North Dakota State University

Good morning everyone; and welcome to our more than 450 colleagues in the 53 counties around the state joining us via video stream. I am truly honored to come before you for my 9th report on the State of the University.

As we know, universities are complex and ever changing. That is a good thing, but for public universities around the country, it leaves them constantly open for scrutiny.

At NDSU we actually welcome that interest in higher education, and take this opportunity to reaffirm our commitment to the greater good. Education and the creation of new knowledge transforms the lives of our students; fuels our economy; enriches the quality of life in our state; and tackles the challenges of health and happiness for the citizens we serve. If that isn't a mission to believe in, I don't know what is. Feeding the world and curing cancer.

Thank you, all, for your commitment to that responsibility we so enthusiastically accept. Thank you particularly to our faculty, who are world class and uniquely committed to all three legs of the land grant model - teaching, research and outreach. They do their work often under far less than ideal circumstances that we often have little if any control over.

Thank you also to our foundation trustees, who give us their passion, time and effort freely, out of belief in our mission and their ability to see the ever more promising potential we can realize.

To our NDSU staff members, who also live and breathe our mission every day in every thing they provide and are critical to our success - thank you.

And, forgive me but I've saved the best for last - thank you to our students. They are simply the best, and we thank them for joining us and sharing their experiences with us. If you're ever having a tough day, walk over to the Memorial Union and strike up a conversation with some students. That'll inspire every time. Their excitement, energy and achievements are palpable. Again, sincerely, thank you all.

A sense of unity and purpose are important to the success of a university, and for that matter any organization. That is particularly the case when challenges arise, as we are now weathering an unprecedented cut in state support. I've been a higher education professional for 35 years, have taught both undergraduate and graduate courses on the history of American Higher Education, and I do not know another example of universities' state appropriations being cut as much in one fell swoop. The good news is that we saw it coming and planned carefully, through a respectful and inclusive utilization of shared governance, to minimize these painful impacts to the extent possible.

While we have been good soldiers in the challenges our state has faced, we must also make our case more urgently for the value of the higher education investment from our state. Note the word investment.

• In the literal financial sense: Every dollar of state money that comes to NDSU is returned to the state 7 fold in terms of our economic impact.
• And in the quality of life sense: educated citizens contribute more and need less from society.

Allow me to discuss the financial return on investment in more detail: The results of a recent economic impact study demonstrate that NDSU creates value from multiple perspectives.

On an internal basis, NDSU benefits local businesses by increasing consumer spending in the region. We are the state's main supply of qualified, trained workers into the workforce. We enrich the lives of students by raising their lifetime earnings and helping them achieve their individual potential. We benefit state taxpayers through increased tax receipts that get deployed across the state, and a reduced demand for government- supported social services. And 53 percent of our NDSU students work nearly 20 hours per week. That's roughly 123,000 hours of labor per week. Or to put it in more sobering terms, and remembering that almost all of our students physically attend school here, NDSU students work the equivalent of roughly 3100 fulltime workers in the Fargo-Moorhead area.

Externally, NDSU draws more than 150 million dollars in research funds from sources outside of our state that are expended in the state while increasing our economic diversification. That downstream economic diversification for our state is exciting, and recent history reminds us of its critical importance in the future if we are ever to escape the boom and bust cycle of North Dakota.

We benefit society as a whole in North Dakota by creating a more prosperous economy and generating a variety of savings through the improved lives of our students, who ultimately become taxpaying citizens and civic leaders.

And in even more detail, NDSU's students enjoy a 14.4 percent rate of return on their educational investments. All costs including tuition, fees and foregone wages, are recovered on average in 10.6 years. The tax base of North Dakota is expanded by $83.6 million due to the higher earnings of NDSU graduates. And $17 million annually in social costs are avoided due to NDSU graduates' savings associated with improved health, reduced crime and reduced welfare and unemployment.

Given all that, the rhetoric about the cost of higher education is interesting to me, especially when compared to, say, the cost of a car. A new car, on average, costs more than an NDSU degree, and depreciates as you drive it off the lot. An NDSU degree, on the other hand, increases lifetime income by well more than a million dollars.

As I said, a mission worth believing in.

At NDSU however, despite a series of very real setbacks and obstacles, we have many reasons for optimism, and perhaps uniquely so in our state.

