“The forces that are driving the nation’s top technology talent to just a handful of cities have intensified in recent years, leaving much of the nation behind as the U.S. becomes a digital economy . . . “
– The Wall Street Journal, December 2019
To understand the urgency behind the Arizona Board of Regents proposal for public investment in the new economy, one need look no further than this recent story in The Wall Street Journal.
According to The Journal, research by the Brookings Institution and Information Technology and Innovation Foundation shows that just five metropolitan cities – Boston, San Diego, San Francisco, Seattle and San Jose – accounted for more than 90% of all U.S. high tech job growth from 2005 to 2017. The story goes on to say that research shows that tech industries find they are most productive when they have resources clustered, allowing for the rapid spread of new ideas and a concentrated talent pool.
Arizona State University has been pursuing strategies relative to the opportunities associated with this trend for some time, making investments and creating partnerships with co-investors to build the Fulton Schools of Engineering. These partnerships capitalize on opportunities that leverage Fulton’s unique assets for future technology breakthroughs and have yielded significant progress in diverse areas that include additive manufacturing, solar energy, wearable technologies and blockchain, among others.
The special investment from the state requested by the Board of Regents – $46 million in the state’s FY 2021 budget – builds on what ASU is already doing and means Arizona can create a top-tier, concentrated environment of technology and talent right here in greater Phoenix that will give the state a key strategic economic development asset for the future.
At Arizona State University, our charter calls on us not only to be inclusive, accessible and top quality, it calls on us to advance research and discovery that is of public value. The ASU charter directs us to assume fundamental responsibility for the economic, social and cultural health of the communities we serve.
The mission of ASU’s charter aligns with the assignment given to us in the Board of Regents proposal. Our job is to produce more engineers. Our job is to partner with industry. Our job is to put faculty to work in a comprehensive public research environment. If we do that job right, at the scale proposed by ABOR, then the return on investment will be substantial.
To be clear, the investment request focuses on three primary areas of ASU’s engineering program – the first two involving investments that will add faculty to the Fulton Schools of Engineering both for students on-campus and for learners in industry off-campus that need re-skilling and up-skilling; and, for experiential learning programs, student support services that shorten the time it takes to earn a degree, content development for certificates, micro-degrees and other credentials that provide a flexible way to keep skills sharpened and to update areas that are experiencing unprecedented change.
The third area of investment is to create more science and technology centers – precisely the kind of centralized, concentrated environments that have fueled the economies in the cities that have grown the most in tech industry jobs. These centers will be focused on specific areas that will foster the growth of new economy industries in energy, human performance, extreme environments, advanced manufacturing, and future communications technologies.
Science and technology centers are physical locations that foster the growth of industries directly leading to job creation, workforce training, startups, and advancing STEM education. Faculty, students and research partners discover, translate ideas from the lab to market, and industry pulls their work forward into the marketplace. Their work unlocks key research challenges, trains current students on future technologies, enables reskilling of existing workforce and catalyzes the region’s startup ecosystem, creating successful spinoffs such as Zero Mass Water, Fluidic Energy and many others.
So, what do we get for this investment? To better analyze this, the Board of Regents turned to independent economic and policy analysts, Rounds Consulting Group, a firm well known to public and private institutions throughout the state of Arizona. Rounds was asked to analyze the economic and fiscal impact of the $46 million workforce development investment proposal for ASU.
The key finding from the firm is that the proposed public investment “is estimated to achieve a breakeven for the state by year 10. In each year thereafter, the positive ROI further advances. The benefits are sizeable because the budget request/investment proposal is specific to a key area and builds on the local economy’s strengths.”
|Annual Figures: Economic & Fiscal Impacts – ASU Engineering Proposal|
|Total Jobs||Total Wages ($ Millions)||Total Output ($ Millions)||Total Taxes
|Total – 20 Years||$47,504.4||$2,242.2|
Make no mistake about it. The race to win in the new economy is competitive and it has already begun. Arizona is poised to be a winner in this race if we take advantage of what we have and invest wisely. What ABOR has proposed is to use this investment to put ASU to work for Arizona and win the race.
This is the final of a three-part series from ASU President Michael M. Crow about the Arizona Board of Regents New Economy Initiative, a public investment proposal for the state’s FY 2021 budget.