REGIONAL— When the state Legislature created the Natural Resources Research Institute in Duluth way back in 1983, legislators hoped that a scientific approach to resource development and improved technical know-how could jump start job creation in northeastern Minnesota.

So how has the organization met that goal? Extraordinarily well, according to a new study by the Bureau of Business and Economic Research at the University of Minnesota-Duluth. The findings of the report highlight the effective return on investment for the state’s annual allotment of $2.4 million toward the operations of the research facility.

In the Arrowhead region alone, the study estimates that more than 200 new jobs can be attributed to spending and operations by the NRRI and that it contributed roughly $18.2 million in wages and benefits during fiscal year 2016. In total, the institute itself is estimated to have increased local output by approximately $28 million throughout the region. The NRRI’s impact is even greater on a statewide basis, where the report credits the institute with producing more than 250 jobs statewide in 2016.

Many of those jobs are generated by NRRI itself, which has seen significant growth in its overall employment since its founding 33 years ago. Most of the wages and benefits paid to NRRI staff come from the nearly ten million dollars in annual grants, contracts, and other funding streams generated by the researchers employed there.

The study provides a valuable assessment as the NRRI advances a request for its first funding increase since its founding more than thirty years ago. The funding increase, which will be part of the University of Minnesota’s total annual request, calls for an additional $1 million in the first year, and an additional $2 million in the second year. NRRI commissioned the study as a matter of accountability, said Director Rolf Weberg. “We are funded by the state and the taxpayers and that’s a sacred trust,” said Weberg in an interview with the Timberjay. “If I’m going to engage the Legislature, I have to say here’s the return you get today. And that we can do better going forward.”

Weberg said the additional funds are critical to allow NRRI to continue to operate a top-tier research facility, and to help extend the impact of available grant funding. “A lot of people here generate 90-95 percent of their program with soft [outside] money,” said Weberg and that can make ongoing work vulnerable to changes in grant availability and forces staff to cover much of their overhead with critical grant dollars. “Only about 10 percent of salaries here are hard-funded,” said Weberg, which is less than most other similar research facilities. “Our goal is to be 50-percent hard-funded,” he said, acknowledging that their planned funding request won’t get them all the way there. “That will probably get us in the 40 percent range,” he said. “It’s not enough, but it’s getting us closer to where we need to be.”

Business

development work

While some NRRI staff engage in general research, much of the work there is geared towards commercial applications and technical assistance for businesses. The NRRI is constantly working to make contacts with area businesses to let them know how they can assist them— and those connections can be a major boost to businesses.

Ryan Holman, of Ryan’s Rustic Railings in Gheen, said he’s turned to NRRI on several occasions for technical assistance in his small manufacturing business.

When he needed a machine to remove bark and shape logs, NRRI connected him with the German company that made what he was looking for. When he needed a special type of drill press operation, they helped him design it. When he needed help fine-tuning his assembly process, they were there once again. “They’ve been very good to work with,” said Holman. “And the research they do is free,” he said.

Weberg said the NRRI works in any number of ways with Minnesota businesses to help them achieve their goals. “We have a lot of relationships with industries, and businesses often will come in and ask for specific help, research or quality control updates,” he said.

At other times, the NRRI will work closely with companies to develop new technologies and processes that are patentable. “We have developed quite a few patents,” said Weberg. Those include patents on processes to extract useful chemicals from birch bark, and also to use taconite for road repairs, among others. When NRRI develops a unique technology, it can patent and license it to businesses, generating some payback on the licensing fees.

While the organization provides some services to businesses for free, in many cases, businesses hire them for specific purposes, typically on a fee-for-service basis. But the arrangements can run the gamut, said Weberg. Sometimes, the NRRI and businesses enter into development agreements, particularly when advancing new technologies.

Besides crunching the economic impact numbers, the BBER study also surveyed more than 200 of the businesses that NRRI has served, and received overwhelmingly positive feedback. Businesses reported saving an average of $60,000-$100,000 as a result of NRRI’s assistance— savings which helped create or retain an average of seven to 12 jobs.

While the NRRI’s focus is most often on helping the private sector, it also provides research and technical help to federal, state, and local agencies— and saves them money in the process. According to the BBER report, agencies that tapped NRRI’s expertise reported saving between $40,000-$50,000 and saved an average of six months in developing projects. Altogether, the report found that NRRI saved these agencies as much as $1.5 million in 2016.

Weberg said he’d like to see a similar assessment of the NRRI’s work conducted on an annual basis, both for accountability and as a tool to help improve the services the organization provides. “The citizens want to know how we’re doing. And it provided us with some very good feedback,” he said.