Let's start with our incredibly positive and vibrant community. We very much enjoy being part of the multi-city Fargo metro statistical area or MSA. That metropolitan area hosts five universities and colleges educating over 35,000 students through the work of over 5000 faculty and staff. Business is booming here. The population is already more than a quarter million and continues to grow steadily, unemployment is some of the lowest in the nation, and we have an incredibly positive working relationship with our business and civic leaders. But the even better news, I'm very pleased to note, is that I've observed a further expansion of those relationships. And increasingly, as I just mentioned, it's understood that good news for Cass County also benefits the rest of the state. We also appreciate the valuable voices of our Fargo area legislators, who are strong advocates for us throughout North Dakota.

You've no doubt been following the work of the Governor's task force on higher education governance, which represents another positive potential for the future. The task force appears to be reaching an understanding that the research universities need far more flexibility to be nimble and responsive to their unique marketplaces. I don't presume what they'll recommend, what our state legislators will do with that recommendation, or what state voters will support, but I'm encouraged by the openness of considering ways that we at NDSU can be more nimble and more responsive to our environment than we currently can be.

In explaining the potential impact of such change, I often say we are overperforming for our size, state funding and scope versus our peers. Now, there's an emerging understanding that we are, nonetheless, underperforming where we could be. The fact that virtually no one on the task force is advocating for stasis is a telling aspect of the deliberations.

Not unrelated to consideration of our potential is a growing appreciation of the priority for taking care of faculty and staff. Our State Board of Higher Education is boldly and vocally supporting the importance of funding salary increases in the coming biennium.

At the same time, and reflecting the above, there are very broad positive discussions now taking place about creation of a higher education stabilization fund. In fact, there are three groups advancing that notion. All have come to appreciate that research funding has a quantifiable return on the investment of state support. Two of the three are using the Permanent University Fund ("PUF") in Texas as a baseline for doing so. The "PUF" was an endowment created in the late 1800s from oil extraction tax revenues (sound like a familiar opportunity?), and it provides economic smoothing for Texas A&M and the University of Texas so as to assure their R&D productivity and economic contributions. Texans get that as their economic insurance policy!

The Valley Prosperity Partnership, a collaboration of major state business and civic leaders started by Bill Marcil, Sr., has been at the forefront of calling for greater support of our state's research universities. They have actively engaged state civic and legislative leaders in their call for action. Thank you to Tammy Miller, here in Fargo, who is the CEO at Border States Electric, and Steve Burian, in Grand Forks, CEO of AE2S for their leadership of the VPP.

On another front, there seems to now be widespread legislative appreciation and agreement that Dunbar Hall replacement must be taken care of during the upcoming legislative session. While that's certainly not a 'done deal,' suffice to say that in light of emerging news on the state's economy we have good reason to be hopeful! And in the course of those discussions, the need and opportunity to replace the 50s-era Harris Hall, and our meats lab, have also emerged. They are key to our agricultural product utilization research, and their replacement has become a real potential on a foreseeable future. By bringing together private resources with appropriated dollars, that critical state need might be addressed much sooner than we would have ever anticipated. Even if that doesn't happen this legislative session, it would put this new facility as a top priority for the following session. Once Harris Hall is taken care of, I would anticipate our future focus turning to engineering facility needs.

In the meantime, this has been an extraordinarily busy summer on campus in terms of new construction and a variety of major renovation projects. Utilizing sources ranging from appropriated deferred maintenance support, local sources, and particularly private sources, well over $100M is going in to some 20 major new or renovated facilities on or proximal to campus. Those facilities will dramatically improve our enrollment, teaching and research capacities as we head in to the future. Given the greater Fargo metro area's dramatic and steady population increases, being prepared for increasing enrollment demands on NDSU is a responsibility we look forward to.

Last but not least I want to remind you of the incredible and still growing private support and enthusiasm NDSU enjoys from our alumni, friends, state business leaders and the nation. More than ever they appreciate the critical role we play in keeping North Dakota high school students in our state, drawing out-of-state high school students to our state, and stimulating the economy while educating our primarily full-time student population and getting them in to our regional work force at a faster pace than our peers. They appreciate that nobody does that better than NDSU and they've materially offered their support so we can further elevate our performance.

To illustrate that point, please note that when I arrived at NDSU in 2010, we were enjoying approximately $9M in annual private giving. Two years ago we hit a record $52M in private giving, and this past year we hit almost $60M. This year is on track to top the last, and that will be the springboard for the largest capital campaign in NDSU and likely state higher education history.

As a material example of the powerful impact of private gifts, we invited representative recipients of the McGovern, Challey & Euren, Doosan Bobcat, Osher and Annexstad scholarships to join us this morning. I'll ask them to stand, and please join me in congratulating these fine scholars and all the donors who make our scholarship awards possible.

