2020 VISION The Arizona University System Long-term Strategic Plan 2008-2020 Arizona Board of Regents www.azregents.edu/2020.pdf ARIZONA’S UNIVERSITIES “A top-performing state university system, nationally recognized for excellence in academic and research pursuits that support and stimulate a growing vibrant economy and a high quality of life for Arizonans.” Mission Lifetime Earnings Research Activity Profile of Arizona in 2020 2 3 4 5 6 Goals and Metrics of the Plan 8 Goal One: Educational Excellence 9 10 11 12 14 15 16 18 19 Goal One: Background An Educated Population Achieving the Gold Standard Increased Capacity Alignment of the Educational Pipeline Closing the Gaps College Participation in Low Income Families Strategies for Excellence Goal Two: Research Excellence Goal Two: Background The International Marketplace Research Funding 2020 Target for Research Expenditures Strategies for Excellence Goal Three: Workforce & Community Goal Three: Background Community Engagement Workforce Impact High Demand Fields Strategies for Excellence Goal Four: Productivity Goal Four: Background Education Costs Evaluating Progress Strategies for Excellence 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 TABLE OF CONTENTS TABLE OF CONTENTS Introduction to the Plan 1 INTRODUCTION TO THE STRATEGIC PLAN INTRODUCTION TO THE PLAN The Mission • To increase the educational attainment of Arizona citizens by producing enough high-quality university degrees for the state to be nationally competitive by the year 2020. • To increase the prominence of the system’s research enterprise so that it can contribute to the Median Earnings by Education: 2006 The Arizona Board of Regents presents in this 2020 Vision a framework for the Arizona University System to improve the economic strength of our state and quality of life for Arizonans over the next 12 years. This plan intensive efforts to provide baccalaureate access to all regions of the state. Why the Plan is So Important Educated Arizonans will enjoy greater economic prosperity All Arizonans, not just those with a degree, will benefit as more become educated Arizona will reap both economic and social rewards from university research Moving Arizona’s economy forward will demand higher paying, more economically diverse jobs that require a more highly educated workforce Connecting the work and service of the universities to the communities will improve the quality of life in Arizona $46,435 $27,384 $20,506 programs not offered by public institutions in the state, growth in the research enterprise, and increasingly $18,868 Board, including the establishment of a medical college in Phoenix, development of new health professions No Diploma (Less Than 9th Grade) $35,724 Research Excellence, Community Engagement and Workforce Impact, and Productivity. This plan builds on a foundation manifested in previous strategic planning efforts of the universities and the $55,445 lays out a series of touchstones for this ambition organized around four key themes: Educational Excellence, $78,212 paying jobs in Arizona. $85,857 • To provide the educated workforce needed to fill shortages and to stimulate demand for higher IMPORTANCE OF THE PLAN knowledge economy and improve the quality of life in Arizona. 3 High-School Diploma No Diploma (9th-12th Grade) Bachelor’s Degree Associate’s Degree Professional Degree Master’s Degree Source: U.S. Census Bureau, Current Population Survey, Educational Attainment in the U.S. : 2005 Doctoral Degree MORE EDUCATION HIGHER LIFETIME EARNINGS The more education a person attains, the higher that person’s lifetime earnings. The financial impact over a person’s working life is significant. Someone with a bachelor’s degree can expect to earn, on average, over $1 million more than someone with only a high school education.1 Furthermore, this differential between the lifetime earnings of college graduates and high school graduates has increased over time. For example, full-time male workers between the ages of 35 and 44 experienced an increase in this differential from 38% between 1980-84 to 94% between 2000-2003.2 population with a bachelor’s degree raises wages in all educational attainment groups, even those without a college degree. This benefit ranged from about 1.2% for workers with some college to almost 2% for those with less than a high school diploma.3 2 2020 Vision calls for Arizona to add between 670,000 and 700,000 new bachelor’s degree educated workers over the period between 2006 and 2020 which would increase the proportion of our adult population with a bachelor’s degree between 3.7 and 4.1 percentage points. Lifetime Earnings by Education $4.4 IMPORTANCE OF THE PLAN Additionally, people without a degree also benefit as others become more educated. A recent study found that a 1 percentage point increase in the proportion of a state’s $1.0 $1.2 No Diploma Associate’s Degree High-School Diploma 1 $2.5 $1.6 $2.1 $3.4 Lifetime Earnings in Millions 4 Bachelor’s Degree Master’s Degree Doctoral Degree Professional Degree Census 2000 Dennis Hoffman, March 2008, Quantitative examples of the financial and economic benefits of higher education 3 Enrico Moretti, Journal of Econometrics, “Estimated Social Return to Higher Education: Evidence from Longitudinal and Repeated Cross-Sectional Data,” 2004 2 More Research Activity – Higher Economic Returns and Quality of Life This plan focuses on increasing the number of college-educated citizens so we can reap the benefits just discussed; however, the universities also contribute a great benefit to Arizona through their research. RESEARCH ACTIVITY University research expenditures flow down to private-sector activities, having significant effect on both the level of industrial research and development and the transfer of technology to the public. This in turn creates innovations and higher paying jobs in the same fields; the average real wage in urban areas with research universities is nearly $3,300 higher than the average wage in all urban areas, and the per capita income While most studies of the impact of research revolve around spending or money circulating in the economy— the creation of jobs, wages and sales—knowledge creation itself is important.1 Significant knowledge is created by university research and can be measured by inventions, patents, and start-up companies, all of which fuel the private sector and translate into jobs—high paying, highly skilled jobs. The full impact of research is hard to measure, but several studies suggest two impacts that contribute to the multiplier effect of research spending: • Direct impact of university expenditure of research funds; and • Indirect impact on private sector companies that license university technology and start-up and spinoff companies, including general corporate research and development operations. These studies suggest that the university research multiplier could be as high as 7 or 8. Therefore, a $100 million research grant could have a total impact in Arizona of about $750 million.2 • More college-educated people produce benefits, but to achieve optimal impact it must be coupled with economic development strategies stimulating more higher quality jobs • Financial benefits of research are important, but benefits to the quality of life include the infusion of well-trained graduates into the economy and services for our communities 1 2 Council for Community and Economic Research Cost of Living Index Hoffman, 2008 IMPORTANCE OF THE PLAN differential is about $2,800. 