Business needs U — and vice versa

President Eric Kaler hasn’t been shy about asking the Minnesota business community for help. In fact, he’s made it a priority.

He spoke to the Minneapolis Regional Chamber of Commerce in late September, emphasizing the importance of the University of Minnesota in both educating Minnesota’s workforce and providing the nuts-and-bolts research to fuel area businesses.

“You will also hear me talk about the need for engagement with some of our friends. Our need for philanthropy, private giving and for partnership with business to leverage our resources is extremely high,” Kaler told them.

His appeal to the business community for donations and other contributions comes as University funding from the state has dwindled. About 15 percent of the University’s revenue in 2011-12 will come from the Legislature, according to an August estimate.

In 2007, the business community kicked in about $38 million for University research — just shy of what the state contributed that year, according to reports from the Office of the Vice President for Research. In 2010, that amount fell to $35 million.

“As you’d expect, it went down during the economic recession. We’re hoping we’re on an uphill trend again,” OVPR spokesman John Merritt said.

On top of financial support, Kaler has made clear the role industry can play in convincing Minnesotans and the state Legislature of the University’s worth.

Sen. Claire Robling, R-Jordan, chairwoman of the Senate Finance Committee, said the industry’s presence on the University’s behalf has been limited in the Legislature so far.

“I don’t know that businesses have been big lobbyists for the University,” she said. “I’m not saying they’re not supportive, but they haven’t been knocking on our doors specifically for the U.”

In 2004, former University President Bob Bruininks became the first public sector member of the Minnesota Business Partnership. A personal connection between the CEOs of Minnesota big businesses and the University’s president has helped connect the two entities, Weaver said.

 Like his predecessor, Kaler will serve on the MBP.

“From the pacemaker to the black box, from open heart surgery to Honeycrisp apples, the University’s history is rich and profound,” Kaler said. “If we don’t invest … we absolutely will not discover new things. Instead, we will wither as a University and we will decline as a state,” Kaler said in his inaugural address last month.

Charlie Weaver, MBP’s executive director, said his organization lobbied during the last legislative session for the new physics and nanotechnology building — a project that received funding from the bonding bill passed during the special session. He said MBP has been supportive of the University on a case-by-case basis.

“If we’re going to keep the large companies in Minnesota … we have to have a University that provides top-notch talent,” he said.

An engine for business

Minnesota has 20 Fortune 500 companies — more per capita than any other state, according to the Minnesota Department of Employment and Economic Development. And its industry is diverse — home to medical companies like Medtronic; agriculture and food producers like Hormel, Cargill and General Mills; retailers like Target and technology companies like 3M.

According to a study conducted by consulting firm Tripp Umbach in March, every dollar invested in the University of Minnesota generates $13.20 for the state’s economy. All told, that adds up to an $8.6 billion economic impact. The study was financed by the University of Minnesota Foundation.

Robling was skeptical of the study. She said other forces at work may have inflated the numbers.

 “Our region is consistently rated as having one of the best-educated and most dedicated workforces in the country, and that doesn’t happen without a strong and effective higher education system,” General Mills chairman and CEO Ken Powell said in an email. Powell is up for approval to join the University’s Board of Trustees on Friday.

According to alumni surveys, University graduates have started nearly 10,000 companies in Minnesota.

The University asked the business community what they wanted from the University in two surveys conducted in 2005 and 2008.

“It’s talent, training and technology,” OVPR spokesman John Merritt said of the results.

Small business

Marc von Keitz said his company might not exist if it weren’t for the University.

He is the president and co-founder of BioCee, a nine-employee industrial biotechnology start-up that contracts for lab space in Snyder Hall. Many of its employees either graduated from the University or worked there, von Keitz said.

“I think [the University] was really fundamental in the sense that the company would not exist without the technology that was developed at the University,” von Keitz said. “It was a critical starting point.”

Having access to the University’s lab resources, support and staff has been critical in his company’s success, von Keitz said.

He said the advantage goes both ways.

“Having some success stories of this being done is also a recruitment tool to get the best faculty as well as really good students and post-docs,” he said.

Balancing act

Some business contributions to the University are highly visible: Target Atrium; the Target Studio for Creative Collaboration; TCF Bank Stadium; the Hormel Institute are all sponsored parts of the University. But the University can’t afford to have corporations stamped all over its research: there are strict guidelines designed to maintain academic freedom.

Those guidelines are designed to prevent businesses and faculty from taking advantage of partnerships, but they don’t always work. In the wake of high-profile conflicts of interest, the University Senate revamped its conflict of interest policy in April and created a standalone policy for clinical health care employees.

“We will not partner with a company if that partnership hampers our ability to publish our research results freely and to take that intellectual inquiry wherever it goes,” Kaler said in a September interview. “There’s a very clear set of guidelines we have in engaging foundations and corporations in funding things that we want to do.”

Merritt said the key is managing relationships and making sure both sides understand the rules.

Even with the decline in state support, Robling doesn’t think Minnesotans have major cause for conflict of interest concerns.

“There’s a lot of private institutions that have to depend a lot on contributions, and I don’t think there’s been a problem there,” she said, approving of Kaler’s call to strengthen the University’s relationship with area businesses.

“I’d love to see it expanded,” she said.