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2011 State of the U Address: Full Text

March 4, 2011

Introduction: Like No Place Else

For more than 40 years now, I’ve been blessed to build a life here at the University of Minnesota. Spending an entire career at a single institution is unusual these days – some consider it loyalty; the rest assume it simply reflects a lack of other options.

Perhaps both are true, to some extent. I’ve spent little time imagining a different career in another place, because this state and this great University have always felt like home. I love the fall colors reflected on the river, and sunsets on Lake Superior. I love the prairie and the North Woods. I love the way Midwestern stoicism and “Minnesota nice” mix with the passions of people who work hard for a better world. Our friends and neighbors, our leaders and opponents, are not passive – and that pushes all of us to stay engaged and become better citizens.

And this great University is like no other. Why? Because our founders were futurists. They recognized that Minnesota wouldn’t be a frontier forever, so they established an intellectual center for an aspiring state. For 160 years now, we’ve delivered on our mission of education, research, and outreach – and never more effectively than today.

Today, we are active in every corner of Minnesota – combining our research and land-grant mission with innovative campuses, centers, and programs that meet the needs of the entire region. Our focus on the public good has led to a strong sense of ownership – not only among our students, faculty, and staff – but also among the citizens of this great state and nearly a half a million alumni worldwide.

These stakeholders have great expectations for their University. And despite economic stagnation and deep state budget cuts, in the last several years we have outperformed our past, our peers, and nearly all of those expectations.

High Aspirations Matter

How have we achieved so much during such lean times? Above all, we made a system-wide decision that “good enough” is simply not good enough. For years we settled for being a commuter campus and a “safety school” for our state’s best students; we admitted and charged tuition to students who didn’t graduate; and we contented ourselves with whatever external support we could muster. Under the banner of good enough, we were solidly in the middle of the pack – a pretty strong pack, but one that we ought to be leading.

All organizations rise to the level of their aspirations. I’m proud to share that this University has continued to make extraordinary gains – primarily because we raised our gaze toward the future. We anticipated declining state support, changing demographics, intense competition, and a growing demand for accountability.

In 2003, we began an ambitious effort to strengthen our position as a truly world-class university. The stated goal of Transforming the U was to become one of the top public research university systems in the world. Our purpose was to renew our proud heritage of achievement, contribution, and public responsibility. We set “good enough” aside and began to reconnect our present and future with our illustrious past.

Importance of Strategic Alignment

In complex organizations like the University of Minnesota, connections between the past and present ensure continuity during times of turmoil or rapid change. Strategic alignment is essential – between goals and strategies, and between strategies and specific decisions.

E.F. Schumacher insisted, “The policy is in the implementation.” Aspirations and goals are essential, but so, too, are strategic decisions that improve results, impact, and accountability. A university interested in genuine transformation must be disciplined in setting priorities. But just as discipline is critical, so is a courageous commitment to excellence, and the fortitude to assess your progress and adjust your course.

Careful alignment of goals, strategies, and decisions can be difficult to perceive over time. For example, it’s easy to miss the link between tuition strategies, strong financial aid, and improved academic results. In our case, implementing a 13-credit tuition band and providing need-based scholarship support for four years creates incentives for students to take more credits and graduate on time. As a result, they leave with a lower total cost of attendance and less student debt.

Similarly, our decision to emphasize maintenance of existing facilities in our state capital requests has significantly reduced energy use and other costs. Investing in older buildings saves money in two primary ways: first, such projects require no matching funds from the U, and second, renovated facilities enhance productivity and generally cost less to operate.

We have approached other priorities in a similar, integrated fashion. This fall, we announced the Research Infrastructure Investment Initiative, or I3, which leverages technology commercialization revenues to support research needs. Developed by the Office of the Vice President for Research, I3 provides $20M for essential equipment and technical personnel across a broad range of disciplines – including the arts and humanities, social sciences, and natural sciences.

