Town Hall Los Angeles

October 21, 2015

President Janet Napolitano gave the keynote address at Town Hall Los Angeles, October 21, 2015. Here are her remarks as prepared for delivery:

California’s unique institution: Where the University of California is headed, and why it matters for our state, nation and world

Thank you, David, and thank you all for that warm welcome.

It is a privilege and a pleasure to speak at Town Hall Los Angeles. From Madeleine Albright to Magic Johnson, and from Jimmy Carter to John F. Kennedy, the list of prior speakers is long and distinguished. I am honored to join you here today.

Last month, I marked my two year anniversary as President of the University of California. Time does fly when you’re having fun, and those two years have felt more like two weeks—or even two days.

I have spent time on each campus of this 1,000 mile university, as it has been called, as well as its three national laboratories and many of its off-campus research centers. And I have met many of the incredible people who belong to the University of California community.

A big focus of my efforts in the last year, in particular, was reaching an agreement with our state leadership about the University’s budget.

I am pleased that we did reach a solid, multi-year agreement. And I am grateful to Governor Brown, and to the leaders of the California State Legislature, for their partnership in doing so. We now have a framework for fiscal stability for UC, as well as for enrollment growth, and for the innovation of the University’s academic programs.

But that framework is just the beginning of what I hope will become a bigger and broader effort in California. This agreement, in my view, lays the foundation for a broad public dialogue about the future of the University of California. And it is this public dialogue that I want to address with you today.

As I see it, all Californians have a voice—and a stake—in the public dialogue about UC. And it seems to me that the focus of that dialogue ought to be on what we can do, together, to ensure that the University of California is an even greater public research university in the future than it was in the past.

You see, what makes the University of California “unique” is that it both undertakes research of internationally renowned caliber, and it educates vast numbers of students.

This combination makes UC a unique institution not only in California, but also in the nation and the world. It’s the reason why so many young people across the globe aspire to become UC students. UCLA alone attracts more applicants than any other university campus in the United States. Last fall, more than 110,000 students sent their freshmen and transfer applications to Westwood in the hopes of becoming future Bruins.

Of course, the impact of the University of California reaches far beyond the borders of west Los Angeles.

Consider the University’s research mission—specifically, the research that is combating and solving big global challenges confronting California and the world at large.

UC research, for example, is tackling head on the effects of climate change in our state.

The University has long worked to preserve California’s beautiful and diverse open spaces. UC’s natural reserve lands—which comprise the largest system of its kind in the country—are rich ground for the education and research that enables us to understand our state’s physical environment, and acute issues like the drought.

Right now, a consortium of UC’s nine undergraduate campuses is conducting research in these natural reserve lands so we can better assess how climate change will affect California’s ecosystems. This past December, my office gave one of the first UC President’s Research Catalyst Awards to this consortium so researchers from across the University could undertake this critical work together.

We are also applying UC research to the University itself, as we work to achieve complete carbon neutrality in UC operations by the year 2025. This goal is monumental and urgent. UC’s footprint in the state of California is enormous. We are making—and will continue to make—a real difference in this state in energy usage, best practice, and sustainability solutions.

At the same time, as UC becomes a model for other institutions, and helps the state of California achieve its own climate change goals, we will share our research, our discoveries, and our solutions with the world.

Next week in San Diego, Governor Brown and I will participate in a UC-hosted Carbon Neutrality Summit. This Summit possesses very ambitious goals. For starters, it will marshal the vast intellectual resources of the University of California to identify 10 scalable technologies to combat climate change globally.

These solutions will not only support the Governor’s efforts to lower greenhouse gas emissions in California. They will also ignite powerful and much-needed strategy, dialogue, and action on carbon neutrality and climate change mitigation around the world. Right here in Los Angeles, for example, air quality has dramatically improved in recent decades—to the point that Chinese leaders now visit UC to learn how this was achieved, so that they, too, can clean the air above their own cities.

Put simply, we at UC are working across our ten campuses, research centers, and national laboratories to create the practical, scalable solutions our planet needs. We are also working in partnership with the state to create an inspiring, yet pragmatic, path forward—one that counters the doom and gloom, the despair, the naysaying, and the equivocating that too often inhibit the action needed to combat climate change from taking place.

Then there is UC’s research in the health sciences. On this front, UC researchers are actively developing new ways to solve long-standing medical challenges that affect many Californians.

