The Chancellor of the North Dakota University System is proposing that a portion of the proceeds of the state’s Legacy Fund be used to create a “Higher Education Innovation Fund.”
Mark Hagerott said the economy is changing, and North Dakota’s colleges need to change with it.
"When I was a kid, data showed 80 percent of the value of a company was in the physical plant -- the buildings, the concrete, the machines sitting on the shop floor -- and 20 percent was in workers, patents and intellectual property," Hagerott said. "Now, studies show that's reversed -- 80 percent of the value is in the workers."
Hagerott said North Dakota currently ranks 49th out of 50 states in terms of “startups.” He said even though North Dakota has a great amount of wealth from energy, the state needs to prepare for the future.
"Ninety-six percent of the jobs created after the last recession required some post high school credentials or education," Hagerott said. "So it has been very wise for voters to support higher education. And with the Legacy fund, this is a way to diversify the economy, help solve workforce, and just prepare the younger generation and adult workers for the new economy and society that's emerging."
Hagerott is also proposing a “Higher Education Stabilization Fund,” similar to the K-12 Stabilization fund, with money coming from Legacy Fund proceeds. The fund would help during budget downturns. And it would be funded through the proceeds from the Legacy Fund.
Hagerott said during the budget cuts the Legislature enacted in 2017, the University System lost a lot of good faculty. And he said this proposal is meant to smooth over the bumps.
"Our professors are very mobile, and students are very mobile," Hagerott said. "If we can't stabilize higher ed, it's classic -- they get poached."
Hagerott said at a recent conference he attended, the research vice-president of a big university on the coast joked about how the Midwest and the Dakotas are seen as a "candy jar, to pick the best professors."
Hageerott has presented this idea to an interim Legislative committee, studying uses for the Fund's proceeds.