5 Achieving either the Silver or Gold standard will depend PROFILE OF ARIZONA IN 2020 heavily on how well the What will Arizona look like in 2020 if the plan is successful? The following chart illustrates specific outcomes of the plan ranging from the educational attainment rates to degree production and performance targets necessary to meet these objectives. and University sectors are The outcomes and assumptions are displayed in a range. There are three standards referred to as IMPORTANCE OF THE PLAN Bronze, Silver, and Gold. Achieving any of the standards will result in increases in performance, but the magnitude of change is differentiated within a range. The differentiation reflects the extent to which success will depend on the performance of other sectors, not just the university sector. able to attract more students through the pipeline and for more of them to be prepared Profile of Arizona Now and Arizona in 2020 Arizona Now K-12, Community College, to succeed. Arizona in 2020 Bronze Target Silver Target Gold Target 26% 29% 30% 20,200 28,200 36,000 78% Freshman Retention Rate 80% 84% 86% 56% 6-Yr Graduation Rate 57% 59% 65% 45% College Going Rate (from K-12) 50% 52% 53% 8,400 Community College Transfers 8,900 16,000 24,000 5,700 Community College Transfers Who Go On To Earn A Bachelor’s Degree 5,800 10,500 15,700 105,400 128,300 155,800 the entire educational pipeline. Universities also have a role $822 Million $1.7 Billion $1.8 Billion in making sure the pipeline is strengthened and continue to 6 25% Of Adults Have Bachelor’s Degree 1 Million Adults 19,100 Bachelor’s Degrees Produced Annually In Arizona University System 99,700 Undergraduate Enrollment $783 Million Total Research Expenditures In some ways, this plan extends beyond the ambition of our own university system, since a large part of the plan revolves around increasing the educational attainment rate of the entire state. Achieving either the Silver or Gold standard will depend heavily on how well the K-12, Community College, and University sectors are able to attract more students through the pipeline and for more of them to be prepared to succeed. In other words, the university system alone lacks the ability to reach either the Silver or Gold standard. These levels of increase in the system can be achieved only if significant change occurs throughout share in this responsibility through collaborative programs and partnerships with both sectors. PROFILE OF ARIZONA IN 2020 or just over 1 million Arizonans, have at least a bachelor’s degree. This plan outlines a range of ambitious targets for improving this statistic so Arizona can enjoy all the rewards associated with an educated population. The current economic crisis will impact this plan The current economic crisis has punished Arizona more deeply than any other state in the nation. Achieving the goals and objectives of this plan will depend on the ability of the system to minimize the impact of drastic reductions in state appropriations, not only to the higher education sector, but also to our K-12 and community college pipeline. In the worst-case scenario, achieving the gold targets could be put out of reach and the Silver targets very challenging. The framework and the priorities of the long-term plan will drive strategies for managing the impact over the short term while the economy is recovering. In addition, the longer-term horizon of the plan allows for thoughtful planning in spite of short-term economic setbacks. IMPORTANCE OF THE PLAN Currently, just over 25% of our adult population, 7 GOALS AND METRICS OF THE PLAN 01EXCELLENCE EDUCATIONAL GOAL ONE “ To be nationally competitive in the percentage of Arizona’s citizens with a high-quality bachelor’s degree by providing affordable access through a well-coordinated and aligned system.” 01 BACKGROUND GOAL ONE Projected Percent Change in Total Population, 2000 – 2025 In 2006, Arizona was the fastest-growing state in the nation and is regularly among the top Nevada Arizona Florida Texas Utah Idaho North Carolina Georgia Washington Oregon Virginia Alaska California Colorado New Hampshire Maryland Delaware South Carolina Tennessee Minnesota United States Hawaii Arkansas New Mexico Vermont Montana New Jersey Wisconsin Missouri Kentucky Maine Oklahoma Indiana Rhode Island Massachusetts Kansas Connecticut Alabama Mississippi Michigan Illinois Wyoming Louisiana South Dakota Nebraska Pennsylvania New York Iowa Ohio West Virginia North Dakota 0 growth states. As can be seen in the figure below, tremendous growth (shown in white) is predicted between 2000 and 2020, with even more dramatic growth between 2020 and 2040. EDUCATIONAL EXCELLENCE 10 Key Indicators of Progress Number of bachelor’s degrees awarded Number of Master’s degrees awarded Number of Arizona community college students who transfer to a university Number of Arizona community college transfer students awarded bachelor’s degrees Educational quality as reported in National Survey of Student Engagement (NSSE) Cost of attendance as a percentage of Arizona median family income Only Nevada is expected to grow faster than Arizona between now and 2025. The national average expected growth rate is about 24%, with Arizona at just under 86%. Population Growth 2000 Source: ASU Decision Theater 2020 2040 10 20 30 40 50 60 93.3 85.8 24.2 Source: U.S. Census Bureau Currently, just over 1 million Arizonans—barely 25% of our population, have at least a bachelor’s degree. This plan outlines a range of ambitious targets for improving this statistic so that Arizona can enjoy all the rewards associated with an educated population. AN EDUCATED 40 POPULATION Average Population with a College Degree MA 35 MD CO VT NY HI TN RI IL CA 30 UT MT KS NH VA NJ CT DE NE OR GA AK ME ND NM AZ FL MI SD IA ID OH SC WY OK TN IN AL NV LA KT 25 20 MS “ States with more AR WV 15 $15,000 $20,000 $25,000 $30,000 $35,000 Average Per Capita Income college graduates have stronger economies… Numerous studies and data bear out a strong correlation between educational level and personal income, productivity, civic participation, life expectancy, employment status and community strength. The quickest way to increase the per capita income is to increase the percentage of Arizonans with a bachelor’s degree, which is at the