Panel: Bay State Needs R&D Investment To Survive
Investment in higher education as well as in research and development is key to making sure Massachusetts emerges from the current recession in a strong position for growth, according to panelists at an economic outlook panel discussion held this morning at the Crowne Plaza in Worcester.
And in fact, the University of Massachusetts Medical School in Worcester stands to benefit to the tune of $70 million in research funding from the federal economic stimulus package expected to be signed into law today.
The panel, put together by the Worcester Regional Chamber of Commerce and sponsored by Sovereign Bank, was comprised of: Jeffrey Fuhrer, executive vice president and director of research at the Federal Reserve Bank of Boston; Andre Mayer, senior vice president of communications and research for the Associated Industries of Massachusetts; Dr. Michael Collins, chancellor of the University of Massachusetts Medical School in Worcester; and John Merrill, market president for Sovereign Bank. The Worcester Business Journal was a media sponsor for the event.
Powerful Package
Collins said the stimulus package includes $15 billion for scientific research, $10 billion of which will go to NIH grants for the next two years. Massachusetts typically receives 10 percent of all NIH funding, according to Collins, so the Bay State stands to receive a $1.5 billion infusion of research dollars, while the medical school could see as much as $70 million.
"We put out the word to our scientists that their pencils needed to be working on grant proposals as of about two weeks ago," he said.
AIM's Mayer likened the current economic recession to the one the United States survived in the 1970s. And he said what helped Massachusetts come out of that dark economic time was that the commonwealth "put a lot of effort into education and particularly higher education."
Fuhrer agreed with Mayer and expanded upon it, stating that "research funding is critical" for the United States to come out of the recession in a place where it can continue to be a world leader in innovation.
Collins also made the case for more funding within the UMass system, which is facing significant cuts due to the state's budget deficit. He said that out of the $2.5 billion UMass budget for the current fiscal year, the state contributed $450 million. Next year, that number is likely to be only $400 million. For the UMass Medical School, the state has proposed cutting its funding by nearly $10 million next year.
"We used to be state-funded, then we were state-assisted and now we're state-located," Collins said, eliciting laughter from the audience of nearly 300.
He drew a comparison to the Bay State's neighbor to the south, Connecticut, which has invested nearly $3 billion in capital improvements for its state university system over the last decade. By contrast, the Bay State only invested $20 million for capital improvements in the UMass campuses last year.
Signs Of Life
Asked for signs when we might be coming out of the current recession, Fuhrer said to keep an eye out for price stabilization in the housing market as well as a consistent uptick in home sales volume. And although much of the current data on the national economy is grim, Fuhrer also provided some optimism.
"I am completely optimistic in the long-run economy," he said. "The question is only when that long-run starts."
Merrill presented results from the Sovereign Bank consumer and business leader survey, conducted at the end of the 2008. Click below for a sampling of results:
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