Excellence in Technology-led Economic Development

Fields of Green: North Dakota State University Research & Technology Park

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For more than 100 years, acres of agricultural test plots surrounding the North Dakota State University campus in Fargo were a common sight. As a land-grant institution, NDSU has a strong heritage based in agricultural research. But by the 1980s, the institution and the state it serves faced obstacles. A farm economy crisis forced many farmers out of business, affecting families, farmers, Main streets and state institutions. Everyone wondered: Just where did the state's economic future lie?

Stemming the out-migration of young people from North Dakota, creating good-paying jobs and boosting per capita income were just some of the challenges facing the state's leaders. It took several catalysts and a team dedicated to measured change to develop long-term solutions.

Evaluating assets and forging partnerships

The state's assets included an extensive higher education system and two major research universities, as well as a favorable tax and regulatory climate for business. State leaders established a Higher Education Roundtable in 1999 to examine North Dakota's university system and make recommendations to improve its role in education, research and economic development.

The 60-member advisory group included members of business and industry, state lawmakers, higher education board members, college presidents, faculty, and representatives from state government and American Indian tribes. The group's report pointed out that without action, the state would continue losing population, particularly young people in their prime career years. The state Legislature and Board of Higher Education listened to the suggestions and adopted a doctrine of flexibility and accountability that gave campuses such as NDSU the opportunity to pursue new initiatives while demanding measurable results.

Catalysts and convergence

When Dr. Joseph A. Chapman arrived as president of NDSU in 1999, research expenditures were $44 million, student enrollment was 9,700 and 150 doctoral students were on campus. "My first impressions of NDSU were that this was a tremendous university but that it did not have the academic and research portfolios of our land-grant peers," said Chapman.

NDSU did, however, have expertise in a number of growing technology fields. An early feasibility study on the viability of a research park at NDSU focused on four regional industry clusters that were showing rapid growth: biosciences, advanced manufacturing, materials science and information technology. The study also noted that there was virtually no competition from other economic development organizations in the region. Chapman championed the Research & Technology Park concept as a place where university researchers and private industry could combine their talents to develop new technologies, methods and systems. The state's Board of Higher Education approved the idea and groundbreaking for the Park took place in May 2000.

Chapman's early decision to pursue rapid development of a technology park coincided with his challenge to faculty, staff and students to move the entire university to the next level by increasing research activity, enrollment and doctoral programs, as well as moving NDSU athletics to NCAA Division I. Faculty and staff saw the challenge - increasing annual research expenditures to more than $100 million, boosting enrollment to more than 12,000 students and increasing doctoral student enrollment to more than 500 in six years - as opportunity.

Barry Batcheller, a North Dakota entrepreneur who started an electronics manufacturing company later sold to equipment manufacturer John Deere & Company, was initially skeptical that the tech park could be accomplished. Batcheller, an NDSU graduate (and now a member of the NDSU Research & Technology Park board), told President Chapman, "If you can lay the foundation to get it done, I'll build a building." Phoenix International, at the time headed by Batcheller, became the Park's cornerstone tenant.

Partners in growth

The rapid early success of the NDSU Research & Technology Park has depended upon bipartisan and nonpartisan work by leaders who understand what is at stake for North Dakota's economic future. Fortunately, that includes the state's Republican governor and the state's Democratic congressional delegation.

As options were discussed at the state level, North Dakota's congressional delegation - including Senator Byron Dorgan, Senator Kent Conrad and Representative Earl Pomeroy - sought additional opportunities to spur development. Senator Dorgan worked with government entities and businesses to create the Red River Valley Research Corridor in 2002, with the goal of attracting new companies and high-paying jobs to the state by maximizing the world-class research underway at the state's universities. More than $300 million has been secured for Research Corridor development.

In addition, Senator Dorgan's annual Upper Great Plains Technology Conference and Action Summits bring in tech heavyweights such as CEOs from satellite radio, medical technology corporations, telecommunication companies, Silicon Valley companies and others to see what the state has to offer. Senator Dorgan also initiated an introduction between NDSU and Alien Technology of Morgan Hill, Calif., a leading manufacturer of radio frequency identification (RFID) tags.