heart of this plan. Benefits of Higher Education Public economic benefits Increased tax revenues, greater productivity, increased consumption, increased workforce flexibility, decreased reliance on government financial support Individual economic benefits Higher salaries and benefits, higher employment levels, higher savings levels, improved working conditions, personal/professional mobility Public social benefits Reduced crime rates, increased charitable giving and community service, increased quality of civic life, social cohesion, appreciation of diversity, improved ability to adapt and use technology Individual social benefits Improved health and life expectancy, improved quality of life for children, better consumer decision making, increased personal status, more hobbies and leisure activities lower unemployment and poverty rates, higher ranking on measures of economic strength.” - The Information Technology and Innovation Foundation 01 EDUCATIONAL EXCELLENCE College Degrees vs. Per Capita Income 11 01 GOLD STANDARD ACHIEVING THE The 2020 Vision calls for Arizona to be nationally competitive in educational attainment by 2020. The plan defines this ambition within the following range: • Bronze Standard — the increase in educational attainment based mainly on changes in population, assuming some increases in performance rates, such as graduation and retention rates. It will be more difficult to maintain current performance levels as demographic changes require greater resources EDUCATIONAL EXCELLENCE 12 to serve a larger concentration of students who historically have lower college preparation and college-going rates. • Silver Standard — the increase in educational attainment assuming modest improvements in performance from other educational sectors in the pipeline and ambitious improvements in performance from the Arizona University System necessary to achieve the national average by 2020. • Gold Standard — the increase in educational attainment assuming very significant improvements in all sectors of the educational pipeline, including early education, K-12, community colleges, private colleges and universities, and our three public universities. This target represents what will be required of all sectors in order to achieve Governor Napolitano’s call in her January 2008 State of the State address to double the number of bachelor’s degrees produced in the Arizona University System. Achieving the Gold Standard — doubling the number of bachelor’s degrees produced — would take Arizona above the national average in educational attainment by 2020. Bachelor Degree Targets 40,000 Moving Arizona to National Average 30% Gold Standard 38,000 34,000 U.S. Rate 29% Silver Standard Bronze Standard 36,000 36,000 32,000 27% 30,000 26% 28,000 28,200 26,000 Gold 28% Silver Bronze 25% 24% 24,000 23% 22,000 20,200 20,000 22% 18,000 2000 2001 2002 2003 2004 2005 2006 2010 2015 2020 2000 2001 2002 2003 2004 2005 2006 2010 2015 2020 What will it take for Arizona to achieve or exceed educational parity with the rest of the nation? • Decision Theater models quantify the challenge through a dynamic decision support tool • Assumptions concerning population projections crucial to the modeling was based on the most sophisticated projections available from the U.S. Census Bureau1 • Final analyses show that as much as 28.7% of the adult population in the U.S. will have a bachelor’s degree by 2020—a full 3.7% higher than Arizona’s current 25% ACHIEVING THE GOLD STANDARD 01 • Arizona must add more than 670,000 bachelor’s degree holders to reach national parity So what will this mean for Arizona? with a bachelor’s degree • Silver standard would achieve national parity in adults with a bachelor’s degree at 28.5% • 2020 university graduates are already in the 5th grade — thus success will require immediate and concerted efforts from all sectors • Rapid improvements and immediate investments to increase performance in K-12 and connections between community colleges and universities will be critical to achieving these goals Demographers predict that in 2020, about 1 of 3 Americans will have a bachelor’s degree. In 2000, fewer than 1 in 4 Arizonans Moving Arizona Educational Attainment to National Average Population 25 Years and Older 6 Population in Millions 5 With a Bachelor’s Degree or Higher Without a Bachelor’s Degree had a bachelor’s degree. If past trends continue, Arizona will fall short of the 4 3 national average by about 2 220,000 college graduates. 1 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Source: DES PopTAC Approved Projections March 2006 1 Day, Jennifer Cheesman and Bauman, Kurt J. Have we reached the top? Educational Attainment Projections of the U.S. Population Working Paper Series No. 43, Population Division, U.S. Census Bureau: Washington D.C. May 2000 EDUCATIONAL EXCELLENCE • Gold standard moves Arizona above the expected national average to 30% of adults 13 01 CAPACITY INCREASED EDUCATIONAL EXCELLENCE 14 While degree production is the standard measure of the goals, achieving the degrees requires a Achieving these goals will require dramatic new investments substantial increase in enrollment capacity in the system. The chart below illustrates the level of to support larger numbers of students as well as changes capacity change that must be addressed by 2020 in order to achieve the degree targets. In 2008 in system design that may include the creation of new the undergraduate enrollment in the Arizona University System was just under 100,000 students educational platforms and campuses, the expansion of on-line (about 130,000 in total enrollment). The Gold standard would require almost a 60% increase and distance education programs, more 2+2 programs, and to just over 156,000. The Silver standard would require a 47% increase to about 128,000 other collaborative partnerships. In addition, the system would undergraduates. have to deliver academic programs by every means possible, • Achieving the Gold standard would add about the same number of students in 12 years than currently attend Arizona State University (one of the largest universities in the nation) • Achieving the Silver standard would add more students in 12 years than currently attend Northern Arizona University Undergraduate Enrollment Targets 200,000 190,000 180,000 170,000 160,000 150,000 Gold Standard Silver Standard Bronze Standard 155,800 140,000 130,000 128,300 120,000 110,000 100,000 105,400 90,000 2008 2020 to every corner of the state, and to students of all ages — this without reducing the value of an Arizona university diploma. Arizona ranks low in the percentage of students in our K-12 system that proceed on to a bachelor’s degree. The U.S. average is just over 38% compared to about 30% in Arizona. If Arizona is to achieve the aggressive degree production outlined in the 2020 Vision, more work will be needed to shore up this pipeline and