Earlier this year, the University partnered with the state to launch the California Initiative to Advance Precision Medicine. This important public-private initiative aims to help scientists better understand diseases, and develop more precise patient therapies, through the integration of clinical, genomic, environmental, and socioeconomic data.

Two research projects at UC were just funded by this initiative. One is based at UC Santa Cruz, and the other is based at UC San Francisco. The first establishes a networking system to match cancer therapies with children whose cancer is not cured by standard treatment. And the second uses genetic sequencing to diagnose patients who are hospitalized with acute, potentially life-threatening infections diseases through a single test.

And then there is the applied side of the UC research enterprise. Through these research efforts, we are continuing to find ways to expand how UC generates economic activity in the state of California—and beyond.

Two years ago, we at UC launched the Innovation and Entrepreneurship Initiative. Under the auspices of this initiative, UC is now home to 27 incubators and accelerators. Last year alone, UC research led to more than 85 start-ups, and nearly 1800 new inventions. That’s almost five new inventions a day. Companies founded to commercialize UC technologies generated 14 billion dollars in revenue.

Those numbers represent significant steps forward for UC’s applied research efforts. But we are determined to do even more.

This fall, we are unleashing the firepower of the Innovation and Entrepreneurship Initiative. We are boosting and leveraging the basic and applied research efforts at the University. We are doing so not only to create a vigorous entrepreneurial and innovative culture, but also to solve the major challenges, and answer the major questions, our society faces.

To maximize these efforts, we have implemented three guiding priorities.

The first priority is to foster a competitive research environment that stimulates and rewards new ways of thinking among our researchers and students.

This includes enhancing programs like the President’s Research Catalyst Awards, such as the award to UC campuses undertaking climate change research in our natural reserve lands. It includes the research projects funded by the Precision Medicine initiative. And it includes new awards programs, like PrimeUC. This is a competition we launched this fall for UC-affiliated start-ups with early-stage innovations in the health sciences. In December, we will award 300,000 dollars to the winners.

The second priority is to invest in our own good ideas. A significant new program called UC Ventures is one example of this investment. UC Ventures is an independent fund that will incentivize investment in UC research-fueled enterprises. This will occur through both direct involvement at our local campuses—our Chief Investment Officer has allocated 25 million dollars for these campus commitments—and through partnering with other venture capital entities to provide seed money, locate angel investors, and the like. The University’s Chief Investment Officer has committed up to 250 million dollars to these efforts in total.

The third priority is to structure the University so that it can actively support innovation and entrepreneurship. This means eliminating obstacles, and streamlining the various processes that researchers must wrangle as they take their products from initial ideas to intellectual property licensing.

To that end, we have launched programs like UC Quickstart. This program issues what might be called “start-ups-in-a-box.” These include all the pre-vetted forms a researcher needs to move forward with a potential start-up.

Now, it’s important that the right leadership is in place for these efforts. And so we have established an Office of Research Innovation and Entrepreneurship at the UC Office of the President. A new Senior Vice President will lead this office, and will report directly to me.

UC is a nearly 27 billion dollar organization. But I have just a few direct reports. This reporting line underscores the significance of the work taking place under the auspices of the Innovation and Entrepreneurship Initiative. At the same time, we are re-purposing staff within the Office of the President to this new Office, instead of hiring additional new staff members. Importantly, we are pursuing these initiative efforts without any new state money.

However, if the Governor and the Legislature would like to support UC activities that amplify innovation and entrepreneurship in California, our doors are open.

Two years ago, we at UC could not have pursued these three innovation priorities successfully. It took until now to build the sense of energy and empowerment our researchers and our staff members needed to create the right infrastructure, launch the programs, and mark the initial milestones.

Today, the University stands ready and raring to move forward. The research we are undertaking to combat climate change, transform the health sciences, and expand California’s economic activity are just a few of the major endeavors UC is driving in this state, and on behalf of all Californians. And again, UC research does not just create new knowledge about these issues. It also solves them.

Put another way, the University of California is on an eternal quest to solve for “X.” As young Californians learn in 8^th grade algebra, solving for X means figuring out the unknown variable at play in a given equation.

And so whether the issue at hand is genetic sequencing or pediatric cancer research, UC is solving for X.

