Maryland Chamber of Commerce Annual Business

Maryland Chamber of Commerce Annual Business Policy Forum Remarks of William E. Kirwan, Chancellor
University System of Maryland
October 18, 2002
 

Thank you very much for inviting me this morning. It's such a pleasure to see so many familiar faces. 

I know many of you have heard me say this - but for those of you who have not - I can't tell you how happy Patty and I are to be back home in Maryland. [Personal observations about the opportunity to return to Maryland.]

This being the Chamber's annual business policy conference, I want to discuss the juncture of business policy and educational policy - particularly public higher education.  In today's economy - in the knowledge driven economy of the 21^st century - the lines of demarcation between our two worlds - yours and mine -- have not just been blurred, they have been obliterated.  You might say, we're joined at the hip.  Neither of us can succeed without the other. 

A business policy that does not include support for and attention to education will not succeed; an education policy that does not recognize and serve the state's business needs will surely fail in its mission.   

Naturally, my remarks will focus on the University System of Maryland - its contribution to our state and its importance to our future; but as citizens, business leaders, and policy-makers we must consider all of education in Maryland - from pre-kindergarten programs through graduate school - as a single enterprise, as a whole rather than separate parts. 

Some view K-12 and higher education as different entities for purposes of developing the state's budget. Such a premise is misguided.  A system of balkanized education - in which we treat elementary and secondary education, and higher education and graduate study as separate silos - is badly outdated.  It distorts our perspective and hinders needed collaboration.  In short, there is a vital need for state support of all public education in Maryland - elementary, secondary, and higher education - despite the fiscal environment that confronts us. On this matter, I want to assure everyone in the audience that my return to the state and the return of our state's budget woes are purely coincidental!  

But to make my point about thinking of education as a single continuum, consider the Thornton Commission Report.  One of its primary goals is to have a K-12 system that will prepare a much larger percentage of high school graduates for college.  If we don't begin now to plan for this influx of new high school graduates eager for college, where will they go?  So yes, in a world where a highly educated workforce is vital to economic success, we must be thinking of education as a single continuum.

A moment ago, I made reference to our state's budget woes.  Actually, Maryland's budget difficulties are significantly less than the trauma most other states are experiencing.  Several important indicators support this conclusion.  First, unemployment figures released in August showed Maryland's unemployment rate at 4.5%, as opposed to the national rate of about 5.7%.  Even more impressive, Maryland now enjoys the nation's highest median family income and the lowest poverty rate. 

Our success is due in large measure to the fact that we have developed perhaps the nation's leading example of a knowledge-based economy.  We are the most highly educated state in the nation.  Almost one-third of our total population has a bachelor's degree and nearly 15% have a graduate or professional degree.

Last year, the New York Times did an interesting study.  They looked at the regions in the nation that were the most successful economically and asked what led to their success.  Not surprisingly, they found different factors at work in the different regions.  But the article went on to say, "the one never absent ingredient in the most successful regions is the presence of a major research university willing to change from ivory tower to revving economic engine."  That's something we have in Maryland.  With the combined resources of College Park, the University of Maryland, Baltimore, the University of Maryland Biotechnology Institute, UMBC, and Johns Hopkins, we have a powerhouse of scientific knowledge and an impressive volume of research.  USM institutions alone generated almost $900M in research funding this past year, up from about $200M in 1990. 

In fact, a recent study by the Milken Institute ranks Maryland number two in the nation in per capita expenditures on research in the physical and computer sciences and number one in expenditures in engineering, the life sciences and in overall R&D.  Maryland also ranks first in the nation in the number of Ph.D's in the biological sciences, and second in computer science.

Thanks in part to this research capacity and the workforce created by our by our universities, the Washington-Baltimore metro region has been cited by the Brookings Institution as one of the nations' biotechnology hotspots, noting especially our strong research and the ability to convert research into commercial activity.  TEDCO estimates that Maryland is home to more than 300 bioscience companies and federal agencies engaged in bioscience research.

When we add the capabilities of our universities to the major federal research agencies - NIH, FDA, the Beltsville Agricultural Center, and NIST - no region in the world can match the intellectual brainpower of our state in the life sciences.

Given these phenomenal resources, there is no reason why Maryland cannot become the Silicon Valley of the Life Sciences.  In fact, I say shame on us if over the next decade we cannot legitimately lay claim to that title.

All the ingredients are here for the "revving economic engine" described in the New York Times article.  Scientists at College Park, UMB, UMBI, and UMBC are both fueling and capitalizing on the opportunities the region presents.  