encourage more of our K-12 students to plan, prepare, and succeed in obtaining a bachelor’s degree. The chart below illustrates the pipeline issues by showing how many students out of every 100 students in the 9th grade make it through the system and how Arizona compares to the United States and to best-performing states. Strengthening the pipeline will require: • Successful collaborative partnerships between and among all educational sectors with ALIGNMENT OF THE EDUCATIONAL PIPELINE 01 clearly articulated and aligned expectations higher education • Smooth transitions from one sector to the next • Support for Governor’s and P-20 policy changes aimed at ensuring that more students Achieving the 2020 Vision are prepared to succeed in college and careers is attainable only to the Initiatives include: extent we are successful • Increasing high school graduation requirements in motivating more of our • Expanding early college options • Improving rigor of academic standards K-12 students to plan for, • Improving assessments • Creating multiple pathways to earn a high school diploma prepare for, and succeed in Educational Performance earning a bachelor’s degree. 100 Best Performing State 91.3 United States Arizona 80 68.7 60 64.3 57.3 40 42.3 42.0 38.8 30.7 20 19.3 Graduate from High School Source: Tom Mortenson Directly Enter College 29.7 27.3 26.9 Enroll in Second Year 18.4 24.9 15.3 Graduate within 150% of Program Time Age 25-44 with Bachelor’s Degree EDUCATIONAL EXCELLENCE • Innovative methods to engage first-generation, rural, and non-traditional students in 15 01 THE GAPS CLOSING The 2020 Vision assumes that the opportunity to earn a bachelor’s degree will be available Evidence suggests that in order to achieve the 2020 Vision, to all Arizonans. In fact, the plan will not succeed without addressing the participation and we must address several college participation and success achievement gaps of Arizona, especially those segments that have participated in college at gaps in our system: lower rates. Of particular interest is the forecasted growth in the Hispanic population. The chart EDUCATIONAL EXCELLENCE 16 below details the shifts in demographics expected over the next 12 years. In 1990 over 70% of our population was white, which is expected to decline to less than 50% by 2020. By contrast, the Hispanic population is projected to move from less than 20% in 1990 to just under 40% by the year 2020. Other Minority Hispanic White 9.6% 2020 38.4% 48.9% 9.0% 33.7% 2010 54.0% 7.7% 2000 26.9% 61.6% 10.2% 18.6% 70.3% 0 0.0% (2) Low income families (3) Younger generation in Arizona (4) Students from rural areas (5) Non-traditional students Population Distribution 1990-2020 by race and ethnicity 1990 (1) Racial and ethnic gaps 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% CLOSING THE GAPS 01 Additionally, the chart below shows the pipeline of high school students necessary to achieve the degree production needed for the goals over the next 12 years to 2020. The university system must reach out to these underserved populations with resources and strategies so that transitions from year to year. Without specific and effective strategies to close the gaps, parity with the national average by 2020 will be unattainable. College participation among Arizona’s low income families is also well below the Average High School Graduates by Race and Ethnicity 2017 -18 2016 -17 2015 -16 2014 -15 2013 -14 2012 -13 2011 -12 2010 -11 2009 -10 2008 -09 2007 -08 2006 -07 2005 -06 2004 -05 national average and likely to get even worse without White, Non-Hispanic Native American Asian/Pacific Islander Black, Non-Hispanic Hispanic Private Schools 0 22,500 45,000 67,500 90,000 policy intervention. In 2006 only 16% of children from low income families went to college compared to over 23% nationally. EDUCATIONAL EXCELLENCE more can be successful. Sufficient support services will be needed as well, to ensure smooth 17 Percentage Difference Between Younger (Age 25-34) and Older (45-54) Populations with College Degrees, Associate and Higher, 2005 1 Part of the 2020 Vision involves ensuring that financial barriers do not prevent students from low and the national average on participation in college for low income students. A key to success will desire to maintain affordability for all students. This policy balance will incorporate tuition policy, state funding policies, and financial aid policies. Three additional points of emphasis include the younger generation in Arizona, students in rural -3.6 -3.7 -3.8 areas, and adult non-traditional students. Universities must recruit enrollments beyond traditional first time freshmen in order to meet the goals. Strategies to engage a diverse group of students will -4.2 be important, especially since the predicted number of K-12 students in the pipeline over the next -4.5 college-educated younger and older generations. Furthermore, data suggest this gap may be widening. -6.6 -6.8 The chart to the right illustrates how Arizona ranks in the proportionate difference between our -5.4 -5.5 12 years, even with increases in college going rates, will be insufficient to meet the enrollment and degree demands of the Silver and Gold standards. Washington Oklahoma Florida South Carolina Oregon Maine Connecticut Colorado Texas California Nevada Idaho Alaska Arizona Vermont Hawaii New Mexico -0.6 -0.8 -0.8 -1.3 -1.5 -1.7 -1.8 -1.9 be our ability to align the system’s policies to balance the need for additional resources against the 0.4 0.3 0.1 0.1 income families from participating in college. The chart above shows a significant gap between Arizona 0.9 0.6 0.6 18 1.5 1.3 1.2 1.2 1.1 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Source: Arizona Postsecondary Commission – November 8, 2007 – Phoenix, AZ www.postsecondary.org -8 -4 0 4 8 Source: U.S. Census Bureau, 2005 ACS 16.1% 15 3.0 College Participation Rate (%) Arizona 3.6 3.5 16.3% 6.2 20.0% 4.2 4.2 3.9 3.8 20 23.8% 4.9 4.6 4.5 4.4 U.S. 25 2.4 1.8 1.8 1.6 EDUCATIONAL EXCELLENCE 30 6.9 6.7 6.3 35 South Dakota Iowa Minnesota Nebraska New York Pennsylvania Wisconsin Mississippi New Hampshire Indiana Ohio North Dakota Massachusetts West Virginia Illinois Louisiana Kentucky Rhode Island Missouri Kansas Tennessee New Jersey Michigan Arkansas Alabama Georgia Maryland United States Utah North Carolina Delaware Montana Wyoming Virginia 7.5 Arizona College Participation Rates for Students from Low income Families FY1993 to FY2006 10.0 9.4 01 LOW INCOME FAMILIES COLLEGE PARTICIPATION IN 12 MACRO STRATEGIES FOR EDUCATIONAL EXCELLENCE: 1. Align the educational pipeline a. Strengthen existing and support new partnerships with all educational sectors to facilitate and improve the pipeline to university education (enrollment initiatives, curricula alignment, STRATEGIES FOR EXCELLENCE 01 teacher education improvements, etc.) b. Increase transfers and degree completions