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DRAFT FOR DISCUSSION. AUBURN UNIVERSITY STRATEGIC PLANNING SITUATION ASSESSMENT October 2006. Messina & Graham. Contents. I. Overview of Strategy-Development Process . . . . . . . . . . . . . . . . 4

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slide2

Contents

  • I. Overview of Strategy-Development Process . . . . . . . . . . . . . . . . 4
  • II. Profile of the Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
  • • Summary Slides . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
  • • Implications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
  • Auburn University (AU)
  • • Profile
        • Students . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
        • Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .80
        • Extension . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .99
        • Finances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
  • • Assessment of Strengths, Weaknesses,
    • Opportunities, and Threats (“SWOT” Assessment) . . . 113
  • • Strategic Challenges and Implications . . . . . . . . . . . . . 117

Messina & Graham

2

slide3

Contents (Continued)

  • IV. Auburn University Montgomery (AUM)
  • • Comparison of Auburn University and AUM . . . . . . . . . 125
  • • Profile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
  • • Assessment of Strengths, Weaknesses,
  • Opportunities, and Threats (“SWOT” Assessment) . . . .151
  • • Strategic Challenges and Implications . . . . . . . . . . . . . 155
  • V. Next Steps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .159
  • Appendices
  • • Auburn University Strategic Planning – Profile of the
  • Environment, July 2006 (separately bound)
  • • Ranking Methodologies . . . . . . . . . . . . . . . . . . . . . . . . . .161
  • • Selected Information Sources . . . . . . . . . . . . . . . . . . . . .164

Messina & Graham

3

slide4

I. Overview of Strategy-Development Process

1.

SITUATION

ASSESSMENT

2.

OPTION

GENERATION

3.

OPTION

EVALUATION

4.

STRATEGY

SELECTION

5.

EXECUTION

  • Candidate
  • strategic
  • objectives
  • and directions
  • Rationale for
  • each option
  • Detailed
  • assessment
  • of each option
  • Comparison of
  • options
  • Rationale
  • Full description,
  • including goals
  • and action
  • initiatives
  • Profiling the
  • environment
  • Profiling Auburn
  • - Main campus
  • - AUM
  • Identifying
  • strategic
  • challenges and
  • implications
  • Implementation
  • plan, responsibility
  • assignments
  • Progress measures,
  • review milestones
  • Adjustments and
  • adaptation

Messina & Graham

4

slide5

Key Elements of a Strategy

  • Special attributes and their sources
  • Differentiation that confers relative advantage
  • Consistent with vision and mission

DISTINCTIVENESS

  • Choices about allocating scarce resources
  • Fact-based decision-making
  • Coherent set of initiatives

RESOURCE

COMMITMENTS

  • Implementation plans, responsibility assignments
  • Progress measures, review milestones
  • Adjustments and adaptation

EXECUTION

Messina & Graham

5

slide6

II. Profile of the Environment

  • • Summary Slides
  • - Pervasive Trends
  • - Forces Affecting Higher Education
  • • Implications
    • - For all universities
    • - For AU (Illustrative)

Messina & Graham

6

slide7

Summary

FORCES AFFECTING

HIGHER EDUCATION

PERVASIVE TRENDS

  • Enrollment Growth
  • Affordability Challenge
  • Demands for Quality
  • Improvement
  • Efficiency Imperative
  • Diverse Perspectives on the
  • University in the Twenty-
  • First Century
  • Globalization
  • Information Revolution
  • Natural-Resource Demands
  • and Environmental Strain
  • Aging Populations and
  • Increasing Minorities

Messina & Graham

7

slide8

Pervasive Trends

  • Transforming worldwide commerce and
  • employment
  • Generating global competition for knowledge work

GLOBALIZATION

  • Information technology, telecommunications,
  • connectivity
  • Dramatic and ubiquitous impacts

INFORMATION

REVOLUTION

  • Demand increasing because of global economic
  • and population growth
  • Environment under strain