Whether it is research around the global food supply or food security, UC is solving for X.

Whether it is increasing the number of researchers and innovators in California who are from underrepresented minorities, UC is solving for X.

How do we make a great public research university even greater still? We solve for X.

The variable “X” represents the discoveries UC makes on behalf of all of us who call California home.

And the variable “X” may also be seen as a symbol that represents a crossroads—a meeting point, or an intersection. “X” is where research, and the education mission of the University of California, intersect.

But both UC’s transformative research, and its equally transformative education mission, are issues that often fall to the bottom of the public dialogue about the University of California.

You see, in the two years since I arrived here, I have noticed that what ought to be a robust public dialogue about the University of California is instead a limited conversation. And that limited conversation is fixated on just one thing:

Cost.

Specifically, the cost of running the university; the cost to the students who attend it; and the cost to the state.

Now, we at UC are committed to keeping costs at the University down. This has been a major priority for me since the day I joined the Office of the President.

But a singular focus on cost ultimately constricts any meaningful dialogue about the University of California. It squeezes that dialogue down into spreadsheet cells. It eliminates the voices of Californians with different perspectives and different ideas. It eliminates your voices. And it eliminates what is really at stake in these conversations: the future of the University of California, and what that future means for this state, and by extension, for the nation and the world.

I know that the fixation on cost and the University has had a long run in California.

In 1968, one of my predecessors, Charles Hitch, spoke here at Town Hall, not long after his appointment as President of the University. About a year before, the Board of Regents had fired President Hitch’s predecessor, Clark Kerr.

President Hitch spoke at Town Hall at a crossroads moment for the University of California. The tumult of the Free Speech movement, and the fallout from the power struggle between Governor Reagan, the Board, and President Kerr, had led many to undertake some serious soul-searching about the state’s public research university.

Hitch was a brilliant economist who had served on Averell Harriman’s staff during World War II, and as an Assistant Secretary of Defense during the Kennedy administration. He was what some college students at the time might have called an “establishment man.”

But in his time as UC President, Hitch would vigorously defend the right of Angela Davis to teach at UCLA; fight to protect the University from budget cuts; and work to foster a robust and balanced campus environment against the backdrop of the Vietnam War, and the many other incendiary events of the late 1960s and early 1970s.

(I might add that Hitch did have two mild heart attacks while he was University President…and he kept working.)

Yet in his remarks to Town Hall on that February day in 1968, Hitch did not address issues like academic freedom or free speech. Nor did he address those like the relationship between the state and the University, or the University’s constitutional authority.

Instead, Hitch talked about one thing: cost. Specifically, who pays for what.

The Town Hall Journal printed a condensed version of President Hitch’s remarks not long after he spoke, and included a photo of him speaking underneath this blazing headline:

“University Costs Triggered by Budget Cuts.”

It was a headline for 1968, but it could have been one for 2008, or for several other years in the many decades since the University’s founding. To make his point that “cost,” as Hitch said, and I quote, “is a most acute problem, and the one we must expect to be with us longest,” he ran through a list of high priority issues for the University of California, including these: a rapidly growing population of college-age young people; the need to educate more graduate students; and the expansion of the University’s research enterprise.

Again, these high priority issues remain high priorities in the year 2015. And the question of who will pay for what remains a salient one.

But it is not the only salient question. It is one of many. And it is one that must be asked in a broader context. Even in the field of economics, there are other factors and fundamentals at play besides the concept of “cost.”

So in deference to my predecessor, President Hitch, the brilliant economist, let’s take a step back, and consider the perpetual issue of cost and the University of California through the broader lens of economics as a whole.

There is a principle in economics called the “opportunity cost.” It essentially refers to the loss of other options—or “opportunities”—when one option is picked.

Here is a question that I would like to pose:

What is the opportunity cost of not having a strong University of California?

What is the opportunity cost of not having a public research university in California that is home to Nobel laureates, MacArthur genius award winners, Pulitzer Prize winners, and some of the best researchers and scholars in the world?

What is the opportunity cost of not instructing more than 230,000 students a year at UC? Or of not increasing enrollment to accommodate more Californians?

Now let’s drop the word “cost” for a moment. When we do that, we are left with one word:

Opportunity.

If there is one word that best captures the ethos of the University of California, it is the word “opportunity.”