from the community colleges to the universities a. Increase opportunities for students from low income families and from rural areas with low educational attainment rates b. Increase the number of younger adults in the population with a bachelor’s degree c. Close the opportunity and success gaps for underserved ethnic and racial groups of students d. Provide student support such as mentoring, tutoring, and advising 3. Plan for and incentivize higher degree production a. Provide incentives and rewards to increase the degree production and to serve additional EDUCATIONAL EXCELLENCE 2. Close opportunity and success gaps students b. Expand the capacity to serve additional students (examine potential for creative solutions— joint admissions (hybrid) models, distance learning, technology, new branch campuses, 2+2 programs, and other collaborative partnerships, etc.) 4. Minimize financial barriers for low income families a. Improve tuition policies to ensure affordability for low income families, to balance state and student share of the costs, to increase predictability, and to ensure resources are available to achieve the plan 19 RESEARCH EXCELLENCE “To increase the research capabilities and performance of the Arizona University System to a level of competitive prominence with peer rankings of top American research universities.” 02 GOAL TWO “Greener” energy sources, crops that thrive in the desert, cheaper and faster communications BACKGROUND devices, ways to secure international borders but still promote trade, personalized medicine, 02 protecting our country and the world from pandemic disease—advances like these are the products of intense research and development and are needed now more than ever. Much of the innovation that improves people’s lives and drives societal change springs in universities. Universities around the world serve as incubators for innovative activity and educate a populace that is creative and capable. Key Indicators of Progress Total research expenditures Number of doctoral degrees awarded RESEARCH EXCELLENCE from research performed in universities, by researchers and scholars educated and trained Number of invention disclosures transacted 21 “ Twenty-nine of the top thirty high-technology metropolitan areas in the U.S. are home to, or adjacent to, major research universities. The presence, or absence, of high-technology enterprises explains most of the difference in economic growth across U.S. metropolitan areas.” - Milken Institute; America’s High-Tech Economy, July 13, 1999. 02 MARKETPLACE THE INTERNATIONAL U.S. Losing Position in International Market U.S. universities have been international leaders in generating research and development and have helped to fuel the strongest economy, the greatest affluence, and among the most well-educated citizenry known. Some fear that the U.S. may soon lose its position as the world’s leader in science and technology. This trend is coupled, almost certainly causally, with a declining level of basic science literacy in the U. S. RESEARCH EXCELLENCE 22 The university enterprise, and research-enriched education it provides, constitute the essential foundation of a knowledge-based society. Yet today the maintenance of that foundation is seriously threatened. “ …the age of the global knowledge economy is firmly taking root… Of particular importance in today’s super-charged technology world is the convergence of technology and the value it brings into new markets and technology advances… This new emphasis on technology convergence is most pronounced in academic research where scientific discoveries and advances are often found at the intersection of key fields…” - Advancing Arizona’s Innovation Economy, Arizona Economic Resource Organization, 2008. RESEARCH • In recent years federal support for university research has not kept pace with past growth — funding levels are basically flat • Non-defense related support has decreased since 2004 • Private sector investment in research is high but not focused on the basic research that ultimately must form the basis for applications FUNDING The Transfer of New Knowledge The transfer of new knowledge is crucial to the quality of life in Arizona and the economy. Better solutions to difficult problems facing society make a profound and measurable impact on the well-being of Arizonans. Return on Investment All three of Arizona’s public universities can demonstrate through economic impact studies that the state gains a solid return on investment for funds that go into the research enterprises. Even though the Arizona Board of Regents’ Technology and Research Initiative Fund (TRIF) is a small portion of the entire research enterprise, it provides a strong illustration of this point. TRIF includes a myriad of examples of strong returns on investments from the various programs at the three universities. In 2008 The University of Arizona’s investments from TRIF yielded about $5.70 for every $1.00 invested. In the same year, Arizona State University will generate almost $4.00 in grant and contract expenditures for every dollar invested in research from returned overhead and TRIF. Northern Arizona University is generating $3.50 of competitive funding for every TRIF dollar invested. 02 Benefits of New Knowledge More licenses, patents, spin-offs and venture capital investment in Arizona Increased national and international recognition — improves competitiveness in the international marketplace Better solutions to difficult problems facing society — makes a profound and measurable impact Better researchers = better educators — brings innovation and discovery to the classroom, which will better prepare Arizona’s workforce RESEARCH EXCELLENCE The Funding Challenge: 23 02 EXPENDITURES 2020 TARGET FOR RESEARCH The 2020 target for building the research enterprise is measured by total research expenditures in the three universities. Research expenditures, as defined by the National Science Foundation as a basis for national rankings of universities, are a measure of the total R&D activity of an institution, including that funded by extramural grants and contracts and that performed with institutional support. Increased doctoral degree production is essential for the creation and transfer of new knowledge. Doctoral students are a critical part of the university research workforce. If we can keep them in Arizona, the new Ph.Ds we produce will The goals for the Arizona University System were generated by the Vice Presidents for drive the research engine of tomorrow and help create new Research at the three universities. Rather than a simple one-size-fits-all analysis, each university high wage jobs. made estimates based on assumptions and goals consistent with its particular mission; and the goals for Gold, Silver, and Bronze levels of growth reflect the differences in each unique mission. While research is important at all