NATURAL

RESOURCES

  • Aging populations in developed countries
  • Rapid rise in U.S. minorities, especially
  • Hispanics

DEMOGRAPHICS

Messina & Graham

8

slide9

Implications of Pervasive Trends for Universities

  • Ensuring competitiveness of graduates
  • Increasing students’ international awareness

GLOBALIZATION

  • Multiple challenges and opportunities in
  • teaching and learning, research, extension,
  • and administration and operations

INFORMATION

REVOLUTION

  • Teaching and learning, research, extension and
  • operations opportunities
  • Examples: alternative energy sources,
  • conservation, agricultural technologies

NATURAL

RESOURCES

  • Enriching lifelong learning
  • Embracing greater diversity

DEMOGRAPHICS

Messina & Graham

9

slide10

Implications of Higher-Education

Trends for Universities

  • Focusing on enrollment objectives

ENROLLMENT

GROWTH

  • Ensuring diverse access

AFFORDABILITY

CHALLENGE

  • Innovating and experimenting with new curricula
  • and teaching approaches
  • Measuring performance in learning and teaching

QUALITY IMPROVEMENT

  • Implementing proven business practices to
  • reduce cost growth

EFFICIENCY

IMPERATIVE

  • Re-examining vision and mission
  • Redesigning business model to adapt to
  • dramatic change

21ST CENTURY

UNIVERSITY

Messina & Graham

10

slide11

Implications for Auburn University

Pervasive Trends

ILLUSTRATIVE

TREND / IMPLICATIONS

POSSIBLE AUBURN RESPONSE

  • Raise performance expectations for students and
  • measure results
  • Develop new approaches to undergraduate education
  • Increase international course and language skills
  • offerings and requirements

GLOBALIZATION

  • Competitiveness of
  • graduates
  • Students’ international
  • awareness

INFORMATION

REVOLUTION

  • Ensure implementation of technologies that enable
  • cost and quality improvements
  • Challenges and
  • opportunities across
  • the enterprise

Messina & Graham

11

slide12

Implications for Auburn University

Pervasive Trends

ILLUSTRATIVE

TREND / IMPLICATIONS

POSSIBLE AUBURN RESPONSE

  • Advance teaching and research in alternative energy
  • sources, conservation, agricultural technologies
  • Promote energy-efficient building design and operations

NATURAL

RESOURCES

  • Opportunities across
  • the enterprise

DEMOGRAPHICS

  • Explore distance learning for specific markets
  • (e.g., alumni, seniors)
  • Prepare for challenges resulting from growth in Hispanic
  • students
  • Enriching lifelong
  • learning
  • Embracing greater
  • diversity

Messina & Graham

12

slide13

Implications for Auburn University

Forces Affecting Higher Education

ILLUSTRATIVE

TREND / IMPLICATIONS

POSSIBLE AUBURN RESPONSE

ENROLLMENT

GROWTH

  • Strengthen image of value to compensate for possible
  • reduction in applicant pool
  • Focusing on enrollment
  • objectives

AFFORDABILITY

CHALLENGE

  • Constrain expense growth through improving efficiency
  • and applying technology
  • Increase resources available for need-based aid
  • Ensuring diverse
  • access

Messina & Graham

13

slide14

Implications for Auburn University

Forces Affecting Higher Education

ILLUSTRATIVE

POSSIBLE AUBURN RESPONSE

TREND / IMPLICATIONS

QUALITY

IMPROVEMENT

  • Raise performance expectations for students
  • Innovate and experiment with new teaching approaches,
  • including beyond the classroom
  • Focus on learning objectives and measure results
  • Developing innovative
  • teaching and learning
  • approaches
  • Measuring performance
  • in learning and
  • teaching