“Opportunity” is the driving force behind the hundreds of thousands of students UC educates, a vast number far greater than those educated by the University’s private peer institutions.

“Opportunity” represents the brainpower of our researchers and faculty, who set the bar for scholarship in their disciplines and fields of study.

“Opportunity” underlies the University’s public service mission. It is a catch-all term for the public service we undertake, giving back to the people of this state and this country.

“Opportunity” is what makes the University of California this state’s unique institution.

Those opportunities are made manifest in the students who attend this unique institution. And UC—and by extension, California—leads the world in these opportunities. Just last month, the New York Times announced that its College Access Index had demonstrated that the nine undergraduate campuses of the University of California, and I quote, “still lead the nation in providing top-flight higher education to the masses.” End-quote.

Forty-four percent of all UC undergraduates are first generation college students—more than any other elite research university in the country.

Forty-one percent of UC undergraduates qualify for federal need-based Pell grants, meaning that they come from low-income families. Five UC campuses each enroll more low-income students than all eight Ivy League institutions combined.

Within five years of receiving their diplomas from UC, graduates who were low-income students are earning an average income that is higher than what their parents were earning at the time those students attended UC. And let me add that more than 70% of those former low-income students are working in California.

When it comes to UC students, the main objective is not single-mindedly counting costs. It is something bigger than that. Economists call it an investment in human capital. I call it helping human beings seize and fulfill their opportunities.

And we at UC want to increase the number of students who can seize and fulfill those opportunities. Specifically, we want to increase the enrollment of California undergraduate students. And we will increase the number of California undergraduates on our campuses for the next academic year. We will submit our plan to do so with our 2016-17 budget to the University’s Board of Regents next month.

And this brings me to the final point I would like to make today.

For many years, a man named Lloyd Shapley worked as a Professor of Economics at UCLA. In the 1950s, Shapley had conducted research at the RAND Corporation in Santa Monica—right around the time that Charles Hitch, a future President of the University of California, was also undertaking research in economics there.

In 1962, Shapley co-wrote a paper called “College Admissions and the Stability of Marriage.” The title may sound a little mundane…but the content was nothing short of mind-blowing. Shapley rapidly expanded the world’s understanding of cooperative game theory, and provided a theoretical basis for market design and matching. The algorithm in his paper now underlies matching processes like pairing medical students with residency programs, and kidney donors with recipients.

In fact, the implications of this research have been so profound that in 2012, Lloyd Shapley was awarded the Nobel Prize in Economics…for the paper he had written 50 years earlier.

The University of California is the long-bond of our Golden State Society. But through the students it graduates and the research it generates, it pays out even better interest, and for many more years, than the most robust bond with the longest maturity issued by the U.S. Treasury.

There are likely dozens, if not hundreds, of Lloyd Shapleys now teaching and researching at UC. And if Shapley’s career is any guide, then those researchers are due to win their Nobel Prizes somewhere around the year 2060. By about that time, the state of California is also projected to be home to around 50 million people.

These numbers are a clarion call for everyone in this room, and for all Californians. We have some big questions to answer. Questions like these:

As the population of our state swells in the next few decades, what will we as Californians do to ensure that millions of more young people have a place at the University of California?

What will we do as Californians to ensure the University of California remains home to future Nobel laureates, future winners of NSF and NIH grants, future MacArthur genius award winners and future recipients of the National Humanities Medal?

How will we ensure that the University of California grows in the right way?

How will we make a great public research university even greater still?

Your voices need to answer these questions just as much as those in Sacramento or at UC headquarters do. Your voices need to be a part of a broad public dialogue about the University of California and its transformative power to solve the big challenges our society faces. As Californians, you have an ownership stake in this University. And as Californians, you bear an important responsibility for the wide-ranging ramifications of this dialogue. UC is the model for elite public research universities across the globe. And much like the state we call home, it is a bellwether for the nation and the world.

Yes, queries about cost must be asked and answered to the satisfaction of Californians. But fundamentally, the public dialogue about UC boils down to two basic questions:

What is the opportunity cost of not having a strong University of California?

What are the opportunities lost without a University of California?

These are the questions all Californians must answer. These are the questions all of you must answer.

It has been an honor to speak to you today. Thank you to Town Hall Los Angeles for the invitation to join you this afternoon. And thank you for your time and attention. Go Bruins!