three universities, the focus of research activities and the overall magnitude varies. Translating Research to Serve Arizona Research leads to innovation that has the capacity to improve the human condition. Arizona’s public universities Collectively, the System’s research expenditure levels were about $780 million in 2007. The do research that is responsive to community needs and push Bronze level of research expenditures are predicted to reach $822 billion in 2020. The Gold their discoveries and inventions into the community for scenario extends this to $1.8 billion in 2020. practical and beneficial use in many ways. Formal technology transfer through the licensing of intellectual property is a key Projected FY 2020 Research Expenditures Million EDUCATIONAL EXCELLENCE 24 Doctoral Degrees Produced $2,000 $1,800 $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 $0.0 NAU ASU UA $1,693 $1,821 facet of a broader portfolio of knowledge transfer. Licensing NAU ASU UA provides a mechanism for entrepreneurial commercialization of products and generates revenues that can be reinvested in the universities’ research enterprises. New knowledge also is transferred in many ways that are harder to measure but $822 have critical impact. These mechanisms of dispersion include $783 public lectures and workshops, county extension services, telemedicine, continuing education for working professionals, and diverse forms of public service. FY 2007 ACTUAL FY 2020 BRONZE FY 2020 SILVER FY 2020 GOLD $27 $224 $532 $28 $236 $558 $40 $655 $998 $50 $730 $1,041 Actual annual research expenditures will be those reported to NSF 1. Increase access to new and existing sources of federal and state research support: a. Strengthen information-gathering capacity at all three universities for the early STRATEGIES FOR EXCELLENCE identification of federal and state research opportunities and promote collaboration among the three universities b. Develop support for a powerful research infrastructure distributed across the universities as appropriate to their missions and opportunities to advance the larger research agenda; coordinate activities in areas most likely to provide future economic benefit to Arizona c. Create a long-term and sustainable research funding plan for Arizona that supports research and innovation and particularly the research agenda in areas key for Arizona 2. Recruit, develop, and retain top research faculty and faculty teams a. Increase support for top-quality faculty who can compete and succeed in the peer-reviewed granting environment b. Increase support for Master’s and Ph.D.-level education, both as a faculty recruiting tool and as a tool for developing the workforce needed for a knowledge-based economy; provide incentives for Post-doctoral students and research scientists to locate in Arizona 3. Promote the transfer of new knowledge into the Arizona and global communities a. Support and provide incentives to facilitate technology transfer and commercialization of intellectual property, and to encourage entrepreneurship activities from research faculty b. Establish strong clinical and corporate partnerships both inside and outside Arizona to improve the translation of research into practice 02 “ To compete in the global economy, the US depends on its ability to conduct basic and applied research and then translate that research into technological innovations. Economic growth results when the commercialization of technology takes place.” - National Governors Association, 2007 EDUCATIONAL EXCELLENCE MACRO STRATEGIES FOR ACHIEVING RESEARCH EXCELLENCE 25 WORKFORCE & COMMUNITY “To utilize research, economic development, community engagement, and service contributions of the universities to create and disseminate knowledge to strengthen Arizona’s economy and improve Arizona’s quality of life.” 03 GOAL THREE GOAL THREE Community Engagement and the Arizona Economy BACKGROUND 03 America’s public university system is founded on three primary missions: teaching, research, and transfer and infusion of well-trained graduates into our economy, but also through programs such as forest health and environmental sustainability efforts, mentoring and professional development of teachers, community planning or development efforts, Cooperative Extension programs and telemedicine. Our universities also host extensive public access programs, whether through art or research museums or direct-participation outreach programs. Moreover, the universities are directly impacting the entire educational system in Arizona, providing extensive support to the state’s K-12 system through training, curriculum development and the development of new teaching methodologies and technologies. A recent report by the National Association of State University Land Grant Colleges (NASULGC)1 noted that engagement is a fundamental and essential characteristic of public higher education equal with learning and discovery. The authors noted that while universities use learning and discovery to educate students and extend knowledge to communities, they must take this effort further by “fostering interaction with communities to assure that students and university-based knowledge provide more direct benefits to society.” Key Indicators of Progress Impact of community engagement activities Total income and expenditures related to service and engagement activities Number of degrees awarded in high demand fields 1 NASULGC position paper dated Oct 26, 2007, “NASULGC on Engagement” “ …institutions do not engage in occasional community service, but rather make a sustained commitment to the economic, social, and cultural vitality of communities and regions through collaborative leadership on key issues.” - AASCU on Regional Stewardship, 2005 WORKFORCE & COMMUNIT Y service or community engagement. Our communities benefit not only through formal technology 27 03 ENGAGEMENT COMMUNITY Sharing knowledge through service mechanisms drives an economy through direct and early adoption of that knowledge. Further, community engagement often most directly expresses the fundamental public understanding of a university’s role in developing and delivering that knowledge. Our universities must partner closely with our communities to assure economic WORKFORCE & COMMUNIT Y 28 success for Arizona, and our plan specifically encourages and evaluates that engagement. In “The Rise of the Creative Class,” Richard Florida notes the importance of livable and engaged communities in advancing an economy. Universities are a critical part of a successful community, not only through degrees granted and the resulting increase in earning capacity and tax revenue, but also through the exposure to arts, culture, new technology, cutting-edge information, and the provision of services uniquely suited to the capabilities of our universities. In addition, engagement has a direct impact on the nature of our students’ educational experience. “ Public engagement is a fundamental and essential characteristic of public higher education… an equal with learning and discovery.” - NASULGC on Engagement, 2007 WORKFORCE IMPACT 03 While this plan has at its core the goal to increase educational attainment of Arizonans, the types of degrees produced and their impact on Arizona’s economy are critical measures of success in meeting workforce demands. Creating a stronger economy is not just about degree production; it role here by disseminating practical knowledge to help advance Arizona industry, spinning off and attracting new companies, and producing graduates with the engaged and relevant experience which allows them to have a more immediate impact in those companies and in our communities. According to a recent study released by the National Center for Higher Education Management Systems (NCHEMS), the state’s 12 industries of opportunity account for about 30% of Arizona’s employment. Over the past 15 years, it has become more important to have a college degree in these major Arizona industries, as all but one have increased the percentage of their employees with college degrees over that time period. A recent study by Public Works shows that almost all of these occupational areas that pay a livable wage will require some postsecondary education.1 Arizona’s economy will advance only as we rise to meet the need for an educated population. “ High levels of ‘educational capital’ are key to the economic development of their states and the quality of life of their citizens.” - Ewell, 2003 1 “Education to Work: Is Arizona Prepared, The Alignment Project Report.” Public Works, 14, February 2006 WORKFORCE & COMMUNIT Y also requires an increase in demand for greater numbers of high paying jobs. Universities play a 29 03 FIELDS HIGH DEMAND WORKFORCE & COMMUNIT Y 30 The chart below illustrates the need to address high demand fields such as health-related The 2020 Vision calls for increases in the kinds of degree occupations, teacher education, business, and science, technology, engineering, and production that will benefit the workforce and support the mathematics (STEM) fields. Openings projected in these fields through 2025 will require a economy of Arizona in 2020. These fields include education, workforce enabled with a college education that goes beyond simply holding a high school science, technology, engineering and math (STEM), health diploma. Further, we will expect our universities to enhance the performance of Arizona’s professions, medicine, and other high demand fields to be economy by embedding and engaging our universities in Arizona’s communities and meeting identified as further analyses become available. the growing need of our state for relevant knowledge, whether disseminated through our graduates, through sharing that knowledge with Arizona industry and communities, or through other mechanisms of knowledge diffusion. Projected Annual Shortages in Arizona Occupations, 2005-2025 (Annual Openings Minus Annual Degree Production) Nursing Business Administration, Management & Operations Real Estate Teacher Ed/Prof. Dev., Specific Levels/Methods Teacher Ed/Prof. Dev., Specific Subject Areas Allied Health Diagnostic, Intervention & Treatment Mental/Social Health Svcs. & Allied Professions Mechanical Engineering Technologies/Technicians Public Administration Accounting & Computer Science Family, Consumer/Human Sciences Business Svcs. Entrepreneurial & Small Business Operations Cosmetology & Related Personal Grooming Svcs. Taxation Legal Support Services Electrical, Electronics & Communications Engr. Rehabilitation & Therapeutic Professions Mechanical Engineering Computer Engr. Technologies/Technicians Pharmacy, Pharmaceutical Sciences & Admin Special Education & Teaching Clinical/Medical Lab. Sciences & Allied Professions 3,986 1,831 1,330 1,310 1,195 702 625 603 586 555 547 537 525 474 300 286 265 260 247 233 108 53 0 500 1,000 Source: Arizona Dept. of Economic Security: NCES, IPEDS Completions Surveys (2003-04 to 2005-06) 1,500 2,000 MACRO STRATEGIES FOR COMMUNITY ENGAGEMENT AND WORKFORCE IMPACT 1. Expand partnerships with business and community a. Increase the number of partnerships with business, industry, government, community, STRATEGIES FOR EXCELLENCE 03 and educational entities to stimulate Arizona’s economic vitality b. Develop mechanisms for incentivizing partnership opportunities which have a direct and communities through the sharing of new knowledge, processes and technologies 2. Advance Arizona’s communities through more extensive service and engagement a. Develop comprehensive system-level survey tools to evaluate community support for university-based service activities b. Advance Arizona’s quality of life through measurable knowledge dissemination and public programs aimed at health, environmental and regional stewardship, community and economic development, life-long learning, and access to arts and culture c. Evaluate federal, state and community investment in engagement activities and create processes for leveraging those investments for increased service output 3. Prepare Arizona’s workforce for the knowledge economy a. Identify high demand fields and increase the production of degrees in these fields in collaboration with educational and community partners b. Develop new pathways for workforce training and degree attainment for non-traditional and adult populations WORKFORCE & COMMUNIT Y impact on Arizona’s economy, with direct and measurable benefits to Arizona industry 31 PRODUCTIVITY “To maximize the use of existing resources so that the system can produce greater numbers of degrees and with greater efficiency of resources per degree without sacrificing quality.” 04 GOAL FOUR This strategic plan calls for aggressive increases in the production of degrees at the three public universities, which could require adding into the system as many as 80,000 undergraduate students by 2020. The reality of finite state resources combined with the magnitude of funding needed to serve such a large increase in student population illustrates why productivity will be so important. The system will need to assure effective and efficient expenditures per degree while finding ways to maintain quality. The strategies incorporated in the plan seek to provide this crucial balance. The productivity component of the plan encompasses three important policy issues: GOAL FOUR BACKGROUND 04 (1) Producing more degrees more efficiently without sacrificing quality (includes maximizing use of current resources) (2) Determining adequate funding levels to achieve the plan while factoring in appropriate Key Indicators of Progress levels of increased productivity According to research completed by the National Center for Educational Management Systems Total educational expenditures per degree awarded (NCHEMS), Arizona ranks high on the