asking here today:

  • Where do jobs come from?
  • And how do we create the jobs that Minnesota will need to succeed in the 21st century?

I'm not shy about answering these.

Because the answer is the same: public higher education, our friends at MnSCU and the University of Minnesota.

We deliver jobs for this state.

The University of Minnesota is are our state's only public research University, where innovation is a major part of our business and discovery is an essential platform of our mission.

We educate thousands of your future employees. We employ thousands of the state's most creative thinkers and problem solvers.

We fuel Minnesota's workforce with our state's best and brightest.

Did you get a chance to tour the Innovation Hall?

When it was announced last week that 13 innovative companies were to display their products and services, we looked into it.

Ten of the 13 either had their science developed by University-linked scientists or were awarded Minnesota Cup innovation honors by the University or were started or led by U grads.

Amazing … 10 out of 13.

As the state's primary research institution, the University of Minnesota receives 98 percent of all federally-sponsored research grants awarded to colleges and universities in the state of Minnesota.

Research drives innovation, discovery, cures, medical devices, high tech inventions, food safety, transplant science, national defense products, manufacturing advancements ….

Research drives jobs.

We are the economic and innovation engine in the state.

Job creation begins with an idea or discovery, and the seed grows.

In the recent statewide survey conducted by the Minnesota Science and Technology Authority, leaders across the economic, scientific and educational spectrum agreed overwhelmingly that:

  • Innovation and a statewide innovation plan are the keys to economic growth;
  • And that educating, retaining and attracting high-level science and technology talent is critical.

We at the University are already doing our part.

We produce intellectual property that we license to existing companies or that forms the basis for new startup companies. And we do it responsibly, mindful of the rewards and risks of startups, always thoughtful in using public dollars to support new enterprises.

Startup companies play a critical role in job creation in today's economy.

Just in the past two fiscal years, 16 startup companies have been created from University IP. They were 16 companies with special promise that we supported.

All businesses - indeed, all organizations -- 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 workforce concerns that you have as business owners, leaders and policy makers; how to retain, develop and retain talent, rising health care costs, and the like.

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 simply come apart.

And we are training some pretty spectacular people these days.

Let me tell you about Sam Schreiner, of Lino Lakes. I had lunch with some students in our Honors Program recently, and he was there. A senior, he's in the marching band, has spent two years in the space physics department evaluating satellite data, did study abroad in China and has already been named a prestigious Astronaut Scholar, a grant given by former astronauts.

Yes, he's a rocket scientist, and he's ours.

Then there was Erin Diamond, a sophomore from a small town near - I'm afraid to say - Green Bay, Wisc. Erin started doing research as a freshman in the Department of Speech, Language and Hearing Sciences, is working on research on autistic language processing and is being trained as an MRI operator.

Spectacular future employees of yours.

Those are two special students, but let me tell you about our entire incoming freshman class, which is, by all measures, the best qualified group of first year students in U history. It is totally special.

40,000 applicants. 5,378 enrolled.

Highest ACT scores ever. Most National Merit Scholars ever, and, we believe, the most National Merit Scholars among public universities in the Big Ten.

That's not National Merit finalists or semi-finalists. That's Scholars.

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.

Just two weeks ago we announced that we are going to grow our undergraduate enrollment by 1,000 students, many in the critical areas of Science, Technology, Engineering and Math, or STEM, and nursing.

We are responding to employer demand.

From 2005 to 2011, applications to our College of Science & Engineering and the College of Biological Sciences rose by about 240 percent. As we increase the number of students, we are increasing the standards for admission.

We are doing our part.

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

But it's not only about STEM.

Our students are the top young communicators graduating in Minnesota, accountants, social workers, political scientists, Spanish and Chinese language majors, and dancers.

All important to your workforce because thoughtful liberal arts majors become decisive leaders and entrepreneurs.

Our selectivity is not coming at the expense of Minnesota students. We're not turning down Minnesota students in favor of out-of-state or international students.

This year, 64 percent of our freshmen graduated from a Minnesota high school and that percentage has pretty much held steady over the past decade.

But we also bring students from other states and across the globe. We plan to continue that trend and increase somewhat students from other states, which grows diversity of all kinds.

We are a talent magnet. Most of the students who come to the U to study end up finding jobs and staying here in Minnesota.

  • A 2006 survey by the Alumni Association found that U alumni had started nearly 10,000 companies in Minnesota.
  • Of those company founders, 23 percent had first moved here to attend the U.

Combined with the high-tech, health sciences and the business energy we create, the U is also a cradle for the arts and humanities. Together, this helps to make the Twin Cities a cultural magnet within our region, and within the nation.

When Governor Dayton spoke at my inaugural last month, 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 - their hometown team -- the economic impact of all those schools was about $7 billion annually.

Last year, our impact was estimated at $8.6 billion. Pretty impressive.

Gov. Dayton put that statistic 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 all need to take a little bit better care of our "basket," our only major public research university.

The governor profoundly declared something else last week at the Minnesota Business Partnership's annual meeting.

Speaking to business leaders, he said: "I have told President Kaler: 'No more money for mediocrity.' "

I agree totally. No more mediocrity.

But more priority setting. More investment in the research enterprise. More jobs.

Here's why:

University Vice President for Research Tim Mulcahy's office recently received an email from Dan Mahlmstrom - the CEO of Douglas Scientific, which is located in Alexandria.

Dan wrote that his company has been able to attract great talent, but - quote:

"Our chief bioscientist is from India. Our brightest systems engineer is from Pakistan. We recently hired a superb electrical engineer from China. We are bringing another engineer back on board next week from India."