We are seeing stunning breakthroughs with enormous commercial potential.  Scientists at UMBI's Center for Marine Biotechnology recently received the first ever patent for the process of growing marine fish indoors in a completely re-circulating and fully contained system. 

Indoor, re-circulating marine aquaculture is a tremendous breakthrough and the most promising means yet for increasing seafood production.

AIDS researchers at the Institute of Human Virology have developed a candidate vaccine strategy that, for the first time, demonstrates an ability to elicit antibodies that block the infection of multiple HIV virus strains -- a goal that scientists have been pursuing for a decade.  Imagine the global and economic implications if this vaccine proves successful.

In its 15-year history, College Park's Office of Technology Transfer (OTC), has recorded almost 2000 information, life and physical science invention disclosures; secured more than 160 U.S. patents; and executed 550 license agreements, which have already generated almost $20 million in transfer income.

The University System also is attracting and growing Maryland businesses. 

College Park's Engineering Research Center provides matching funds to companies in Maryland, or who will locate in Maryland, so that they can gain access to the System's expertise and research facilities and improve their competitiveness in today's technology-driven environment.

College Park's Office of Technology Transfer (OTC) has assisted in the creation of 23 high-tech start-up companies, which were formed based on technologies developed at the University of Maryland.  Fifteen of the start-up companies are operating successfully within the state of Maryland.

UMBC's Technology center, acquired in 1996, is fully occupied and has had 42 tenants to date. The Center serves as a business incubator for start-up companies, a site for research collaborations and joint ventures between UMBC and the private sector, and provides a full range of advisory services to young businesses.

Partnerships and collaborations with the private sector are increasing on every one of our campuses.

But it's not just research, the creation of intellectual property, incubators and start-up companies that build a strong economy.  At least as important is for your companies and businesses to have ready access to a highly educated workforce.

A decade ago, Maryland was a net exporter of academic talent.  More of our high ability high school graduates went out-of-state to school than we recruited from other states.  No more!

The growing academic reputations of USM institutions are attracting Maryland's and some of our nation's best and brightest.  And it's no wonder. This year, our flagship university, the University of Maryland, College Park, was ranked 18th among all, national, public research universities, increasing from its rank of 21 last year.  Admission to College Park is as competitive as admission to the University of North Carolina Chapel Hill.

In 1991, only one program at College Park appeared on any top-25 list, such as U.S. News and World Report annual rankings.  Today, 65 programs today are in the top 25! 

And it's not just College Park that is rising in the national rankings.  Towson University and Salisbury University are ranked among the top 10 public, master's level universities in the Northeast, and this year Salisbury reached the top tier of all universities in the region.

Last year, Frostburg State jumped an entire tier, from tier three to tier two, in the rankings of its peers in the Northeast and UMBC was just listed as one of the ten "hottest schools " for admissions in the nation.

All of the University of Maryland, Baltimore's professional schools are ranked among the nation's very best: the medical school is ranked 9^th among medical schools and 17^th overall in total research funding; its nursing school is consistently ranked in the top ten; and the school of Pharmacy is ranked 7^th.

These high rankings help us keep our best students in Maryland and attract talented students from out of state.  This is crucially important to you because data show that college graduates are highly likely to take their first job in the state where they graduate.

But it's not just graduates fresh out of college that you need.  You also have need for your employees to return to college, learn new skills and get advanced degrees.  Working adults - your employees - are in fact returning to college, or attending for the first time, to earn a degree in ever increasing rates.

Here again we are blessed in Maryland.  We have the University of Maryland University College and Johns Hopkins University, two of the world leaders in distance and online education.

UMUC undergraduate enrollment is projected to double over the next ten years and its graduate enrollment will nearly triple.  It is clearly emerging as the nation's leader in online education and will increasingly be a school of choice for continuing and adult education. 

Overall, during the next ten years, part-time undergraduate enrollments at System institutions are projected to increase by 52%, part-time graduate enrollments by 70%. 

Another model for reaching working students can be found at our Shady Grove Center in Montgomery County.  The center offers five graduate programs for evening and weekend students.  Its daytime program, which is the result of collaboration with Montgomery Community College College, offers upper level courses in 14 bachelor's degree programs delivered by eight of our System institutions.  A similar center is planned for Hagerstown and could be replicated in other regions of the state.

We - you and the USM - face a challenge in the coming years.  Between now and the year 2010 retirements will create a workforce shortfall of some 400,000 people in Maryland.  Most of the jobs will need to be filled by individuals with at least some post secondary education.