In the past several years, we used existing resources to create matching support for the Promise of Tomorrow scholarship drive. This initiative radically changed private fundraising at the U, creating unprecedented momentum and generating more than $340M in total scholarship commitments in just six years. We then integrated our scholarship emphasis into the stadium campaign to drive success for both academics and athletics. Today, we are building on our success with new fundraising strategies that better align resources with collegiate and campus priorities.

We have also reexamined our administration, shifting positions to address evolving needs and priorities, and discontinuing positions that are no longer needed. While the total number of senior administrators has been relatively constant – 0.4% of our total headcount – we have grown our overall budget by 43%, enrolled thousands more students, granted hundreds more degrees per year, and met additional requirements for regulatory compliance.

Especially in lean times, aligning resources to priorities is critical. For the past several years we have differentially reduced academic and administrative budgets across the University. This practice frees existing resources – as a result, we continue to find ways to make modest investments and move the U forward, despite the hard economic realities faced by the state.

Outperforming Expectations

As I mentioned before, in the last several years we have outperformed our past, our peers, and nearly everyone’s expectations. In order to achieve such strong results, we’ve made key decisions and investments that improve the value, the innovation, the impact, and the productivity of the University of Minnesota system.

Value: Academic Excellence and Affordability

First, we’ve made unprecedented progress with regard to academic excellence and affordability at the U. Each year, we welcome nearly 68,000 students, including 2,000 transfer students from across the region. Each year we produce approximately 14,000 degrees, educating 70% of Minnesota’s advanced health professionals and very high percentages of the state’s graduates in science and technology – as well as dozens of other important fields.

These are big numbers by themselves, but they only tell part of the story. Today, we admit the same percentage of Minnesota high-school graduates we always have, but they are much better prepared for success. Consider, for example, that the number of National Merit Scholars in the Twin Cities freshman class grew from 40 in 2003 to 112 last year. As a result of this improved academic profile and targeted investments in academic support, 91% of Twin Cities students continue after their first year, and four-year graduation rates have roughly doubled in the past decade.

Timely degree completion means we can accommodate more students and produce more degrees system-wide with the same or fewer resources. Since 2000, we have admitted more than 12,000 additional full-year equivalent students statewide. We have grown international undergraduate enrollment by 60%, and we are producing more than 1,200 additional degrees per year than just five years ago. Many of these graduates – regardless of where they came from – choose to live, work, and raise their families here in Minnesota.

We’ve also made a number of improvements to the undergraduate experience in recent years, including the launch of the all-U Honors program, and the opening of the Science Teaching and Student Services building and other science and student-focused buildings system-wide.

Today, however, I want to highlight graduate and professional education at the University – a large part of our enrollment and responsibilities. In the last two years, we have restructured both the Academic Health Center and the Graduate School in order to improve quality and productivity, and reduce costs. This fall, the National Research Council recognized 69 of the U’s doctoral programs, the second-highest number of ranked programs among participating universities. The diversity of ranked programs demonstrates our strength as a center of interdisciplinary work, as well as the impact of targeted investments.

Finally, we have worked hard to ensure that all students are able to afford a University education. Rising costs and declining state support for higher education have required us to generate more of our own revenue even as we cut budgets and control spending. As a result, we have increased tuition, our most stable and predictable source of revenue – but not nearly as much as we have grown student financial aid at the U. The University of Minnesota Promise scholarship, for example, provides substantial need-based support to Minnesota undergraduates on all five campuses – approximately 13,000 students from families earning up to $100,000 per year. As a result of this innovative program and other aid programs, the average net price that Minnesota undergraduates pay to attend the Twin Cities campus has increased less than 3.5% per year over the past 10 years.

In fact, the U’s statewide grant and scholarship support to undergraduate students has grown by 138% to more than $73M. We have also invested more than $37M in financial assistance for graduate and professional students since 2007. As a result, total aid for all students system-wide – including fellowships, grants, loans, and employment – topped $1B this year.

We are grateful to our students and their families for their ongoing commitment to a University of Minnesota education. We are also mindful that steep tuition increases are not sustainable. We must work hard to moderate tuition growth and deepen our commitment to college affordability – but make no mistake: we are approaching a tipping point at which disinvesting in the University will diminish academic quality and productivity.

