Don't cut programs that feed economy, like R&D

As the Legislature wrestles with balancing the state's biennial budget, there are calls for more spending cuts by the University of Wisconsin System.

In some ways, that's logical: The UW System budget is one of the state's five biggest spending programs. But there would be little logic in cutting UW System programs that contribute to the state's economic growth.

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As a 2004 report by the Wisconsin Technology Council illustrated, the state's investment in academic research and development on UW System campuses pays for itself many times over in terms of economic growth and jobs.

Academic research institutions in Wisconsin spent about $883 million on direct research activities in the fiscal year ending in mid-2002, according to figures reported last fall, with more than $700 million of that total taking place on UW campuses.

UW-Madison was the runaway leader with more than $660 million in research spending, but other UW campuses, notably UW-Milwaukee, are aggressively expanding their R&D programs. UW-Milwaukee could hit $100 million in research within five years, and UW-Green Bay, UW-Stout, UW-Platteville and UW-La Crosse are among other campuses with growing R&D efforts.

That's important to the state's economy because academic R&D creates jobs, directly and indirectly. Using an economic multiplier long-established by the U.S. Department of Commerce, the $883 million in academic R&D spending in Wisconsin created 31,788 jobs � or 36 direct and indirect jobs for every $1 million spent.

If the jobs spawned by academic research spending in Wisconsin were reported as a separate category within the labor market statistics of the state Department of Workforce Development, it would represent a significant sector in its own right. For example, paper manufacturing employs 39,100 people in Wisconsin; printing, 34,700; plastics and rubber products, 34,600; and construction of buildings, 31,600.

State government's investment in academic R&D attracts federal money � an area where Wisconsin rarely shines. Wisconsin ranks 15th among the 50 states in total academic R&D spending, and its per-capita spending ($148.14 in fiscal 2002) was well above the U.S. average of $126.17. About three-fourths of all academic R&D is paid for by federal programs such as the National Institutes of Health, the National Science Foundation and other research-oriented agencies. But the feds rarely fund research projects unless there is sufficient state and university support.

Without a vibrant foundation in academic research and development, Wisconsin would find it difficult, if not impossible, to grow a high-tech, "knowledge-based" economy. Thanks to decades of investment in people and facilities, Wisconsin has a strong base in academic R&D today; however, continued erosion of the UW System budget could undermine the state's advantage.

In the past 25 years, there has been a trend toward weaker public support for higher education in Wisconsin. The state's higher education "effort," as measured by per-capita public spending, has declined faster than the U.S. average and more sharply than in all but one of the eight Big Ten Conference states.

Wisconsin has reduced its higher-education effort by 47.8 percent since 1978. That is 40th among the 50 states � with 50th representing the weakest effort. This decline in public support is chipping away at an infrastructure that supports academic research in Wisconsin.

The 2003-2005 state budget reduced UW System spending in real dollars, and Gov. Jim Doyle's proposal for 2005-2007 is hardly extravagant. The Legislature is right to look for ways to balance the books, but it should be careful not to damage those programs, such as academic R&D, that more than pay for themselves.