The University's Role in Economic Development

Thank you for inviting me to your meeting today. I am pleased to be here. I have been asked to speak on the topic of economic development. My background in private sector gives me perhaps an even greater appreciation of the opportunities of higher education 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 and benefit the local economy. Probably few realized that in time, however, 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, MSU helps to create jobs, supports Montana companies by purchasing materials and services, and brings new money into the economy through out-of-state dollars. Second, we provide a skilled work force to Montana employers and prepare entrepreneurs to create their own businesses. Third, we facilitate the commercialization of products and technologies. And fourth, we provide services to help Montana businesses develop and prosper.

MSU as a business enterprise

MSU's impact as a business enterprise in Montana is demonstrated by an impressive set of economic figures, such as:

• MSU provides 2,117 full-time jobs in Bozeman and 915 full- and part-time jobs in Billings. MSU-Billings is the sixth largest employer in Billings.
• The four MSU campuses collectively provide $53.1 million in-state purchases.
• Through an intense competitive process, MSU brings over $60 million in federal and private grant funds to the Bozeman campus and over $2 million to the Billings campus.
• We bring in over $14.9 million in out-of-state tuition in Bozeman and $1.4 million in Billings.
• Out-of-state visitors have brought $6.1 million to the Bozeman community and $831,000 to Billings, through visiting parents, conference attendees, tournament attendees and other participants in campus events and activities.

Preparing a skilled work force

The MSU Bozeman campus spends $5 million per year in direct support of students engaged in research.

Our undergraduate scholars program provides hundreds of students with research opportunities in fields related to their career plans. They learn to operate state-of-the-art equipment that expands their skill base for engineering and science careers.

Over 300 of our students held internships last year, which better prepares them for a competitive job market and can lead to permanent employment with the company after graduation.

The MSU College of Business in Bozeman has a new Center for Entrepreneurship that provides support to entrepreneurs through evaluation of commercialization opportunities and market potential, facilitation of partnerships with TechRanch, our Bozeman business incubator, and assistance with management skill areas.

Technology transfer

Through our agricultural programs, over 20 new crop varieties have been publicly released to Montana producers in the last 10 years. McNeil spring wheat is one example of this success. Over 1.5 million acres of this crop were grown in 2000, with an increased yield of 1 bushel per acre over traditional varieties, for $4.5 million in additional income.

Our research programs have produced substantial licensing activity. To date, we've had 29 patents issued and have another 99 pending. We've had 42 technologies licensed, of which 24 are with Montana companies.

We've also had eight plant variety protections issued and another two are pending. One example is the hard winter white wheat that has been licensed to the General Mills operation in Great Falls. They plan to use this wheat to produce noodles for a target market in Japan.

Business assistance programs

The Montana Manufacturing Extension Center (MMEC) provides direct engineering and managerial assistance to Montana manufacturers. It has been involved with more than 700 projects for over 350 companies in all of Montana.

There have been 30 projects in Billings, including Red Oxx Manufacturing, a producer of soft-sided luggage. MMEC helped Red Oxx create a profit and loss assessment, which enabled them to track the operation's profitability every week. Another example is Dragon/Darcova Inc., a manufacturer of components for well pumps. As a result of MMEC's help, they saved 10 percent on material costs and cut labor costs by 20 percent.

The impact of MMEC in Montana overall has been the creation of 304 jobs in the last two years, with increased payrolls of $5.6 million and an annual production increase of $18.9 million.

Another MSU program is our TechLink Center. TechLink assists companies in commercializing federal and university inventions, such as the application of GPS technologies in agricultural operations. It has helped 31 Montana companies access NASA/DoD technology and 10 Montana companies secure $11 million in funding for new technology development. They have also provided seed grants of almost $1 million to 38 Montana companies to assist in development or commercialization of new technologies.

The Montana Business Incubator (MBI) is a partnership between MSU-Billings and the Big Sky Economic Development Authority. The incubator is housed on the Billings campus and offers a variety of support services to entrepreneurs seeking to start a business. MSU provides office space, access to university facilities, and faculty and student assistance. TechLink has collaborated with MBI in activities such as recruiting four start-up companies to the incubator. The combined revenues of these four companies exceeded $900K last year.

MBI has also helped several companies tap into NASA expertise. Brightsun Inc. has obtained a feasibility study from the Jet Propulsion Lab on the use of locomotive air bags in train/auto collisions. Brightsun is now developing the prototype design and plans to commercialize the product in Billings.

Another company, Brainwaves, is commercializing NASA neurofeedback technology in the clinical treatments of mental health conditions such as autism. NASA used this same technology for astronaut training. In another medical application, St. Vincent's hospital is developing the uses of Telemedicine Instrumentation Packages to deliver services to patients in Eastern Montana.

The Yellowstone Center for Applied Economic Research, on the MSU-Billings campus, studies economic issues and assists communities and individual businesses in formulating effective economic development strategies.

The Small Business Institute, in association with the MSU-Billings business school, provides students as consultants on projects requiring financial planning, marketing and strategic planning for small businesses. Approximately 40 clients per academic year are served. Examples of clients and services they received include: Transtech Center Inc., a business recruiting campaign to attract high-tech businesses; Montana Billiards Supply, a business plan for expansion; the Billings Gazette, a marketing plan for on-line products and services; the local electric cooperatives, a feasibility study of providing natural gas service in outlying areas of Billings; and the Billings Association of Realtors, a Web page to attract high-tech businesses to Billings.

In conclusion, it is obvious that the MSU affiliated campuses are playing a critical role in building a strong base for future economic development and growth in Montana. We have great examples of the partnership opportunities that surround us. The future holds the potential for even more collaboration, built on the mutual interests of the Montana University System and the business community, for the increased economic prosperity of our state.