The board that oversees Arizona’s public university system is looking to more than double its spending on research by 2020, as well as recruit more pace-setting researchers and steer more students into the life sciences and other science and math specialties.
These goals and others are included in a draft strategic plan under review by the Arizona Board of Regents, called 2020 Vision: The Arizona University System Long-Term Strategic Plan, 2008-2020, and available here.
Sandra Woodley, the Regents’ chief financial officer, told BioRegion News recently the draft plan will be amended to become a final plan that will undergird a more detailed study with specifics for carrying out the strategies outlined in 2020 Vision. The plan would take place across all three schools that comprise the state’s higher-education system — Arizona State University, Northern Arizona University, and the University of Arizona.
“We have some additional work that we plan to do over the next couple of months to tweak it a little bit and add a few other components. We expect to finalize the plan likely in December,” Woodley said in a recent interview. “This particular component of our strategic plan is meant to provide the framework, the goals, the touchstones for the system out to 2020.
“The next step will be to drill down to the university level and to get down to specific strategies and specific targets for the universities,” both short- and long-term, over the next year to two years, Woodley said.
The strategic plan offers three goals for how much the state should spend to improve its research effort to one of national prominence. The highest, or gold standard, calls for boosting that spending to about $1.75 billion. The second-highest, or “silver,” sets a $1.65 billion goal, while the lowest or “bronze” standard sets a minimum target of just over $1.5 billion.
“Part of that has to do with getting more faculty members who are research oriented, who are able to bring in more grants. And part has to do with having additional state funding that will enable research infrastructure to be built, such as labs and research buildings to be able to attract these high-quality researchers,” Woodley said in an interview.
Given relatively flat federal spending on research grants over the past five years, Woodley said, “we feel that we will go back to the state and ask for some additional state funding to supplement the federal funding, in order to get us off the ramp on the research piece.”
The Regents have yet to decide how much additional funding to ask of the state, pending completion of a financial model and long-term financial projections for the entire Vision 2002 plan “probably by late November or early December,” she added.
Meeting the gold standard on research will be doable, Woodley said, if Arizona was to attract a new federally funded research and development laboratory. Such a facility would generate the largest percentage growth in research dollars for ASU, to $730 million under the gold standard, down to $655 million for silver and $536 million for the worst-case bronze scenario. That last number is expected to rise as part of a recalculation of the bronze research target in progress, and designed to reflect at least some improvement in the system between now and FY 2020, she said.
R. F. (Rick) Shangraw Jr., vice president for research and economic affairs at Arizona State University, told BRN the university system had no specific federal R&D lab in mind, but included the possibility in its projections to reflect the goal of beefing up research.
“For our research enterprise to continue to grow, and be successful in Arizona and particularly at ASU, we need to begin approaching and trying to be competitive for a large lab in Arizona,” Shangraw said in an interview. “It’s part of the strategy for how we move into .”
Arizona’s state universities spent a combined $766 million on research in the 2006 fiscal year, the latest year for which figures are available from the Association of University Technology Managers. According to AUTM’s U.S. Licensing Activity Survey for FY 2006 report, released late last year and available here, UA accounted for the lion’s share of research spending at about $535.8 million, followed by just over $131.8 million for ASU.
UA spent 1.1 percent over the previous fiscal year, when it racked up $530.2 million, while ASU spending jumped 19.6 percent from the $110.2 million it recorded in FY 2005, according to AUTM’s licensing survey for that year, available here.
AUTM did not release research expense figures for individual universities in previous years.
Following the Roadmap
The Arizona university system’s rising research spending followed development of the state’s blueprint for growing its life sciences industries — the Arizona Bioscience Roadmap prepared for the Flinn Foundation, a key champion of the state’s life sciences effort, by the Battelle Memorial Institute, the global R&D and laboratory-management organization headquartered in Columbus, Ohio.
Walter Plosila, a senior consultant to Battelle’s technology partnership practice, and principal author of the Roadmap, told BRN the Regents’ goals “will be a challenge, but not impossible.”
“Given the population increase in Arizona, and the student body increase, there’s no reason they can’t achieve a higher objective in terms of research spending,” Plosila said. “Certainly with Michael Crow at ASU and [Robert] Shelton at UA, you’ve got two leaders who really understand how important building the research enterprise is, as well as education and teaching are.”