Messina & Graham

14

slide15

Implications for Auburn University

Forces Affecting Higher Education

ILLUSTRATIVE

POSSIBLE AUBURN RESPONSE

TREND / IMPLICATIONS

EFFICIENCY

IMPERATIVE

  • Perform a comprehensive review of cost elements and
  • processes
  • Implement focused technology solutions that reduce or
  • contain costs
  • Examine approaches to help enable the faculty to become
  • more productive in their teaching and research activities
  • Implementing proven
  • business practices to
  • reduce cost growth

Messina & Graham

15

slide16

Implications for Auburn University

Forces Affecting Higher Education

ILLUSTRATIVE

POSSIBLE AUBURN RESPONSE

TREND / IMPLICATIONS

21ST CENTURY

UNIVERSITY

  • As a key building block for creating a twenty-first
  • century vision for Auburn, perform an assessment of
  • the University’s strengths and weaknesses, and profile
  • the opportunities and threats it faces (“SWOT”
  • assessment)
  • Re-examining vision and
  • mission
  • Redesigning business
  • model to adapt to
  • dramatic change

Messina & Graham

16

slide17

III. Auburn University*

• Profile

• Assessment of Strengths, Weaknesses, Opportunities, and Threats (“SWOT” Assessment)

• Strategic Challenges and Implications

*Acknowledgment: The Director and staff of Auburn’s Office of Institutional Research and Assessment were extremely helpful in compiling and critiquing selected data presented in this profile of Auburn, and in suggesting additional sources. Even so, the selection of data to be presented, all judgments expressed,

and any remaining errors are the sole responsibility of Messina & Graham

Messina & Graham

17

slide18

Profile of Auburn University

  • Students
  • Research
  • Extension
  • Finances

Messina & Graham

18

slide19

1. Students

• Student demographics. AU’s demand outlook (in terms of projected numbers of high-school graduates) is relatively flat, and its current acceptance rate is above 80 percent. It may be challenging for Auburn to maintain enrollment levels while at the same time raising tuition and the target scores of entering freshmen

• In-state competition. Reasons for strong students to choose in-state competitors likely include family allegiance, cost, and preferences for certain campus environments or programs

• Out-of-state competition. Out-of-state students face a high financial penalty for attending AU. This is especially true for strong students from Georgia, Tennessee, and South Carolina who qualify for HOPE or similar merit scholarships

• Value proposition (real and perceived quality of the institution and benefit of attending, relative to cost). Overall, AU’s value proposition is in the middle range of its regional peers. But several AU programs have compelling value propositions

Messina & Graham

19

slide20

1. Students (Continued)

  • • Scope for selectivity. AU’s scope for greater student selectivity is limited because, given its large size in a relatively small state, it enrolls a higher fraction of its home state’s high-school graduates than competitors in Georgia and Florida enroll from theirs
  • • Value-added (impact of the undergraduate program on building students’ skills). AU’s current value-added performance evidences significant opportunity to improve. This observation applies to many peer institutions as well
  • • Distribution by areas of study. AU’s distribution of students by area of study is similar to that of Alabama’s leading universities overall and to that of a highly-regarded land-grant institution in another state, Texas A&M
  • • Tuition trends. Over the past decade, AU’s tuition increases have far exceeded inflation as measured by the Consumer Price Index (CPI)

Messina & Graham

20

slide21

STUDENT DEMOGRAPHICS

• The regional demand outlook for university attendance appears reasonably level over time.

Alabama’s public high-school graduate numbers are projected to peak in 2007, and by

2015 to be five percent below their 2005 level. After their recent rapid growth, Georgia’s

and Florida’s numbers of high-school graduates are projected to level off between 2010

and 2014, and then to begin growing again. (It is worth noting that there are significant

variations among demographic projections). In total, Georgia produces approximately two

times as many, and Florida more than four times as many, public high-school graduates as

Alabama. Chart 1

Messina & Graham

21

slide22

Public High-School Graduates 1995 - 2015

Chart 1

Alabama

Number of Students

2015 - Down 5% from 2005

37,400

37,900

37,100

35,000

35,300

Source: National Center for Education Statistics (NCES): Projections to 2015, Table 24

