In case you missed it, Grand Forks Herald applauds Centers of Exellence

OUR OPINION : Centers of success
Published Sunday, November 04, 2007

Are they Centers of Excellence or centers of extravagance?
Some lawmakers seemed on the verge of asking that question when the most recent grant requests came up for review.
The legislators were smart to be skeptical. Notably, though, the centers passed the Legislature's test. They should pass North Dakotans' test, too: The centers use a proven method of economic development that has worked in other states and shows every sign of working here.
Earlier this week, state lawmakers approved $10 million in grants to four North Dakota colleges, The Associated Press reported. The money is going to six "Centers of Excellence" projects, including $4 million in two grants for UND. The first UND grant will help study and launch a medical device that could help stroke victims by dissolving blood clots. The second will research an aerial drone.
So, why give taxpayers' money to such projects in the first place?
The answer is this: As experience in other states showed, smart spending by careful governments can leverage private dollars and create good jobs. North Dakota leaders saw that happen elsewhere and decided to try it here.
These "public-private partnerships" have their roots in North Carolina. In 1959, a committee of business, government and academic leaders targeted some acreage near Raleigh and Durham, N.C., for focused development. The result was Research Triangle Park, a project meant "to attract research companies from around the nation to locate in a parcel of land surrounded by the state's research universities," the park's Web site, www.rtp.org, reports.
In 1959, North Carolina was a low-status and low-wage backwater, the Web site notes. Today, "more than 39,000 full-time equivalent employees work in RTP with an estimated 10,000 contract workers. These employees have combined annual salaries of over $2.7 billion. The average salary in the park is $56,000 annually, nearly 45 percent larger than the regional and national average."
Many states followed North Carolina's example. Utah's experience, from North Dakota's perspective, was especially important: In 1986, the Utah Legislature set up a Centers of Excellence Program "for the express purpose of supporting university-based, industry-supported cooperative research and development," the Utah Business and Economic Review recalled in 2006. The project's goal was to "develop technologies with commercial potential" by creating new companies and helping existing firms.
The study in the economic review was titled, "Utah's Centers of Excellence Program: A 20-Year Review." Its conclusion: "(I)t is evident the program has been successful in generating new companies. At least 65 ongoing businesses in Utah trace their roots directly to technologies funded through COE. These companies employ between 1,500 and 1,800 people thereby contributing to the state's economic base."
Furthermore, the "cost per job" of those 1,500 to 1,800 positions comes in at about $27,500, the study reports. "This estimate compares favorably to the $35,000 per . . job limits imposed by the Department of Housing and Urban Development and the $50,000 limit per new job imposed by the Small Business Administration."
North Dakota modeled its own Centers of Excellence program on Utah's.
Purists object that all companies ought to just rise or fall on their own. But most North Dakotans, like most Americans, long ago recognized that some government programs help rather than hurt.
State-supported universities are a classic example. Every UND student enjoys a "mini-G.I. Bill" of sorts, in that North Dakota pays a share of UND's per-student costs. The story is the same in every other state.
And the results of these and other controlled interventions are clear. "The U.S. has regained its status as the world's most competitive economy thanks to strong innovation and excellent universities, according to a survey released Wednesday by the World Economic Forum," The Associated Press reported this week.
Some government programs don't work. But some do; and by using safeguards such as legislative review, requiring a $2 match in private funding for every $1 in state aid, tracking the number of jobs created and so on, Centers of Excellence seem on their way to becoming a policy success.
Tom Dennis for the Herald