As for the state university system’s performance in recent years, Plosila said in an interview, “they have been doing well in the last five years overall.
During that time, Arizona has increased its overall research dollars from the US National Institutes of Health by 11.6 percent. For the federal fiscal year that ended Sept 30, 2007, the last full year for which figures are available, Arizona won 483 grants totaling $170.9 million, up 6.3 percent from the $160.7 million in 467 grants awarded in federal FY 2006.
Over the past five years, Arizona’s NIH funding rose from $153.2 million in 453 grants in federal FY 2003. While that’s no mean feat during a period where NIH’s overall research funding has plateaued, the state can do even better, Plosila said.
Arizona’s state universities spent a combined $766 million on research in the 2006 fiscal year, the latest year for which figures are available from the Association of University Technology Managers.
“This is just reiterating the importance of seeking and securing outside dollars, because in fact that’s how you’re going to build a research base. You’re not going to do it on state money alone. No state could do that, let alone Arizona,” Plosila said.
Finding and keeping talented people in Arizona remains a challenge within the university system, and beyond. In August, Dietrich Stephan said he would leave his position as deputy director for discovery research and director of the neurogenomics division of the Translational Genomics Research Institute, or TGen, after five years. Stephan will move to the San Francisco Bay Area to run Navigenics, a developer of tests measuring patients’ genetic likelihood for several diseases.
Stephan told the Arizona Republic the move would help him and his company find venture capital more easily – a continuing challenge to Arizona, despite progress in recent years, Plosila said.
Several states have addressed the issue of attracting and retaining faculty entrepreneurs by emulating Georgia, which has recruited more than 60 top-tier researchers to the state’s universities since 1990 through its state-funded “Eminent Scholars” program, overseen by the public-private Georgia Research Alliance. Researchers are expected to demonstrate a track record of spinning out startup companies, and a willingness to bring their existing startups to Georgia and launch new ones in the Peachtree State.
Woodley said Arizona Regents were studying whether to follow a similar path and develop a program along the lines of Georgia’s Eminent Scholars program: “That’s one of the early discussions we have had. That is part of preliminary discussions that we’ve had that will play out over the next couple of years as we get more mature in our funding model projections and costing out the plan.”
According to GRA’s web site, the alliance has spent $467 million to draw the eminent scholars, but has more than recouped that cost by leveraging $2 billion in federal and private funding, creating more than 5,500 new science and technology jobs; and establishing more than 150 new companies. But a Georgia state Senator, Doug Stoner (D-Cobb County), has publicly questioned whether the eminent scholars program could suffer at least short-term following a report in the Atlanta Business Chronicle last month that the University of Georgia Foundation may have missed out on $222 million in royalties by negotiating a licensing deal with Allegran for the dry-eye prescription drug Restasis. The researcher who discovered the drug, Renee Kaswan, has sued the foundation and Allegran, claiming the deal cost her $100 million.
The notion of an eminent scholars program taking root in Arizona was among recommendations for propelling the state above third-tier status included in the state’s bioscience Roadmap: “Sufficient public sector funds for bricks-and-mortar investments, i.e., capital investments, are part of the gap to be filled; but, the gap is broader than that. It also means sufficient public sector operating funds to recruit and attract Eminent Scholars; to offer competitive recruitment packages for emerging young, talented, biosciences faculty; and to build core labs and facilities that are competitive with other academic health and university research centers across the country.”
The complete 166-page Roadmap can be read here.
Overall, the Roadmap recommended that Arizona focus on growing a small number of life-sci specialties by securing additional public and private funds, and by increasing collaboration among the three state universities. “Collaboration is still a very strong suit today in Arizona, much more than you find in the East Coast, but it’s easier said than done.
“I wouldn’t say we’ve reached Nirvana yet, but we certainly made some pretty good progress in the biosciences through collaboration,” Plosila added.
Increasing such collaboration is another recommendation in 2020 Vision, as is strengthening the state’s technology transfer effort. ASU took an important step in that direction last year when it named Augustine Cheng, a 23-year veteran of Columbia University’s successful Patent and Licensing Group, to achieve at least similar success as managing director of ASU’s tech-transfer arm Arizona Technology Enterprise [see BRN sister publication Biotech Transfer Week, June 11, 2007].
