The University's Role in Economic Development

Thank you for inviting me here. I am pleased to meet with you today.

Economic development seems to be on everyone's mind these days, so I thought I would take this time to share with you some of the ways that Montana State University impacts the economic health and vitality of our local community, as well as the state as a whole. My background in the private sector gives me, perhaps, an even greater appreciation of the opportunities that higher education has to enhance the economic base of the state.

When Montana State University was founded as the state's first public institution of higher education in 1893, there was a great deal of talk about the intrinsic value of education and the need for Montana to grow and prosper. People who supported the idea of a university, especially a land grant university, also saw that a public institution would provide jobs, which would benefit the local economy. Probably few realized that in time MSU would become a major economic engine for all of Montana.

There are four primary ways that MSU campuses impact the economies of the local communities and the state as a whole. First, by operating as a business enterprise we help create jobs, purchase materials and services from Montana companies, and bring in out-of-state dollars; second, by providing a skilled workforce to Montana employers and preparing entrepreneurs to create their own businesses; third, by facilitating the commercialization of products and technologies; and fourth, by providing services to help Montana businesses develop and prosper.

As a business enterprise, some of the numbers from our Bozeman campus help quantify our impact. We provide 2,117 full-time jobs and spend $43 million on goods and services purchased in state, of which $24 million is spent in Gallatin County. We spend $54 million in federal and private grants. We also bring nearly $15 million in out-of-state tuition and over $6 million from out-of-state visitors into the economy. These visitors include parents, conference attendees and athletic event attendees.

To prepare a skilled workforce, the Bozeman campus spends $5 million per year in direct support of students engaged in research. Our Undergraduate Scholars Program provides hundreds of students research opportunities in fields related to their career plans. Among other things, they learn to operate state-of-the-art equipment that expands their skill base for engineering and science careers. Over 300 students held internships last year with local businesses. This better prepares them for a competitive job market and can lead to permanent employment with these companies after graduation.

Through technology transfer programs we have delivered over 20 publicly released crop varieties to Montana producers in the last 10 years. One example is McNeil spring wheat, with 1.5 million acres grown in 2000 and an increased yield of 1 bushel/acre, producing $4.5 million in additional income. We own 29 patents and have 99 pending. We have licensed 42 new technologies, of which 24 are with Montana companies. As an example, new hard winter white wheat has been licensed to General Mills in Great Falls to produce noodles for the Japanese market.

Our business assistance programs are making a difference. The Montana Manufacturing Extension Center (MMEC) has provided engineering and managerial assistance to over 350 Montana manufacturers. Gibson Guitar, a Bozeman business, saw results from the assistance of MMEC that included labor hours per unit being reduced from 15 to 11.5 hours, scrap costs that were cut in half, processing time dropped from 7 weeks to 15 days and their revenue increased by over $1 million in just one year. Overall, the impact of MMEC has resulted in the creation of 304 jobs in Montana in the last 2 years, with a payroll increase of $5.6 million.

Another of our programs, TechLink, helps area businesses form partnerships with federal laboratories for commercialization of technologies. It has helped 31 Montana companies access NASA/DoD technology, another 10 Montana companies secure $11 million in funding for new technology development and has provided seed grants of almost $1 million to 38 Montana companies to assist in development or commercialization of new technologies. One example is Montana Microbiological Services. Through TechLink they learned of NASA's need for technology to monitor water safety on manned space missions and received a $70,000 NASA contract to develop and commercialize this technology. Another example is Trout Headwaters of Livingston that specializes in the creation, restoration and enhancement of streams, lakes, and ponds. TechLink facilitated a partnership between Trout Headquarters and the U.S. Army Corps of Engineers to develop software for modeling stream bank stabilization. They received a $120,000 award from the National Fish and Wildlife Foundation to commercialize the software.

TechRanch, a business incubator located in the MSU Research Park, provides support to entrepreneurs planning to start a new business. They provide assistance with investigating commercialization and market opportunities, obtaining start-up capital and developing management skills.

A new program, the Center for Entrepreneurship of the New West, partners closely with TechLink and TechRanch. The Center utilizes MSU students to provide assistance to start-up businesses and assist MSU scientists in developing the commercial potential of their product or service. The Center works with the College of Engineering and College of Agriculture to seek out research that can be commercialized. Through this program, students from any curriculum can earn a minor in "Entrepreneurship and Small Business Management" -- a key way we're training the entrepreneurs of the future.

I should also mention that we are currently partnering with the Bozeman Chamber of Commerce to offer a Workforce Academy for local businesses. This is a program designed by the U.S. Chamber of Commerce to help businesses recruit and retain qualified employees. This program is coming to our area in May and you'll soon see information on the details.

It's obvious that higher education is playing a critical role in building a base for future economic growth in Montana. We have great examples of the partnership opportunities that surround us -- and the future holds the potential for even more collaboration, built on the mutual interest of the Montana University System and the business community in the economic prosperity of our state.