Innovation: Research and Interdisciplinary Scholarship

Of course, our unique role in Minnesota’s system of higher education extends well beyond education. Since 2004, our research portfolio has grown by 41% – the second-highest growth rate among U.S. public research universities. Now ranked 9th among the nation’s top research universities, in 2010 the U garnered a record $823M in outside research funding. In addition, University-based technologies figured prominently in the launch of 14 new companies in the past 18 months. And gross annual revenues from patent and licensing activity were nearly $84M in 2010.

These are remarkable achievements during this challenging economic period – but our commitment to world-class research and scholarly work is not limited to dollars and ranking. We have also made a conscious commitment to encourage collaboration across academic disciplines in order to address the complex problems of the day. In 2003 we began deeper conversation about interdisciplinary research at the U – and in the past several years, we have improved promotion and tenure policies and invested in flexible research space, clinical research faculty, and new interdisciplinary centers. These efforts have resulted in tens of millions of dollars to support new research. I’d like to take a few moments to share some examples of how this commitment to interdisciplinary research is paying off today:

* In 2003, we announced Healthy Foods, Healthy Lives as one of our initial interdisciplinary priorities. In July 2004 – due to our strengths in medicine, public health, veterinary medicine, biological sciences, and agriculture and food production – the U received a Dept of Homeland Security grant to establish the National Center for Food Protection and Defense. In 2005, we launched the Healthy Eating Research program, with support from the Robert Wood Johnson Foundation. And in 2010, the U received a $7M NIH grant to create family education classes and promote fresh and healthful foods. The School of Nursing has since received another $3.2M to study the effectiveness of such family-oriented, community-based programs.
* Similarly, in 2009, U faculty in veterinary medicine; public health; nursing; medicine; education and human development; and food, agricultural and natural resource sciences; were chosen by USAID to join the $185M RESPOND project – a five-year, multi-disciplinary effort to examine and improve global responses to zoonotic disease outbreaks.
* Building upon the interdisciplinary priority Brain Function Across the Lifespan, Dr. Kamil Ugurbil, director of the Center for Magnetic Resonance Research, has been selected by the NIH to co-lead a $30M international effort to map human brain connectivity – how the regions of the brain interact with each other. Breakthroughs in this area of research may lead to treatments for neurological disorders like autism, schizophrenia, multiple sclerosis, Parkinson’s, and Alzheimer’s.
* Building on the theme of Environment and Renewable Energy, in the last three fiscal years, the Institute on the Environment has leveraged more than $6M in U funds and $13M in pass-through dollars from the state’s Renewal Development Fund, to garner $134.5M in external funding for research and public engagement.

Impact: Statewide Reach and Return on Investment

These are just four examples that illustrate how early interdisciplinary priorities have yielded strong external support and real-world impact. As a land-grant university, the University of Minnesota has a responsibility to connect new knowledge to real-world challenges – and while the nature of our public engagement may change, our fundamental commitment to it does not.

For example, our initial efforts to move Extension to a regional model attracted national attention, but also raised significant concerns from important stakeholders. Ultimately, this shift, coupled with enhanced use of technology and increased collaboration, has enabled us to deliver more cost-effective and targeted Extension services. The U’s Urban Research and Outreach Center, for example, generates new resources and opportunities by partnering with higher education, businesses, government, and the nonprofit community, to address the serious challenges of poverty and limited opportunity in North Minneapolis and other urban communities.

The University District Alliance is also doing trail-blazing work to build confidence in the neighborhoods surrounding the Twin Cities campus. And in both Minneapolis and rural Minnesota, our federally supported network of Area Health Education Centers address critical health workforce needs through strong community-campus partnerships. These efforts attract external support – but they have implications for the U’s education mission, as well. Whatever we do to improve our communities will yield stronger families and better-prepared students, who arrive at the U ready to succeed.

