Economic Development Task Force

David Buhler, Commissioner of Higher Education

November 15, 2012

Introduction/Overview

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1. Directly as a large enterprise2. Creation of Innovation3. Expanding the Talent Pool4. Partnering with Business and

Industry5. Strategies for Our State

1) Higher Ed as an Enterprise

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A $4.5 Billion Enterprise

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Tuition/Fees; $592,409,100

State Appro-priations;

$703,119,511

Everything Else;

$3,231,202,187

State Funds $968,433,400

Donations &Federal,

$1,103,629,900

Revenue Bonds $1,255,477,400

Student Fees $117,766,300

28% 72%

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Leveraging State DollarsUSHE provides $2.6 for every state dollar of capital development

USHE Capital Funding by Source (1996-2012)

A major employerUSHE Institutions 33,162

Tax funded: 15,204Other: 17,958

Intermountain Healthcare:32,000State of Utah: 25,000Hill Air Force Base: 15,000Wal-Mart (in Utah): 20,000

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2) The Creation of Innovation

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Creation of InnovationBasic Research and USTAR (since 2005)• 202 patents (106 UU, 96 USU)• 330 disclosure (142 UU, 188 USU)• 120 startups at University of UtahApplied Research• Support for gov’t and business on specific

projects• All institutions participate in applied

research in varying degrees– Example: Bureau of Economic and

Business Research8

Alan KayXerox/Apple

Just like these innovators…

Tom StockhamSoundstream

Ivan Sutherland

John WarnockAdobe

Ed CatmullPixar/Disney

David EvansEvans &

Sutherland

Inspiring the Next Generation of Entrepreneurs

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3) Expanding the Talent Pool

(Preparation, Participation, Completion)

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Expanding the Talent Pool

• By 2018, 66% of jobs in Utah will require postsecondary education.

• Utah is currently at 43%.

• 20 highest-paying occupations in Utah currently require at least a Bachelor’s degree.

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Expanding the Talent Pool

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2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-2033,000

35,000

37,000

39,000

41,000

43,000

45,000

47,000

33,600 33,600 33,600 33,600 33,600 33,600 33,600 33,600 33,600

1,3002,600

4,000

5,500

7,000

8,600

10,300

12,100

Utah Base USHE

Increase degrees 4% annually to reach 66%

More Participation Needed…

• Enrollment growth is not keeping up with population growth

• Between 1994 and 2009:– Youth (18-24) population grew 40%– First time freshmen enrollment grew

20%• 49% of 18-24 year olds not enrolled in

college

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Socioeconomic Status a Predictor of Success

• Utah High School Graduation Rates (2011)– All Students: 76%– White: 80% (6,448 not

graduating)– Hispanic: 57% (2,592 not

graduating)

– Econ. Disadvantaged: 65% (4,209 not graduating) 15

Socioeconomic Status a Predictor of Success

2007 2008 20090.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%71.1% 70.1% 67.7%

51.6% 49.9% 48.8%

RegularLow Income (Free or Reduced Lunch in High School)

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Utah high school graduates who enroll in college by income

$19,316

$26,355 $30,632

$41,273

$59,843

8.2%7.6%

5.5%

4.1%

1.4%

Benefits of Higher Ed are Undeniable

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Median Wage Unemployment Rate

Sources: American Communities Survey 2009, Utah Department of Workforce Services

Benefits of Higher Ed to the Economy

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No Postsecondary Education Some College, Certificates & Associate's Degrees

Bachelor's & Higher

12%

40%

48%

34%38%

28%

Taxes PaidPopulation

Utah Population (25 & over)by education level & state tax

contribution

Benefits of Higher Ed to the Economy

If Utah reaches the 66% goal:• Wage income would increase annually

by between $1.5B and $3B annually.• 5%-10% increase in total state wage

share of GDP.

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Source: Dr. Jeff Strohl, Center on Education and the Workforce, Georgetown University

4) Partnering with Business

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Engaged Experiential Learning• Business partners housed at USHE

institutions provide critical geographic hubs:– USTAR (Regional outreach)– Small Business Administration– GOED (Rural Development, Fast Track, etc.)– Procurement Technical Assistance (PTAC)– Cluster Acceleration Partnership– Small Business Development Center (SBDC)– Etc….

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Engaged Experiential Learning• Resulting in enriched student

experience relevant to the regions/industries– Internships– Undergraduate and Applied Research– Business Incubation– Business and Entrepreneur resources (market

research, capital, consulting)

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Working with industry to align outcomes:

• Regional tech outreach partnership with USTAR– WSU, SUU, Dixie, UVU, USU East

• New certificates in high growth/high wage industries– aerospace, life science, health care

• Economic Gardening (USU, Snow, SUU, Dixie)

• Goldman Sachs - 10,000 small businesses (SLCC)

• Custom fit/CTE realignment (Snow)23

5) Strategies for our State

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Are we as wise as our founders?

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University of Deseret Originally housed in the

first public building built in the state.

Southern Utah UniversityMortgaged surrounding

farm properties to sustain the campus after fire

destroyed Old Main in 1948.

Who pays?

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Funding per FTE 2008

Tax Funds 63%

Tuition37%

Funding per FTE 2012

Tax Funds 49%

Tuition51%

Tuition is up, yet spending is $600 less per student

The 66% Goal: How?

Utah Needs a Bold, New Plan

• Increased Innovation• Increased Investment• We won’t get there by

maintaining the status quo

How do we get to 66%?

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Expand

Teaching/Completion

Capacity

Mission-based

Funding

Operating Expenditures

The 66% Goal: How?

Innovation• Leverage technology• Broaden reach to K-12 students

• College readiness• 1st generation college-goers

• Focus on industry needs• STEM & Health Professions

The 66% Goal: How we get there

Investment in Capacity and Completion

• Year 1 of 7-year plan• Invest in STEM & health

professions• Student preparation for high-

income careers• Build teaching/completion capacity

The 66% Goal: How?

Investment in Capacity and Completion

$30M increases capacity in critical programs

+ $10M scholarships to assist in completion

_________________________________

Total: $40 million investment

The 66% Goal: How?

$20/$20 Investment Plan

$20M state contribution

+ $20M institutional innovation & investment

_________________________________

Total: $40 million investment

Investing in our Children’s Futures• Not simply a new budget request• It will take everyone: K-12, higher ed,

business & state• We need your support!

Summary

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1. Higher Ed is a large enterprise.2. Higher Ed is critical to innovation.3. We must expanding capacity to

expand the talent pool.4. Continue building partnerships

with business and industry.5. Strategies for our state require

support of all stakeholders.

Thank YouQuestions/Discussion

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