North Dakota Center's of Excellence Program by Dennis of the Grand Forks Herald

OUR OPINION: N.D. centers need, should welcome a state assessment


By: Tom Dennis, Grand Forks Herald



Don’t write off North Dakota’s Centers of Excellence program just yet.
Last week, an audit asked whether the program — which is administered by the Department of Commerce — was being adequately assessed. At the time of the audit, it wasn’t, the report declared.

This unsettling finding brought North Dakotans up short and is getting Commerce’s full attention.

But the audit looked only at how well the centers were being assessed. It didn’t examine whether the centers are being successful.

That’s the more important question. And now that stronger assessment tools have been put into place, partly as a result of the audit, taxpayers shouldn’t have to wait long to learn the answer.

Based on Grand Forks’ experience and some other indicators, North Dakotans likely will be pleased with the results.

The Centers of Excellence program is meant to partner campuses with businesses. The state gives grants to selected college and university research efforts. The grants are conditioned on the researchers getting $2 in private-sector or federal money for every $1 in state spending.

“These hubs of research and technology provide a nucleus for new business growth,” the centers’ 2008 Annual Report states. “The model is new to North Dakota, but the first Centers of Excellence program originated more than 50 years ago in California and spawned the world-famous cluster of technology research, innovation and business concentration known as the Silicon Valley.”

The first operational center got its grant in 2005. Oversight was lax for the first two years, in part because there were only a few centers and in part because responsibility hadn’t been fully spelled out, said Shane Goettle, Commerce Department commissioner, in a Herald interview.

The Commerce Department asked the Legislature for authority to monitor the centers and got that authority in mid-2007. The state auditor’s office, in turn, arrived to check up on the assessments in late 2008, 18 months and 11 new centers later.

The Commerce Department had conducted assessments during that time, but not quickly or thoroughly enough, the auditors declared.

Goettle has accepted the audit’s findings and implemented those recommendations that weren’t already being put into place.

That said, one of those earlier assessments deserves a mention, even though the auditors found a math error and some other problems in it.

That assessment is a study of the centers’ statewide economic impact in 2007. Larry Leistritz, professor in the department of agribusiness and applied economics at North Dakota State University, and two other researchers conducted the study.

The study’s conclusion about the Centers of Excellence Program stands: “Although the program is still in its early stages, and most centers are in early stages of development, the economic effects of the program to date are encouraging, the searchers reported.

“With a direct economic impact of $59 million and total impact of $169 million in 2007, the program’s contribution to the North Dakota economy already is substantial.” And as the centers ‘become fully established and partner facilities are developed, the program’s economic contribution can be expected to increase considerably.”

Fresh numbers and other data from the state’s 20-plus Centers of Excellence were due at the Commerce Department on Sept. 30, the end of the fiscal year. Analysts now will conduct the more thorough assessments that the auditors called for.

Grand Forks residents could be forgiven for expecting good results. Centers of Excellence here include the National Center for Hydrogen Technology, the Unmanned Aircraft Systems Center and the Center for Innovation, all at UND.

The centers rank among Grand Forks’ most dynamic workplaces. They’ve created jobs by the dozens and are points of civic pride, winning grants that have matched the state’s contribution by factors of 3 or more to 1.

Around the country, Centers of Excellence-style partnerships have helped bring jobs and growth to the Research Triangle in North Carolina, the Route 128 area in Boston and other academic and high-tech centers. The partnerships need rigorous assessment exactly as the state auditor’s report prescribed. But they’ve worked effectively in other places and show every sign of doing the same here.