Our campuses have also undergone dramatic transformations in recent years:

* The University of Minnesota Crookston saw its third consecutive year of record enrollment – up nearly 40% from fall 2006. Seven UMC degree programs are now available completely online, with more in the works – and in January, UMC was accepted as the tenth member of the New Century Learning Consortium, a national organization of the highest quality online academic providers. Using federal dollars, UMC has also established a visualization and informatics lab that creates 3-D simulations with applications across many academic fields – one of only two such labs in the Upper Midwest.
* The University of Minnesota Duluth will celebrate the inauguration of its ninth chancellor, Dr. Lendley C. Black, tomorrow afternoon. Chancellor Black took office this past August and has already undertaken an aggressive planning effort with the goal of having an approved strategic plan for the campus by the end of April. Last summer, UMD also opened a $15M state-of the-art Civil Engineering Building, home to a new degree program that meets local and regional needs, as well as the Bagley Classroom, the first Platinum LEED-certified building in Minnesota.
* On the University of Minnesota Morris campus, applications are at a record high for the second year in a row, enrollment is at a seven-year high, and they are breaking campus records for philanthropic support. Morris also continues to strengthen its commitment to sustainability and alternative energy with the construction of a second, federally supported wind turbine. It will join the first public university, large-scale wind energy project in the nation, located at the West Central Research and Outreach Center. Today more than 50% of campus energy needs at Morris are met by wind power. It is anticipated that the new turbine will boost power production to 70% on average, and as high as 100% under ideal conditions.
* The University of Minnesota Rochester continues to grow its innovative undergraduate and graduate programs with the goal of enrolling 1,500 students within the next decade, and a continued focus on health-related degrees and professions. A public-private partnership for academic space and student housing will be ready for occupancy in Fall 2011, and a downtown site has been selected for a permanent campus. Our newest campus is growing through new academic partnerships and programs that meet the needs of southeast Minnesota and continue to garner international attention.

The effect of the U’s statewide reach and three-fold mission is deeply personal to people and communities who benefit from it directly. But even in simple economic terms, the impact is truly staggering. A recent study, commissioned by the U and conducted by Tripp-Umbach, found that:

* For every $1 invested in the U, more than $13 are returned to the state of Minnesota.
* U research alone generates $1.5B in statewide economic impact and supports nearly 16,000 jobs.
* All told, the U directly and indirectly supports nearly 80,000 jobs for Minnesota citizens and Minnesota’s economy.
* The U also generates more than $512M in tax revenue for the state of Minnesota.
* All of this, plus direct and indirect spending associated with the U, brings our estimated statewide economic impact to $8.6B per year – not bad for a $591M state investment!

Productivity: Management and Stewardship

As I told legislators last week, we have achieved these historic gains even as our state support has been reduced to 2001 levels and now comprises less than 20% of the U’s overall budget. Thanks to careful, proactive planning:

* We have reduced our workforce largely through innovative voluntary retirement incentive programs and normal attrition.
* We have substantially reduced energy use despite growth in facilities.
* And we have cut more than $6M per year out of purchasing and procurement in the last year alone.

We have also decreased maintenance and custodial support; cut successful but non-core programs; consolidated or eliminated colleges, centers, departments, and offices; closed Extension offices; reduced course offerings; and raised course caps.

Although our budget is substantial, we manage it less like the state or federal government, and much more like a typical Minnesota family or business. For example, unlike government agencies, or the state as a whole, we generate most of our own funding through the work that we do – and we balance our budget every year. We are cutting spending to the bone, reducing or postponing critically important investments, and once again facing a wage freeze and changes to benefits.

We are doing more with less – and we have been doing so for years!

The Road Ahead

In fact, doing more with less has been a frequent refrain over the past several years, as has my personal appeal for a renewed covenant with the state of Minnesota. This covenant would include more consistent state investment in higher education, agreed-upon goals and measures, and more modest and predictable tuition increases for Minnesota families. It must also address the distinct missions of our two public systems of higher education – the University of Minnesota and MnSCU – as well as the mutual benefits and cost savings to be achieved by delivering on our missions in a more rationalized, cohesive, and coordinated manner.