Governor John Hoeven, previously a banking executive who participated in the Higher Education Roundtable, pushed to develop programs to spur the state's economy from one based solely on agriculture, energy and tourism to a more diverse mix that includes technology-based businesses.

During the 2003 legislative session, the North Dakota Legislature, acting on Governor Hoeven's proposal, created "Centers of Excellence" within North Dakota's university system. The Centers of Excellence initiative provides up to $50 million for research and commercialization of new products and services that will create higher paying jobs and new business opportunities. Dollars leveraged with private and federal matching funds are helping make the state's campuses active partners in building North Dakota's economy.

The NDSU Research & Technology Park project was declared a Center of Excellence and was awarded a $1.25 million grant to develop a technology incubator, the NDSU Center for Technology Enterprise. More than $6.9 million in state, private and federal funds have been secured to develop the incubator, including $3 million from local governments and businesses in the region and $1.75 million from the U.S. Economic Development Administration for construction. (NDSU also has received $7 million in Centers of Excellence funding for projects in advanced electronics, polymers, coatings and agriculture biotechnology. Earlier awards included a Center of Excellence in Beef Systems and a Center for Genetic Research.)

To accomplish its goals, NDSU Research & Technology Park leaders collaborated with the chamber of commerce and local, regional and state economic development groups. In a state where business leaders can call elected office holders and talk with them directly, such communication fosters collaboration to ensure long-term economic viability for the state and its residents.

The company we keep

In six years, the NDSU Research & Technology Park evolved from agricultural acres to six buildings in which high-tech research and manufacturing occurs. It includes the following facilities:

• Research 1: Completed in 2001, this 40,000-square-foot building houses NDSU's Department of Coatings and Polymeric Materials, which is one of only six programs in the U.S. that specializes in plastics, paint and coatings research. It also holds 13 laboratories and houses the NDSU Research Foundation and Office of Technology Transfer, which works to transfer university technologies to the market. In addition, a Product Design & Commercialization Center facilitates commercialization of technology and intellectual property developed at NDSU.
• Research 2: Completed in 2004, Research 2 (76,000 square feet) includes the NDSU Center for Nanoscale Science and Engineering (CNSE), three "Class 10,000" clean rooms and three "Class 100" clean rooms to maintain a dust-free environment when developing electronic sensors and chips for business, industry and government applications. In partnership with Tessera Technologies, Inc. of San Jose, Calif., it includes surface-mount technology and chip-scale packaging lines where prototypes of electronics can be manufactured. Research 2 also contains a unique combinatorial science lab where coatings and polymeric materials researchers conduct hundreds of experiments simultaneously, reducing discovery time from months to days.
• Phoenix International Corporation: Phoenix develops highly ruggedized electronics and systems as a division of John Deere Corporation, with 75,000 square feet for its New Product Introduction Center.
• Alien Technology: The Morgan Hill, Calif., company constructed a 50,000-square-foot research center and manufacturing facility, capable of producing billions of RFID tags annually.
• Center for Technology Enterprise: 50,000-square-foot business incubator under construction to enhance success of technology start-ups. Four companies currently in other NDSU buildings will relocate to the center that is anchored by Bobcat Company, a division of Ingersoll-Rand, a diversified international industrial company locating an R&D facility in the NDSU Park. Appareo Systems and Pedigree Technologies are two recent start-up companies that will also be housed in the new incubator.
• Candlewood Suites: A 72-suite hotel serves as a real-world lab for NDSU hospitality and tourism management program students.

Leadership and governance

The NDSU Park was incorporated with the goal of achieving maximum flexibility with an entrepreneurial spirit and acceptance of risk. In recognition that this type of initiative requires significant investment, patience and community support, the NDSU Research & Technology Park board of directors includes an eclectic mix of representatives from industry, regional banking institutions, education, law, manufacturing and biotechnology.