22

Messina & Graham

slide23

Public High-School Graduates 1995 - 2015 (Continued)

Chart 1

Alabama

Georgia

Number of Students

2015 – Up 10% from 2005

80,500

78,900

73,700

62,500

56,300

37,900

35,000

37,100

37,400

35,300

Source: NCES: Projections to 2015, Table 24

23

Messina & Graham

slide24

Public High-School Graduates 1995 - 2015 (Continued)

Chart 1

Alabama

Florida

2015 – Up 10% from 2005

Number of Students

150,000

154,400

139,800

111,000

89,000

35,000

37,100

37,400

37,900

35,300

Source: NCES: Projections to 2015, Table 24

24

Messina & Graham

slide25

• Hispanics, currently a very small portion of high-school populations in Alabama and

Georgia, are projected to make up ten percent of Alabama’s and 26 percent of Georgia’s

high-school graduates by 2018. Hispanics historically have attended and completed

college at much lower rates than whites and African-Americans, potentially reducing the

applicant pool unless this group can be integrated more successfully into higher

education. Hispanic students are expected to account for over one-third of Florida’s public

high-school graduates by 2018, equivalent to twice the number of African-American

graduates. Chart 2

Messina & Graham

25

slide26

Minority Shares of Public High-School Graduates

Chart 2

Alabama

32%

30%

10%

1%

2002

2018

2002

2018

Note: AU 1.5% Hispanic enrollment in 2005

Source: SREB Fact Book on Higher Education, 2005; AU OIRA

26

Messina & Graham

slide27

Minority Shares of Public High-School Graduates (Continued)

Chart 2

Georgia

Alabama

33%

32%

30%

27%

26%

10%

2%

1%

2002

2018

2002

2018

2002

2018

2002

2018

African-American

Hispanic

African-American

Hispanic

Source: SREB Fact Book on Higher Education, 2005; AU OIRA

27

Messina & Graham

slide28

Minority Shares of Public High-School Graduates (Continued)

Chart 2

Alabama

Florida

32%

36%

30%

20%

18%

17%

10%

1%

2002

2018

2002

2018

2002

2018

2002

2018

African-American

Hispanic

African-American

Hispanic

Source: SREB Fact Book on Higher Education, 2005; AU OIRA

28

Messina & Graham

slide29

• Over 40 percent of AU's out-of-state freshmen entering in fall 2006 were from Georgia,

down slightly from 2005. Chart 3

- This high dependency on Georgia as AU’s main out-of-state market does not provide

much opportunity for diversification in case of a policy or economic change that

affects AU’s enrollments from that state

- However, AU captures an impressive 31 percent of all Georgia students and 19

percent of all Florida students who leave their states to attend a public research

university in the southern region. Chart 4

- Out-of-state freshmen score at levels slightly below those of Alabama residents on the

ACT. The other states’ flagships will naturally tend to attract the strongest students

from their own states. Chart 5

Messina & Graham

29

slide30

AU Freshmen by State – 2006

Chart 3

100% = 4,077

Georgia 17%

Florida 6%

Tennessee 4%

Alabama 61%

Other 12%

Source: AU OIRA

30

Messina & Graham

slide31

AU Share of Freshmen Leaving Their Home State for an SREB Public Research University – 2005

Chart 4

31%

19%

14%

Source: AU OIRA

31

Messina & Graham

slide32

Equivalent ACT Scores of AU Freshmen – 2005

Chart 5

24.4

24.1

Source: AU OIRA

32

Messina & Graham

slide33

• With an acceptance rate at above 80 percent, there is little room for Auburn to increase

enrollment by admitting more liberally. Chart 6

• At 26 percent, AU’s yield on out-of-state acceptances is half of its in-state yield. Chart 7

