NDSU Study: Centers Of Excellence Program Creates $329.4 Million In Economic Impact

Press Release

North Dakota State University Professor Larry Leistritz today presented the results of a new study showing that the North Dakota Centers of Excellence program has leveraged $19.9 million in funding into an economic impact of $329.4 million through June 30, 2009.

With only one third of the total available program dollars invested as of June 30, 2009, the Centers of Excellence program had the following economic benefits:

Economic Impact: $329.4 million

The Centers of Excellence program has had $329.4 in estimated total economic impact to North Dakota's economy. This includes a direct impact of $115.5 million generated by the Centers and their partners.

Job Creation: 2060 jobs

The Centers of Excellence program has lead to the creation of 2,060 total jobs. This includes 922 jobs at an estimated annual payroll of $44.5 million created by the Centers themselves or by partnering companies. In addition, the efforts of the Centers and their partners have supported the creation of another 1,138 jobs within the state of North Dakota.

Private Sector Partners: 132 Companies

The Centers have formed partnerships with 132 companies. These include companies in target industries such as advanced manufacturing, energy, technology, and value-added agriculture, as well as emerging industries such as life sciences and unmanned aircraft systems.

New Businesses: 17 New or Expanded Businesses

Seventeen new or expanded businesses have resulted from the Centers of Excellence program. This includes seven new spinoff companies, five companies that expanded to North Dakota, and five companies that have expanded within the state.

Funding: $19.9 million Invested

Only one third of the investment allocated to Centers of Excellence was invested as of June 30, 2009. Due to careful due diligence and project requirements on the part of the program and the university system, projects are funded and dollars spent only when the required match is available and the project is ready to move forward.

BREAK IN TRANSCRIPT

"The Centers of Excellence program is North Dakota's major initiative to participate in technology and information-based economic development," wrote Leistritz and his coauthors. "Although many Centers are in early stages of development, the economic effects of the program to date are encouraging. With a direct economic impact of $115.5 million and total impact of $329.5 million for the period January 1, 2007 -- June 30, 2009, the program's contribution to the North Dakota economy is already considerable. Further, the jobs resulting from Center activities are relatively high-paying."

Also on hand to discuss the study were Gov. John Hoeven, Sen. Tony Grindberg, Commerce Commissioner Shane Goettle, Centers of Excellence Commission Chair Mark Nisbet and Jeff Johnson, V.P. of Business Development for Appareo Systems, one of the private sector companies participating in the Centers of Excellence program.

"With just a third of the program's funding distributed, our Centers of Excellence are already having a significant economic impact on our state," Hoeven said. "At this rate of development, we shouldn't be surprised to see a $1 billion impact when all of the projects are funded and mature."

"Projects are funded and dollars spent only when the required match is available and the project is ready to move forward," Goettle said. "So this economic impact is really outstanding."

In the report, Leistritz said another measure of the program's success is Centers' ability to obtain matching and leveraged funds. "To date, the Centers have obtained $134.8 million of matching and leveraged funds, an amount far exceeding the $31.4 million of state funds dispersed to the Centers," Leistritz said.

"I am excited to see that the Centers of Excellence are becoming the economic engine that the North Dakota Economic Development Foundation believed they could be," said Nesbit. "I am especially pleased that 132 businesses have partnered with our University system in the effort to commercialize research and provide quality jobs throughout the state of North Dakota."

"The Governor's Centers of Excellence initiative is a good example of a great idea that is working at the local level and that is making a difference for our students, our businesses, and our community," said Johnson of Appareo.

Goettle also reported that Commerce has implemented all audit recommendations included in a performance audit of the Centers of Excellence program released last September.

"We have implemented or begun to implement all of the recommendations made by the auditor's office," Goettle said. "We are in communication with the auditor's office and attempting to get their input on the steps we are taking to ensure we are on track."

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