Why North Dakotans Win With Research Universities

July 2011

North Dakota is fortunate to enjoy two flagship research universities, and even more fortunate given the new collaboration between them as a means to better serve our state’s interests. That said, an understandable question we occasionally hear is “what’s so important about research universities?”

There are several exciting answers to that question, beginning with the economic stimulus uniquely resulting from research universities. One of the nation’s top finance rating firms, Moody’s Investment Service, a few years ago identified the research universities as a leading economic engine of North Dakota second only to overall agriculture. The activity they cited has only increased since that study.

Our research programs bring new resources to North Dakota, most of which are funded from sources other than state general fund dollars. In other words, while based on your support, the progress and contributions of the research universities to North Dakota are in large part being funded without your tax dollars. State funds provide about a fourth of the annual budgets for the two research universities.

Second, that research funding is largely all spent in our state, bolstering the economy as even the energy industry can’t; much of the profits and salaries of the energy industry are not spent here. We note that based on National Science Foundation figures, the two research institutions now have combined annual research expenditures contributing more than $200 million a year directly to North Dakota’s economy.

You may also find it interesting that a recent economic study found for every dollar of state support it receives, the typical North Dakota research university generates almost $7 in “new” money back to our state’s economy. If you took an opportunity for a 7:1 return on investment to your banker, you’d likely be encouraged to invest everything you have in whatever that is! It perhaps goes without saying there is no other public investment opportunity for North Dakotans offering such a return. But it doesn’t stop there.

Much of the research being done at NDSU and UND results in new discoveries, which lead to new businesses, which lead to new jobs. From discoveries and resulting business start-ups at just their two associated research parks alone over the last decade, more than 1,000 new jobs have been created in North Dakota. In contrast, jobs in agriculture are declining. Simply put, university research results in a growing job market attracting more new people, as well as new and higher paying jobs, than North Dakota has ever offered in the past. Those new people are increasingly coming to North Dakota and deciding to stay, raise families, and as a result, further contribute to the state’s economy.

They aren’t the only ones coming to and staying in North Dakota. Due to their growing national and international visibility, the two research universities offer a reason for young people to move to our state. While that trend has been controversial due to misperceptions of what they pay to attend the universities, in fact out of state students at the two research universities pay more, if not substantially so, than North Dakota students. More importantly, an increasing number of graduates from the two research universities (roughly 40 percent and growing) stay in North Dakota after completing their degrees, and take their first jobs here. In a state with a declining college age population, bringing and keeping more young people here should be one of our highest possible priorities.

And finally, there are few better means to bring positive national attention to North Dakota than the success of its research universities. Recent front page coverage in the Wall Street Journal and a 36-page story in Delta Airline’s worldwide magazine are examples of media coverage resulting from the growing impact of the research universities on our escalating economy. We can’t help but also mention that the success of the two universities’ athletic programs, at the Division-I level, has resulted in unprecedented national television and media coverage like few other features of the state.

Simply put, never before have North Dakota’s two research universities been more successful, contributed more to the state’s economy, and brought more and better attention and resources to North Dakota than they are today. That’s been by the purposeful design, vision and support of civic, business and legislative leaders provided years ago through the Higher Education Roundtable. Although the full potentials and contributions of our state’s two flagship universities are yet to be fully realized, all indications are that we are on the right trajectory and we thought you’d be interested in knowing more about that.

Robert O. Kelley, President
University of North Dakota

Dean L. Bresciani, President
North Dakota State University                                                                                       

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