Creating commerce, feeding the economy & building jobs

From her third-floor perspective, Kari Knudson, vice president of the new National Energy Center of Excellence at Bismarck State College, can almost see the future of the energy industry forming. The NECE has several expanded labs with state-of-the-art equipment.

Students get quality hands-on experience, preparing them to fill high-paying jobs with prominent energy businesses.

Partnerships between the college and those businesses have been in place for more than 30 years, but the training facilities at BSC had limited space for meeting the growing needs of the industry, Knudson said. Then the state invested $3 million in a new facility to house the college’s energy programs.

“That positions us to be the national leader in energy education,” Knudson said. “The Center of Excellence program was an integral part of building this facility and having this effect.”

NECE is one of the many successes of North Dakota’s Centers of Excellence program. With its state funding awarded in 2005, it’s also one of the first. Twenty-one projects have been approved so far, and another round is just beginning.

“The idea is to create better paying jobs and then to link our young people into those jobs,” said Gov. John Hoeven, who initiated the program.

Things have changed a bit since the first centers got their start. Shane Goettle, state commerce department commissioner said three centers were approved as individual projects before the process became competitive.

Now proposals for Centers of Excellence ideas compete against each other for grant money.

There were three rounds of applications in the 2005-2007 biennium and two during the 2007- 2009 biennium.Goettle expects there to be at least two rounds this biennium, as well.

Justin Dever, who oversees the Centers of Excellence program at the commerce department said the requirements used to be broad enough to include workforce development. The program has since been narrowed to focus more on pure research andcommercialization. Because of the narrowed focus, a separate program to provide workforce enhancement grants grew out of the Centers of Excellence program in 2007.

A more recent change for Centers of Excellence includes a state revenue trigger that will determine how much money the state can invest in centers this biennium. There will be $15-$20 million available, Goettle said.

A total of $39.4 million has been approved for the projects so far, with $25.4 million of that money already invested in projects. These are longterm investments that can take some time to get off the ground, he said.

“A big factor of ours is accountability,” Goettle said. “This is not necessarily set up to get an immediate return on investment. The role is to develop high-value jobs in North Dakota. We have some early indications that that’s happening in some of the centers that are further along.”

According to the commerce department’s 2008 Centers of Excellence Annual Report, the centers have already resulted in 493 new direct jobs and 771 indirect jobs. The $25.4 million that the state has already paid out has an estimated total economic impact of $169 million.

“We have had more money appropriated and approved into projects but you’ve got to feed it in and they have to meet all of these requirements,” Hoeven said. “It takes time to get going. We’re still on the front end of building this program and it’s something that will continue to develop and grow over time.”

As the program has developed, the proposals seem to be getting better, too. The economic plans behind them and the private partnerships both seem to be more solid.

“We hope that the program at the very least acts as a catalyst for partnerships,” Goettle said.

The partnerships are vital both for building a culture where new ideas can fl

ourish and for direct funding purposes. “We require a two-to-one match so that at least two dollars of private sector funding and funding from other sources match our state dollars and are invested in these projects,” Hoeven said. “It creates real leverage in terms of our investment as a state, but look at all the other leverages and synergies you create.”

Both Hoeven and Goettle said the centers build on North Dakota’s strengths through things like aviation and unmanned aircraft in Grand Forks, entrepreneurism in Dickinson, oilseed development, electronics and manufacturing in Fargo, and oil and gas training in Williston.

And of course, there’s the NECE in Bismarck. The $3 million in state money was leveraged with private partner donations and other funding, topping out at around $18 million. Knudson said while the interior of the fourth floor of the building isn’t yet complete, BSC was able to move into the new facility about a year ago.

It’s good timing because the energy industry continues to grow. There are students from all 50 states now as well as some new military partnerships, and the energy programs have experienced a 20-25 percent growth over the past four years, Knudson said.

If all the Centers of Excellence do that well, North Dakota has a bright future.

-Story by Gwen Bristol, Photo by Will Kincaid/Tribune