Private Sector Partnerships Emphasized in North Dakota's Centers of Excellence Successor Program

A new program that builds upon the successes of North Dakota's Centers of Excellence and Research Excellence programs will fund up to half of the cost of R&D and commercialization projects conducted by the state's research universities. Under Research North Dakota (RND), the development and commercialization of new products will be achieved on a project-by-project basis and state funds will be matched with private-sector cash investment.

Just two years ago, the eight-year old Centers of Excellence program was restructured as the Centers of Research Excellence to place a greater focus on R&D and commercialization activities. In their initial 2005 incarnation, the Centers of Excellence were more broadly focused in areas spanning energy and advanced manufacturing to workforce development and tourism (see the May 2, 2005 issue of the Digest). As part of a statewide effort to identify opportunities for growth in the coming years, a task force unveiled in November a recommendation to establish the Research North Dakota program as the successor to the centers program in its report North Dakota 2020 & Beyond.

Under the RND program, no new centers will be created. RND grants will be used to fund the research university's work in assisting private companies with R&D and commercialization projects. Through this new model, the development and commercialization of new products will be achieved on a project-by-project basis, with the assistance of state research and expertise. Lawmakers included $12 million in the recently enacted 2013-15 biennial budget, the same amount approved for the centers program last biennium. Unlike its predecessor, the state funds will be matched with private-sector cash investment, where prior matches could also include in-kind match.

The Department of Commerce will establish and administer the RND grant program with input from the Centers of Excellence Commission on grant award determinations. Commerce may use up to $6 million for RND grants, $4 million for RND grants focused on biotechnology, and $2 million for venture grants focused on commercializing university technologies. This is a new component of the program modeled after the Georgia Research Alliance VentureLab program.

The centers program has reported an economic impact of $634.6 million since its creation in 2005. Additionally, the program has produced $14 in economic impact for every $1 invested, according to an annual report.

The Department of Commerce budget also includes $2 million for Innovate North Dakota and $1.5 million to expand the Operation Intern program, which provides internships, cooperative work experiences and apprenticeship positions with employers. Innovate ND is a public-private program that began in 2006 and helps entrepreneurs create new businesses through an education-based competition. Commerce recently set up a review process to help improve the program and has since put the competition aspect on hold for a year to study whether it could be more effective, reports The Bismarck Tribune. An entrepreneurship program manager also was hired and charged with helping educate the public about entrepreneurial programs offered in the state. Since its inception, the program has resulted in 135 operating businesses.

The North Dakota Department of Commerce budget bill is SB 2018.