Messina & Graham

33

slide34

AU Total Applications, Acceptances, and Enrollment – 2005

Chart 6

Note: 81.5 percent of applicants are accepted, with a 36 percent yield

Source: AU OIRA

34

Messina & Graham

slide35

Yield Rate of AU Admitted Students

In-State and Out-of-State – Average, 2002 - 2005

Chart 7

52%

26%

Source: National Student Clearinghouse; AU Office of Admissions & Records

35

Messina & Graham

slide36

IN-STATE COMPETITION

University of Alabama (U of A), University of Alabama at Birmingham (UAB), Southern Union State Community College (SUSCC), University of Alabama at Huntsville (UAH), and Troy represent the main competition for Alabama students, together accounting for half of all AU admits who enrolled elsewhere. It is worth questioning whether prospective students who decided to attend much less academically strong schools were actually an appropriate admissions match for AU. If practicable, declining admission to the least-qualified candidates would lead to a lower acceptance rate, which would both present a stronger image of AU and result in a higher US News & World Report (USNWR) score, at minimal cost in numbers enrolling. Charts 8, 9

The three U of A schools, along with Samford and Birmingham Southern (BHAM S), enrolled 350 of the best-prepared AU admits in 2003, compared with 960 who chose Auburn. Reasons for strong students to select these competitors likely include family allegiance, cost, and campus-environment and program preferences

Messina & Graham

36

slide37

Top 10 Competitors for Alabama Students:

Schools Attended by AU Admits Not Enrolling at Auburn – 2003

Chart 8

Best-Prepared AU Admits (ACT 27 and Above)*

All AU Admits

Percent

Percent

Number

University of Alabama (U of A)

University of Alabama at Birmingham (UAB)

Southern Union State Community College (SUSCC)

University of Alabama at Huntsville (UAH)

Troy University (Troy)

University of South Alabama (USA)

Birmingham Southern University (BHAM S)

Samford University (Samford)

University of North Alabama (UNA)

Auburn University Montgomery (AUM)

Combined Total (Ten Schools)

Other Institutions

23

7

144

9

2

49

8

--

--

6

3

56

5

--

--

5

1

23

4

2

42

4

2

33

3

--

--

3

--

--

70

17

347

30

83

*In-State and Out-of-State

Source: National Student Clearinghouse; AU Office of Admissions & Records

37

Messina & Graham

slide38

Competition for Alabama Students:

Schools Attended by AU Admits Not Enrolling at Auburn – 2006

Chart 9

Cost versus AU ($)3

Likely Reason (M&G Assessment)7

% Attend1

% Best ≥ 272

Avg. GPA5

ACT Range (25% - 75%)6

University type (USNWR Category)4

2003 Data

AU -- --

U of A 23 7

UAB 9 2

SUSCC 8 --

UAH 6 3

TROY 5 --

USA 5 1

BHAM S 4 2

Samford 4 2

UNA 3 --

AUM 3 --

TOTAL 70 17

--

-2,400

NR

NR

-2,600

-3,800

-2,800

17,000

8,700

-4,000

-3,530

88th best*, more selective, large, public

88th best*, more selective, large, public

Selective, large, public

Community college

More selective, mid-size, public

Selective, mid-size, public

Selective, mid-size, public

More selective, small, private, Utd Methodist

More selective, small, private, Baptist

Selective, mid-size, public

Less selective, mid-size, public

3.5

3.4

3.3

NA

3.4

NA

NA

3.3

3.6

2.9

NA

21-27

21-27

20-26

NA

22-28

21

19-25

23-29

23-28

18-23

18-23

--

Loyalty, price

Price

Price, work

Price

Price

Price

Prefer small private

Prefer small private

Price

Price

Notes to this chart are on the next page

Source: USNWR, August 2006; Messina & Graham

38

Messina & Graham

slide39

Competition for Alabama Students

Schools Attended by AU Admits Not Enrolling at Auburn – 2006 (Continued)