The Pakistani systems engineer, by the way, is in a Ph.D. program at the U.

Dan then wrote:

"The key point is that we have a pressing need for very high-end technical capability. As a small Greater Minnesota company that is competing on a global basis, we would find great advantage if such talent were more accessible in Minnesota."

By adding STEM undergrads, by building a new Physics and Nanotechnology Building … we are doing our part.

But we all need to do more.

I know the U has been criticized for being slow and sometimes unresponsive. I get that and I hear that. I gather that a few years ago members of the business community often felt all they got from the U was unanswered e-mails, or blank stares.

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

Under Vice President Mulcahy's leadership, we have moved forward tremendously to enhance commercialization of University-based technologies and facilitate and enrich University-business interaction.

Tim has stepped up our game over the past several years, hiring staff with industry and small company experience, and promoting entrepreneurial development. The Office of Business Relations was created 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.

We're pretty self-critical, too, at the U.

Tim recently brought in tech transfer leaders from Columbia, Wisconsin and Stanford - three places that do tech transfer pretty well - and they said, "You do what you do as well as anybody in the country."

Last year, in a highly competitive environment, 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 externally funded research.

These results are a testament to the quality of U faculty and the cutting-edge research that is being conducted across our five campuses.

We also advance and advocate to improve the business climate.

Tim Mulcahy and Professor Art Erdman served on the advisory commission that drafted the Minnesota Science and Technology Authority Strategic Plan.

We were a strong supporter of the angel investor tax credit that was recently passed by the Legislature.

As the only Minnesota member of the Association of American Universities, we supported and recently helped pass patent reform measures in Congress.

The University's history of health sciences, agricultural, mining and high-tech discovery is rich and world-changing …

And today, in labs a few exits away on I-94 from here, we are investigating food safety, Alzheimer's, diabetes, heart disease, cancer, and childhood illnesses of all kinds.

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

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 …
  • if we 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 state's business climate will tumble with it.

That … I can guarantee.

Let me turn now to an issue that deeply concerns me - and that has great impact on job creation.

It is the decline in science, technology, engineering and math - or STEM - education in Minnesota and the United States.

Scientific innovation is key not only to our state's and nation's recovery from the current economic crisis, but to our very future.

Statistics about Minnesota's high school students are alarming. We have an emergency on our hands.

  • 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.
  • The Minneapolis public schools' high school graduation rate was about 73 percent in 2010, down from 76 percent a year earlier.
  • But no minority group had a rate of high school graduation higher than 60 percent.

Studies show that by the year 2018, 70 percent of the jobs in Minnesota will require a post-secondary education.

But we ranked 48th in jobs for high school dropouts. And, remember, about 40 percent of our students of color in Minneapolis are dropping out.

We can't fail now in teaching and learning the basic sciences and math and expect to support a state long known for its inventions and discoveries.

By 2035 more than one-third of the citizens in the Twin Cities metro area will be people of color.

Yet, today, our state has one of the nation's largest achievement gaps between students of color and white students from kindergarten to twelfth grade, and that extends to a gap in higher education.

If we are to prosper in the future as a state, it is incumbent upon all of us to close this achievement gap.

Our statewide educational situation cries out for an answer: "Where will Minnesota's innovators of the future come from?"

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

It's an academic problem. It is a business challenge, and, in the end, a jobs challenge.

The University will do its part to respond.

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

We must.

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

In 1978, when I began as Ph.D. student here, the state supported 43 percent of the University's budget. This year it's 18 percent.

That translates into a need for us to be more efficient and more effective. 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.

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.

At the same time, you should know that, on the research front, we have been prudent stewards of our revenues. In the case of Ziagen, the anti-AIDS drug that was developed on campus by our scientists, we have reinvested the proceeds of that discovery into graduate fellowships, the important and necessary laboratory infrastructure for other scientists, and for other University research initiatives.

One of my goals as President is to elevate the University's brand statewide, nationally and globally.

We're going to talk about the University's impact, its value to the people of the state of Minnesota, and we're going to deliver on the promise of that value every day.

We should be in the conversation with the nation's great public universities, Berkeley and Michigan, Virginia, North Carolina and UCLA. We have a scope and a span that's enormous.

The University's value increases the profile of the entire state.

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 very good to truly great.

We are a very worthy investment. The U must be a priority to policy makers and business leaders.

We … are … where … jobs … come … from.

Now, in closing, I know that we are all eager to hear Michael Mandelbaum speak. The title of his and Tom Friedman's book is quite chilling: "That Used To Be Us."

Many Minnesotans continue to harken back to the so-called "good old days," and remember the iconic cover of Time magazine with Governor Wendell Anderson holding up the Northern Pike, and with the headline: "The Good Life in Minnesota."

But I don't look back. And I don't think any of us should.

When I see this state's and our University's pride and tradition for innovation and discovery, I see it only through the front window.

I see all the new products and potential at the Innovation Hall.

I meet entrepreneurs, scientists, thought leaders and brilliant young people in our state everyday.

I'm confident that - with gatherings such as this - we will work together to

  • find solutions,
  • to prosper,
  • to create jobs amid startups and small businesses,
  • to grow the clusters of expertise that we own.

I greatly enjoyed reading that USED TO BE US.

But let's vow together to embrace the entrepreneurial spirit, and to declare: "that WILL be us!"

And I pledge that the University of Minnesota - its students, faculty, staff, researchers and alumni --- will be in the middle of lifting up and advancing the state of Minnesota.

We at the University will … as always … DO OUR PART.

Thank you.