metric used to evaluate productivity. In bachelor’s degrees Composite financial index (CFI) awarded per 100 FTE, and total funding per FTE, Arizona ranks above the 80th percentile. Performance Relative to Resources: Degree-to-Enrollment Ratio 30 PRODUCTIVIT Y Number of bachelor’s degrees awarded per 100 FTE students (3) Evaluating our financial strength and productivity 33 25 FL 20 WA IL CO NH 15 OR VA TX KS OH OK RI MT LA ND NV SD CT CA AZ DE MO UT IA MA GA WY MS SC NJ WI NE IN TN ID AL WV AR NM MD PA NY HI KY ME NC VT MN Ratio of performance to funding associated with states performing at or above 80th percentile Ratio of performance to funding associated with average of all states 10 Source: Patrick Kelly and Dennis jones. (2006.) A New Look at the Institutional Component of Higher Education Finance: A Guide for Evaluating Performance Relative to Financial Resources. Boulder, CO: NCHEMS. $9,000 $11,000 $13,000 $15,000 $17,000 $19,000 $21,000 $23,000 04 COSTS EDUCATION Delta Cost Project Significant research into university costs, productivity, and accountability is currently underway by the Delta Project on Postsecondary Education Costs, Productivity, and Accountability (Delta Cost Project). ABOR is following this work closely and will retain best practices, strategies and metrics that follow from this national initiative. According to Dr. Jane Wellman of the Delta Cost Project1, measuring productivity will require considering total costs and how resources are used to produce outcomes, which include PRODUCTIVIT Y 34 graduates, trained workers, and new knowledge. In addition, examining the relationships among the quality of entering students, costs, and learning outcomes will allow institutions, boards, and state policymakers to better understand the consequences of a change in any one of these variables on total productivity. Productivity Initiatives • Board initiative utilizing the best practices of national policy analyses through the Delta Cost Project • Facilitate deeper understanding of college costs, the role of tuition, state subsidies, net price, and financial aid impact • Utilize performance metrics with national comparability • Identify cost-saving, cost containment, and cost avoidance measures • Examine university cost drivers • Advance innovative qualitative changes that will lead to more effective and efficient educational programs EVALUATING Additional analyses and background measures will be employed to evaluate and track progress PROGRESS related to productivity such as: • Number of bachelor’s degrees awarded per 100 FTE students • Average number of years to graduation for students who began as freshmen 04 • Average cumulative hours at graduation for students who began as transfer students • Full educational costs per FTE student enrolled and per degree awarded • Student share of costs (discounted price, or net tuition) • Average subsidy portion of costs (average dollar amount of full educational costs covered This work will enable ABOR to make informed decisions about where resources can be deployed more effectively in order to produce more outcomes—degrees—while maintaining access for students with financial need and educational quality. Evaluating Financial Strength: Effective management of financial resources is critical to achieving the goals of this strategic plan. Four financial ratios will be calculated using data in the universities’ audited annual financial statements: • Primary Reserve Ratio • Viability Ratio • Return on Net Assets Ratio • Net Operating Revenues Ratio These four ratios will then be used to calculate a composite financial index (CFI), one overall Funding the Vision: The ability of the system to fully articulate and integrate all sources of revenue with methods and best practices for spending those resources more effectively will be crucial to achieving the plan. Strategic planning efforts in this regard include: • Comprehensive funding review — to define funding adequacy for the system in light of specific goals and targets of the 2020 Vision • Budget recommendations — to articulate more explicitly the link between resources needed to fuel the 2020 Vision and outcomes the state can expect for the funding • Long-term financial projections — to articulate funding measurement of each institution’s financial health. The CFI is useful in helping governing necessary for the next 12 years to successfully achieve boards and senior management understand the financial position that the institution enjoys the 2020 Vision including capital and operating needs in the marketplace. “Moreover, this measurement will also prove valuable in assessing future prospects of the institution, functioning as an ‘affordability index’ of a strategic plan”1 Such an index will help the system maximize its strengths while adopting strategies to mitigate any weaknesses. 1 Strategic Financial Analysis for Higher Education, 6th edition, KPMG • Tuition policy — to align the tuition setting process more closely to resource adequacy related to the 2020 Vision balanced with the policy goal to ensure affordability and predictability for students with financial need PRODUCTIVIT Y by institutional resources, endowment, or state funding) per FTE student 35 04 EXCELLENCE STRATEGIES FOR MACRO STRATEGIES FOR PRODUCTIVITY 1. Productivity initiatives a. Productivity initiatives to identify strengths and weaknesses and to develop recommendations for better utilization of resources in the future including, among others, policies that encourage students to improve predictable and efficient time-to-degree and increased university access for rural students 2. Comprehensive funding review PRODUCTIVIT Y 36 a. Complete a comprehensive funding policy review: (1) determine adequate funding levels for the system to achieve 2020 goals; and (2) examine allocation of current resources and appropriate incentives to meet priorities of the plan b. Consistent with the funding review, complete a long-term financial projection model that identifies resources needed in both operations and capital, aligned to system and state priorities in the 2020 Vision c. Incorporate the use of peer and national benchmark data to assess productivity and new initiatives in the system and at the universities 3. Track the financial strength of the universities 4. Improve tuition and financial aid policies to align with affordability needs, funding adequacy and share of responsibility for educational costs Members, Arizona Board of Regents Fred Boice President Janice K. Brewer Governor Robert B. Bulla Ernest Calderón Dennis DeConcini Fred P. DuVal LuAnn Leonard Anne L. Mariucci David Martinez III Bob McLendon Ross Meyer Tom Horne Council of Presidents Michael Crow President Arizona State University John Haeger President Northern Arizona University Robert Shelton President University of Arizona Joel Sideman Executive Director Arizona Board of Regents