But Arizona retains a significant barrier against tech transfer: The state limits its universities to receiving royalties from the technologies they invent, not allowing them to have direct equity stakes in their startups. ASU has gotten around the rule, Plosila said, by establishing a foundation to oversee its tech transfer effort. Arizona voters rejected a state constitutional amendment that would have allowed a direct university role, only to see Utah and Oregon pass laws permitting it.
“It’s a relic of the Populism era of America west of the Mississippi. It was never intended to thwart tech transfer, but it ends up being an impediment. Just taking a royalty stream is not the best way to get a return on your investment. Being able to take both a royalty return and some equity is a much better way,” Plosila said.
Plosila said Arizona’s public university system would stand a better chance of transferring new technologies from colleges to the commercial realm – and holding on to top research talent — if they raised the pay of researchers to the levels of East Coast employers. That will require additional funding from the state government, he said.
“They aren’t competitive, salary-wise and otherwise, on star faculty. It’s important to building this bioscience research base that the universities can attract star researchers and research teams,” Plosila said. “The viewpoint of the Legislature in Arizona historically hasn’t been very strong for higher ed. That is changing.”
One example of that change, Plosila said, will benefit the state’s life sciences effort. Earlier this year, state lawmakers approved issuing $470 million in bonds to pay for two projects within the Phoenix Biomedical Campus:
- The 309,000-square-foot Health Sciences Education Building, which will house classrooms, a simulation center, pre-clinical training suites, anatomy laboratories, a library, a learning resource center, and faculty offices in a facility designed to train students from all three state universities for careers in medicine, pharmacy nursing and allied health professions.
- The 301,000-square-foot Arizona Biomedical Collaborative 2, which will house laboratories, offices and lab support space for about 50 principal investigators from UA, ASU, and NAU. The ABC2 is designed to carry out translational research in cancer, neuroscience, diabetes, and cardiovascular disease, as well as support for research elsewhere on the campus, including the collaborative’s first facility, ABC1, and TGen.
The Board of Regents has said the projects are essential to not only completing the long-planned biomedical campus, but to growing the size of the UA College of Medicine-Phoenix, a collaboration with ASU, to 150 students from the current 48.
“This Vision report plus what the Legislature did in terms of additional dollars for facilities suggests that Arizona is turning around from an historically neutral or less than positive view of higher ed to realizing more and more that it’s an important part of the economic engine of the future,” Plosila said.
A Cost-Cutting Year
Bonding for expansion of the biomedical campus was an exception to the series of cost cuts hammered out by Arizona lawmakers and Gov. Janet Napolitano to eliminate the state’s $2 billion budget shortfall. Napolitano is a Democrat in her first term, while Republicans control both houses of the state Legislature.
The state university system and Regents’ board was not spared from cuts in the state’s current $9.98 billion budget for the fiscal year that started July 1. The system saw its funding chopped by $35.3 million, or 3.3 percent of the $1.08 billion it receives from the state general fund. It was the second funding reduction for the system in less than a year. In April, lawmakers trimmed $14.7 million from the universities and Regents’ board as part of an agreement to balance the FY ’08 budget following a funding shortfall blamed on the weak economy.
The cut was parceled out among the three public universities and Regents’ board. While the board fared best by losing $250,000, just 1.2 percent of its state funding this fiscal year, ASU bore the largest cut of $22.65 million, reflecting 4.7 percent of its state general funds in FY 2009.
Napolitano and lawmakers also agreed to cut other funds from state life sciences programs, including:
- $10.5 million previously approved toward design work for the biomedical campus expansion. That money will instead come from the state’s capital budget.
- $2.5 million, or 10 percent of the $25 million the state last year agreed to deposit into its Arizona 21st Century Competitive Initiative Fund for use by the nonprofit Science Foundation Arizona this fiscal year – part of a four-year, $100 million funding plan approved by lawmakers for SFAz last year. SFAz will receive the deferred money in FY 2011, for a total that year of $27.5 million.
Officials earlier this year also assisted SFAz by changing state law to count government investments and other cash equivalents toward the matching funds that must account for half the money it spends, with the rest coming from its state subsidy. Previously, the 50 percent had to come entirely from private sources.
This year, lawmakers also increased the individual and corporate income tax credits for R&D activity over an eight-year period – but cushioned the fiscal blow to the state by not allowing the additional credits to take effect until the 2010 calendar year. Details of the increase can be read in a legislative report summarizing the budget and available here. The additional credits are projected to cost the state $5.7 million during the first year.