A more subtle but nonetheless critical internal source of support for our students is the President's Council for Campus Well-Being. This rather large Council, the only campus group bearing the President's title, is made up of faculty, staff and student leaders focused on a gamut of college student health and lifestyle issues. In recent years they have recalibrated their work to holistically consider the various individual factors which collectively lead to student well-being. The objective data drawn from their work shows a marked annual improvement in our campus environment.

Just two years ago, we were at what was likely an all-time high in terms of most every performance measure I know of for major research universities. The state's economy was soaring and appropriated support had climbed to record levels. Enrollment was steadily climbing as was research productivity despite federal cutbacks, the elimination of ear-marks and the resulting nationwide increase in competition.

Then as everyone knows, we experienced one of if not the largest one-time cut to state appropriated support anywhere in the nation. As a result, with over 100 faculty and staff no longer with us, a somber mood set in across the state and at NDSU. We also learned that there would be no cost-of-living adjustments for two years. Let's be blunt - that, in consideration of inflation, means a pay cut. Then some internal administrative challenges further worsened the mood on campus. And just months ago, higher education was asked to prepare for another 10% cut with the option of 3% more. As if to kick us when we were down, an unanticipated drop this fall in first year enrollments, being experienced broadly across the country at most 4 year and particularly at research universities, created the need to make further cuts. Sadly, but perhaps somewhat understandably, some on campus concluded that things have never been worse. Let me offer some compelling evidence to the contrary.

In many ways, NDSU has weathered the economic storm in our state far better than any other state institutions or agencies. We well in advance saw the cut to appropriated dollars coming. That allowed us to come together as a university community, and in a thoughtful and well-pace execution of shared governance, identify where cuts should be made and what core functions needed to be at all costs protected.

A central premise to the latter was that full-time tenure track faculty had to be protected if we were going to preserve our mission to the state and our students. The good news is, that's exactly what has happened. In spite of early retirements and retrenchments, but inclusive of recent new hires, our full-time tenure track faculty numbers are essentially the same as before the state's economic downturn. Savings have instead come from consolidations, reorganizations, painful further reductions in administrative areas of the campus (finance and administration, student affairs and athletics), and strategic elimination of part-time and adjunct faculty positions.

We continue to make tough decisions, which nonetheless create efficiencies and adjustments that are otherwise hard to imagine. We will never have a time with no challenges - be it demographics or competition or budgets - but we can successfully overcome them if we are nimble and responsive. We have never been afraid to face difficulties and come out better than we started, and we will again.

For example, we can at a time like this, consider and act to improve alignment of programs or disciplines to ensure maximum effectiveness and efficiency, and most importantly, enhance the student experience. In addition, this will be a time to strategically accelerate our pursuit of new or revamped programs.

Don't think we haven't noted the national downturn of enrollments at our nation's research universities...but don't think we accept that as our future. We can and will rebound, and have in place an aggressive 10-point plan for doing so:

1. We've reorganized Enrollment Management's oversight and operations
2. We are contacting prospective students far earlier and more often
3. We will announce scholarship awards far earlier
4. We've changed to an admissions process that speeds up the acceptance notification to only a few days... that in itself is on the cutting edge of national best practices
5. And we are pursuing the ability to simplify the application process to be more competitive with neighboring states. The current process is not specific to each North Dakota campus, and we're seeing more and more potential students abandoning the process, which tells us the length and complexity is a hindrance.
   

   This change is no small thing. As tested and confirmed by a current SBHE member, application to the University of Minnesota took 15 minutes. When trying to apply in North Dakota, that person almost quit, twice, because of the cumbersomeness of the "system" application NDSU is required to use.

6. We're putting more emphasis on scholarship awards, and because of donor support, we have more to offer
7. We are opening exciting new housing options
8. We're increasing the number of admission recruiters in key geographic areas
9. We'll be mobilizing Alumni to increase the number of personal contacts
10. We've launched a new mobile-friendly web site for prospective students

Several facilities projects currently underway will have an enormous impact, very soon, including the much-needed and privately funded expansion of Sudro Hall. That will, in the spring of next year, allow us to admit a substantial backlog of literally hundreds of exceptionally well qualified students who we currently have to turn away. Our state desperately needs us to do so and we are responding! We will also be able to expand other offerings in our College of Health Professions, where we will next fall launch a bachelor's degree in health sciences, in response to increasing demand for graduates who can serve in areas of health care administration. It goes without saying that the nationwide under supply in health care workers, particularly felt in North Dakota and even more particularly felt in rural North Dakota, is a state and NDSU priority we are uniquely moving to address.

Feeding the world and curing cancer.