Another 14-member advisory committee with a broad range of expertise oversees the NDSU Center for Technology Enterprise, the business incubator under construction. In addition, quarterly "5:01 Entrepreneur Society" meetings provide an opportunity for investors, entrepreneurs, students and faculty to exchange ideas. A local entrepreneur annually donates $2,000 each for scholarships to five incoming freshman at NDSU to support students' entrepreneurial pursuits. (Those same students continue to receive a $2,000 scholarships each year if they maintain a certain academic standing.)

Additional goals

Among the NDSU Research & Technology Park's goals, besides creating jobs, are increasing incomes and attracting North Dakota natives back to the state. Figures from the U.S. Census Bureau show out-migration is down slightly from the 1990s, but continues to be a major concern. Good job opportunities are the key: NDSU's Center for Nanoscale Science & Engineering includes native North Dakota engineers and technicians with more than 150 combined years of industry experience with companies such as Intel, Micron, Motorola, Honeywell, Imation, Texas Instruments, Hutchinson Technologies, Rockwell Collins and Lucent. North Dakota's 6.4 percent growth in personal income was the second highest in the nation in 2005, due to a variety of factors. Average wages in the state grew 17.4 percent from 2000 to 2004, although still lag the national average.

The Research & Technology Park also works with the state's Commerce Department officials as they seek economic development opportunities. Continually sharing information and successes with the community, its leaders and larger audiences is crucial to the park's success. The Park, NDSU and Fargo have been mentioned in publications such as Wired magazine, Financial Times, USA Today, National Public Radio and others.

Measurable results

During the first five years of existence, $75 million has been invested in facilities and equipment at the NDSU Research & Technology Park. According to a study by Dr. Larry Leistritz, professor of agribusiness and applied economics at NDSU, the total economic impact of construction at the park is estimated at $81.9 million. And of the $100 million annual research budget at NDSU, $78.4 million is spent within the state; another $234.9 million is generated in direct or secondary impacts.

NDSU is currently classified as a university with "high research activity" under the Carnegie classification system. NDSU's specialty areas include visual neuroscience, spintronics, sensor technology, protease research, pharmaceutical sciences, nanotechnology, microelectronics, life sciences, engineering, coatings and polymeric materials, as well as agriculture. Expertise includes specialty coatings for planes, ships, medical devices, statues and artwork. An active licensing program for intellectual property brings $1 million in royalties to NDSU annually.

The National Science Foundation ranks NDSU number 57 among the top 100 U.S. research universities and colleges for federally financed research expenditures for physical sciences. In science and engineering fields, NDSU ranks eighty-fifth in total research expenditures at U.S. public colleges and universities. The university also has been named one of the best places to work in 2006 for individuals pursuing postdoctoral positions, according to The Scientist magazine, which places NDSU in the top 35 research institutions in North America.

"The dynamic mix of faculty and students are key to the success of NDSU's Research & Technology Park," says Philip Boudjouk, PhD, vice president for research, creative activites and technology transfer at NDSU. The Park's success is aligned with NDSU's core competencies. As those areas expand, they contribute to the Park's growth. "It's not necessarily a smooth ride," Boudjouk points out. "But we're in the mix. Our challenge is to stay on that pony."

NDSU's growth also fuels research park success. The university has met its goals of growing student enrollment from 9,700 to more than 12,000; increasing annual research expenditures from $44 million to more than $100 million; and growing the number of doctoral students from 150 to more than 500.

NDSU, North Dakota leaders, its university system and economic development officials have made strides to diversify the state's economy. What was once 55 acres of sunflower field test plots on the northwest edge of campus is now the NDSU Research & Technology Park in which 400 people come to work daily. Another 200 jobs are expected to be created over the next year. Since its groundbreaking in 2001, both educational and business leaders have been excited about the possibilities for collaboration that the park presents.

For more information about the NDSU Research & Technology Park, visit the Web at http://www.ndsuresearchpark.com/.

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1854 NDSU Research Circle North, Fargo, ND 58102
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