At the request of Republican leaders – and on the heels of state reductions of more than $111M in the past two years – last week I testified on the catastrophic impact of additional cuts as high as 20%. This course, in my judgment is not sustainable. Given the new economic, demographic, and political realities we face, a longer-term covenant for higher education is absolutely imperative – but it is unlikely in the near term.

So what can we do? I believe we must continue to earn the public trust by demonstrating our willingness to be partners for the public good. This, too, has been a recurring theme over the past several years, beginning with my inaugural address. In my view, we have five near-term opportunities to demonstrate our value and ensure that our stakeholders continue to support the University.

First, we must fervently support a statewide vision for discovery and innovation. Last year the Legislature established the Minnesota Science and Technology Authority – and in January, the Authority’s advisory commission presented its economic development strategy. The U has been well represented throughout this process – and we must continue to be creative thinkers, engaged leaders, and willing partners as the state moves forward with this critically important effort.

Second, we must continue to strengthen Minnesota schools, in order to improve the education pipeline and close the achievement gap. By 2018, 70% of Minnesota jobs will require post-secondary education – clearly, college readiness and attainment must be the educational standard for the 21st Century. In the late 1980s, education leaders announced recommended preparation requirements for entry into Minnesota’s colleges and universities. This action encouraged students to pursue a more rigorous high-school curriculum – the strongest predictor of college persistence and graduation. Today, the U’s College Readiness Consortium is building on that progress – increasing the number and diversity of Minnesota students who graduate with the knowledge and skills to succeed in higher education, the workforce, and civic leadership.

Third, we must increase the affordability of a college degree. I doubt that we will return to the halcyon days of greater state funding, so we must continue to increase private scholarship support, reduce costs, and invent new possibilities. Let me make a modest proposal for improving college readiness and reducing college costs. Minnesota has an extraordinary framework of programs that enable high-school students to take demanding college classes, including Post-Secondary Education Options, College In the Schools, International Baccalaureate, and Advanced Placement courses. Last year, nearly two-thirds of U freshmen arrived on our campuses with some college credit, and the average number of credits was 18. When these credits meet University degree requirements, they reduce time-to-degree, and as a result, college costs. The University should work through the Minnesota P-20 Partnership and other avenues to develop a strategy to encourage many more high-school students to earn college credits toward a degree. This approach would not only improve their college experience and potentially reduce costs, but would also strengthen the academic culture of our high schools and communities.

Fourth, we must foster deeper partnerships, with business and industry, local neighborhoods and communities, and other higher education partners. Countless private-sector entities and other institutions use our equipment and facilities to advance their own work every day, and the University Libraries are working to better connect external stakeholders to U resources and expertise. Initiatives like the Minnesota Transfer Curriculum, the Minnesota Learning Commons, and GradUate Minnesota – which facilitates degree completion for former college students with more than 90 credits – demonstrate that the U and MnSCU can work together for Minnesota students. In fact, during the past 10 years the number of academic partnerships between the U and MnSCU has grown from 60 to more than 200.

Finally, we must continue to measure what we value and communicate results. In the last few years, we have made a concerted effort to monitor and improve performance by referencing a consistent set of key measures, and our important contributions, in a consistent framework. We must communicate clearly the value and impact of what we do in order to rally the support of our very best advocates: the citizens of this great state.


Conclusion: The Bright Horizon

Transformational change in an organization of the size and complexity of the University of Minnesota requires talented and committed people who are willing to work together. Our successes are shared among all of you – those who participated directly in the strategic positioning process undertaken in 2004, and thousands more who have implemented significant changes in the years since. I also want to thank past and present members of the U’s Board of Regents; my executive team, chancellors, and deans; and faculty, staff, and student leaders; for their service, engagement, and support.

President Franklin Roosevelt once reminded the people of this great nation, “We have always held to the hope, the belief, the conviction that there is a better life, a better world, beyond the horizon.” We must remind ourselves, and the people of Minnesota, that we are driven by that same hope – by our aspirations to be something greater than we are today. Together, we can ensure that Minnesota remains emblematic of the best our nation has to offer – and we should take great pride in our efforts to set high expectations and seek that bright horizon each and every day.

Thank you.

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