Another very exciting new opportunity that will add to our scholarly environment is a joint bioinformatics venture with Sanford Health. Sanford recognizes the impact genetics has on diagnosing and treating many health conditions, and has begun integrating genetic medicine into primary care. As this revolutionary approach is introduced in North Dakota, the demand for graduates to study and analyze the resulting data will be substantial on a scale of national parameters. Sanford's approach to genetic level medicine will create an enrollment opportunity and workforce demand of extraordinary size, and we, in partnership with them, are aggressively ramping up to meet it. Sanford approached us because of our long-standing collaborative relationship with them and NDSU's existing programs in those areas as well as the unique computing capacity available on the NDSU campus.

Spin offs of this new initiative may include developing a minor in genetics at NDSU, as well as potential graduate level certificate programs for members of the existing health care workforce. NDSU's expertise in big data and data security, assessing health and economic outcomes, and workforce development are expected be part of this effort. These human genetics and genomics studies in the future will have a previously unimaginable impact on improving human health. This will ensure that future treatment of health conditions are tailored to the individual needs of patients, thus improving treatment effectiveness and reducing risk of drug adverse reactions.

It is exciting that in the future, our students and researchers may play a role in helping to develop this personalized approach to health care. Feeding the world and curing cancer.

Another very exciting collaboration to report is an NDSU smart farm initiative with Microsoft. At the risk of oversimplifying the potential breadth of the project, its goal is to use technology to operate a full size farm. The NDSU Smart Farm is the first of its size in the nation, using unmanned aerial systems along with a range of other crop science analytical functions handled by technology. Across the nation, an endless array of agencies are trying to make a mark in the UAS area. They are asking for more funding and support to start doing so. At NDSU, we are skipping the rhetoric and just doing it! Microsoft approached NDSU due to our existing and increasing use of drones in precision agriculture activities, and because Fargo is home to the state's largest number of firms and individuals licensed for commercial drone activities, and again, our unique high performance computing capacities.

Deep in our DNA as university educators, as people who have dedicated our professional lives to improving the lives of current and future generations through education and research, we live and breathe a sort of constant evolution. This is something profound that we may not have explained well enough to our stakeholders. The current national media rhetoric suggests that higher education is stuck in a rut, unresponsive and offers no value added for what's portrayed as an unreasonable cost. Simply put, to that I say "bunk."

Research universities like North Dakota State University have succeeded for decades - a century and more - because of the drive to constantly change to meet new challenges and opportunities. As I have observed many times, the humility of the people in this university and our state, while a positive quality in many ways, may have allowed our efforts to be unnoticed.

At NDSU, we have a purposeful focus on traditional full-time students looking for a rigorous research university environment, taking courses in person and focused on timely degree completion. That's not by happenstance, that is a choice to own a niche in the market and one we do better than anyone in our 5 state region. Currently, we supplement this focus with appropriately metered online instruction, and there are a number of specific programs that are offered entirely online as a means to bring higher education to North Dakotans who need us to bring NDSU to them. In those circumstances, the content and delivery of online education is solely provided by NDSU faculty. We don't outsource that responsibility.

I'd also like to describe for you a recent visit to one of our premier active learning classrooms in our A. Glenn Hill Center. Governor Burgum spent a day with us, including a BIO 151 class. It's a sight to see, even when you are well versed in what it means to employ this pedagogy. Some 80 students working together at white boards, working on gene sequences as a running collective class project. The energy in the room is amazing, and it's clear that's a powerful way to teach and learn. The governor was visibly surprised to see biology being taught in an interactive manner rather than a traditional lecture hall format.

NDSU is really on the national forefront of adopting active learning pedagogies and using active learning classrooms to teach introductory biology and physics, especially among research universities. Years of education research in all major science disciplines was recently analyzed and this analysis showed failure rates among students in science courses were significantly lower when instructors adopted these types of teaching methods. While other schools have been slower to embrace these new evidence-based teaching methods, we are using them and seeing higher student achievement.

In closing, please know that business and industry leaders are fully engaged and keep us informed about what's working and what's needed next. They're telling us, loud and clear, that they need more graduates from us, particularly in engineering, health professions and business. In the upcoming year, expect to see even more new initiatives on these fronts.

And, let's not lose sight of the purpose of a university education-to broadly nurture the next generation of citizens, not just be an aggrandized version of a task-focused vocational school. We have an educational mission - and while it takes a lot of wise educational, political and business thinking to run such an organization, we are all driven by the mission of improving the lives of our students and the citizens we serve. Often lost in the fray, so we must keep it front and center - is the mission driven approach to higher education catalyzed in 1862, the Morrill Land Grant Act, which became the bedrock of public higher education in our country. It is what built America in less than a century, into a world power. And it is how we became NDSU.