Woodley told BRN another key purpose of the strategic planning effort will be to study and possibly change Arizona’s model for funding the university system. She said the Regents board expects it can fund Vision 2020 through a combination of state appropriations, productivity savings, and tuition revenue, with an eye to keeping that cost within reach of lower-income families.
“One of the things that we’re likely to try to incorporate into our funding policy is a way to provide incentives for degree production, and also specifically for targeted degree production. We may find a situation where our financial plans would link some incentive for the institutions, give them extra monetary incentive if they’re able to produce more [majors] in the high-demand fields. And those cost more to produce,” Woodley said.
“We think all of those things have to happen in order for us to get all the way to the gold standard. And we may not get all the way to the gold standard, though we hope we do,” Woodley added.
2020 Vision calls on the state to increase the number of bachelors’ degree graduates throughout the state university system by 2020, again by laying out “gold,” “silver,” and “bronze” standards. The gold or highest standard of 36,363 assumes “very significant” educational improvements in every sector and represents a doubling of the number of bachelors’ graduates from the 18,000 of 2000, a goal set by Napolitano in her State of the State address earlier this year. The silver standard assumes a less significant progress or 31,210 bachelors’ grads; while the bronze goal of 28,831 would reflect solely a projected increase in state population, with no change in graduation or retention rates.
To generate more graduates, the Arizona system is looking at three targets for boosting total undergraduate enrollment — from 100,000 in FY 2006 to a “gold” standard of 181,140; a “silver” standard of 149,230; and a “bronze” standard of 122,300.
Woodley said the gold standard “would mean adding over 80,000 students in the system over the next 12 years.” How many of those students would be life sciences majors has not yet been examined, but will be part of a later study phase aimed at projecting how many students pursue high-demand majors — from life-sci and other science, technology, engineering and mathematics, or STEM, programs; to healthcare and teaching.
Certainly it will take the better part of this year to try to focus on what our plans may be to try to provide incentives for the production of degrees in high-demand fields,” Woodley said.
The answer to that question, and similar numbers for other degrees, pale next to another bigger concern for the Regents to answer, she added: “What we have to do next is to determine what the capacity of the institutions is to be able to grow in their current framework, and what else may be needed.
“For example, we may decide as a system that we have to have additional campuses, or we need additional 2+2 programs [allowing students to complete a bachelors’ degree at a four-year state university after starting their first two years at a community college] to be able to bridge that gap. We may have to ramp up our distance learning capabilities to handle some of that volume online. It is likely to have to be a combination of all those things,” Woodley said.
One potential hurdle to implementation: Arizona’s community college system is decentralized, and not under Regents’ control. The state years ago abolished a governing board that oversaw those schools, leaving them to the direct control of their administrative staff and boards.
“Over a period of five to six years, we have to start to build the infrastructure. Those [projects] take several years to ramp up, to be able to make sure that we have the capacity to handle those students to reach those goals.”
The goal gibes with separate efforts by Arizona to increase its numbers of students in STEM programs from kindergarten through high school. In 2005, Napolitano created a “P-20 Council” charged with aligning the state’s various school systems, with STEM job training and increased enrollment in mind.
In June, P-20 approved 35 recommendations toward aligning and improving the state’s education systems, including creating new “hybrid” four-year schools incorporating joint community college-university programs; allowing community colleges to award some bachelor’s degrees; improving university campuses or “centers” by ensuring large-enough populations of working adults and other students to make them viable; and creating a new database linking an existing K-12 database with the state universities, as Alabama, Florida, and Texas have undertaken in recent years.
“If you do that at the K-12 levels, eventually you’ve got to have a higher education system that’s also responsive as you get more STEM students in the pipeline. The state is trying to align higher ed with K-12 efforts,” Plosila said.
To train all the additional science and math students, Napolitano and other state officials in July announced they were joining with a public-private group to create the Science, Technology, Engineering and Mathematics Education Center. The center – to be housed at the downtown Phoenix offices of Science Foundation Arizona, the public-private group that links academic-industry collaborations – would also work to promote science and math education in students from pre-school grades through college.
Napolitano has named Darcy Renfro, her advisor on economic and higher education, to run the STEM center, which has secured funding for its first three years. Phoenix-based copper producer Freeport-McMoRan Copper & Gold has donated $1.5 million, while the Salt River Pima-Maricopa Indian Community has chipped in another $100,000.