Fortunately, we also anticipate a bulge in the state's 18-22 year population.  This age cohort will grow by almost 30% over the next decade.  It is imperative that as a state we find a way to accommodate these additional students.

Through partnerships with community colleges; certification programs; short courses; online learning; and regional centers like the Shady Grove Center, we believe the USM can meet the this enrollment surge and, as I noted, it is imperative to you that we do serve these students, because you will need them in your businesses.  The point is, however, that as a state we must be prepared to expand educational opportunities, not contract them.

There is one other aspect of our state's colleges and universities that doesn't get enough notice and that is their contribution to our quality of life.

Maryland's colleges, universities, and research institutes' contribution to the betterment of our life is as vital as it is difficult to measure. But imagine Maryland without a public university system committed to public service.

What is the value of the neonatal care UMB provides to expectant mothers?

What if there had not been research at USM institutions leading to better health care for Marylanders and a cleaner environment from the Chesapeake Bay to the Allegheny Mountains?

What would local communities lose if Frostburg State University, Salisbury University, and the University of Maryland Eastern Shore were gone? 

What would Baltimore's Mount Royal neighborhood be like without The University of Baltimore?

What kind of learning environment would the students at Rosemont Elementary School have if Coppin State College was not interested in them?

What cultural events would never be seen if the Clarice Smith Performing Arts Center was not built?

What would we miss if the thousands of connections between USM institutions and their communities were severed?    

The return on the state's investment in higher education - whether it's in the form of a stronger economy, a bigger paycheck, or a healthier life - is immense.  Clearly, we have a System in place that is now beginning to fulfill the promise held for it when it was created back in 1988. 

We have a great thing going in Maryland.  We have developed public universities on a par with our great private universities.  And as a result, we have emerged as a leader in the knowledge economy. 

I think back ten years ago and I remember everyone saying, "Wouldn't it be wonderful if we had a university system like they have in Virginia or in North Carolina."  Well guess what?  Those states are now looking to Maryland and the question is being asked in reverse.  

Yes we have developed something very precious.  We're not perfect.  Our connections to the business community could be even stronger and they will be.  Our commercialization efforts could be better and believe me they will be.  But as a state, through wise investments in higher education, we have created something pretty special.  But it is as fragile as it is special.  Quality in higher education is not something that can be turned off and on like a tap. It takes decades to build.

The state's fiscal problems place our universities and their hard won excellence at great risk.  Let me quantify the problem.  Over the next two years, the state must either cut expenses or find new revenues to the tune of about $1.5 billion annually.  Theoretically, spending reductions must come from a total General Fund budget of about $11 billion.  However, roughly 60% of the state's expenditures are for programs considered to be mandatory - K-12 education, Medicaid, and public safety.  Budget cuts must come from what's left, a so-called discretionary budget of about $4.5 billion.  And guess what sits as the largest single item in the discretionary portion of the budget...you got it, higher education.  We are a big target; I am concerned that some consider us an easy one.

I saw the effect of the easy cuts in the early 90s, an effect that took the System nearly a decade to overcome.  But we have finally recovered. More importantly, as I think you agree, we are finally on our way to becoming the system the state envisioned in 1988.

The progress the USM has made in the past few years is simply astounding, and exceeds that of any system of higher education in the country.  Our institutions are entering the elite ranks of their peer institutions, whether they are national research universities, academic health centers, research institutes, or regional, comprehensive universities.

The upcoming budget decisions are going to test our System's leaders, our political leaders, and you. 

The System's leaders must demonstrate that they are managing their resources as efficiently and effectively as possible.  We have no right to complain about our budget if we are not responsible stewards of the taxpayers' money.

The state's policy leaders must decide if public higher education in Maryland will continue on the path of excellence or slip back to the ranks of second-tier institutions.

And you, the business leaders of the state, must determine your interest in the quality and capabilities of our university system and act accordingly.  I believe your interest - as business people, as parents, and as citizens of Maryland - is considerable. 

The importance of our state's colleges and universities to Maryland's future cannot be overstated.  I express it this way - in a knowledge driven economy, higher education is the State's Economic Engine, and the Ladder of Opportunity for its citizens.

My greatest responsibility as chancellor will be to work with the Board of Regents, the presidents, and my colleagues in the System Office to communicate this message.  I welcome your help in this campaign. The System isn't perfect and shouldn't be treated as a sacred cow.  But it is a thriving, positive force in Maryland and is central to the economic health and social fabric of the State.

Help us maintain its momentum - Maryland can't afford for it to stop.