Chart 9

Notes

*Ranking versus all schools. For public schools both AU and U of A were rated 39th

1Percentage of AL resident admits to AU who instead attend each listed school

2Percentage of ACT 27 resident and out-of-state admits to AU who instead attend each listed school

3Cost equals the total of tuition, fees, room and board (NR denotes non-residential schools). Difference in dollars per year between AU’s full-pay tuition and living expenses and those of listed school. Negative number indicates school costs less than AU

4Type of institution based on USNWR categories

5Average of entering freshmen’s high-school GPAs

6Lower and upper quartiles of ACT scores of entering freshman class

7Messina & Graham judgment regarding why student might chose the listed school over an offer from AU

39

Messina & Graham

slide40

• AU’s combined in-state, full-pay tuition, room and board are 18 – 30 percent more than

those of public-university competitors. AU tuition is almost twice SUSCC’s. For the best-prepared students that AU would probably seek to capture, there is no survey evidence, but price would be a logical factor in some of their decisions to decline AU for a place at U of A or at the less academically-strong UAB, UAH, or USA. U of A, UAH, and UAB are on Princeton Review’s “Best-Value” list, while Auburn is not. Chart 10

Messina & Graham

40

slide41

Cost of Attending for Alabama Students – 2005-06

Combined Tuition, Fees, Room and Board – Dollars

Chart 10

13,000

7,500

10,700

10,500

5,400

5,700

9,200

4,900

4,800

5,500

5,300

4,800

4,300

2,700

AU

U of A “Best-Value”

UAH “Best- Value”

Troy

UAB “Best- Value”

SUSCC

Source: USNWR, August 2006; SUSCC website; Princeton Review

41

Messina & Graham

slide42

• Using USNWR’s overall scores as a reasonable proxy for how students and their parents

value universities, AU appears to represent a good value tradeoff for Alabama students

compared to out-of-state flagships, even those that rank much higher academically.

Similarly, AU seems to offer a better value proposition than the state’s premier private

schools, which nevertheless attract well-prepared students. There may be an opportunity

to further develop and position AU’s Honors College as a strong alternative to these small

private schools. Chart 11

Messina & Graham

42

slide43

Price/Value Map – Alabama Students’ Perspective 2005-06

Chart 11

Combined Tuition, Fees, Room and Board

BHAM S

ILLUSTRATIVE

GA Tech

USC

Clemson

UGA

UFL

Samford

UTN

AU

Good value at various price points

U of A

UAH

Troy

Value, measured by USNWR scores*

*USNWR score is based on a blend of peer assessment, retention/graduation rates, class size, faculty ratio, freshmen ACT scores, percent in top ten percent of high-school class, and alumni giving. See appendix for more detail

43

Messina & Graham

Source: USNWR, August 2006

slide44

OUT-OF-STATE COMPETITION

University of Georgia (UGA) is the leading competitor for Auburn admits from out-of-state;

otherwise, many universities each command small shares. The principal rivals are other

states’ flagships.For the strongest AU admits who enroll out-of-state, UGA, Georgia Tech,

Clemson, and the University of Florida (UFL) enroll the largest numbers; but in this best-

student group as well, several institutions each account for small shares. Chart 12

Messina & Graham

44

slide45

Top 10 Out-of-StateCompetitors – 2003

Chart 12

Best-Prepared AU Admits (ACT 27 and Above)*

All AU Admits

Percent

Percent

Number

University of Georgia (UGA)

Clemson University (Clemson)

University of Tennessee (UTN)

Georgia Institute of Technology (GA Tech)

University of Florida (UFL)

Florida State University (FL S)

University of Mississippi (UMS)

University of South Carolina (USC)

Georgia Southern University (GA S)

Kennesaw State University (KSU)

Combined Total (Ten Schools)

Other Schools

14

4

3

3

3

3

3

3

2

2

40

60

10

3

2

6

3

1

2

--

--

--

27

73

209

65

41

124

62

21

46

--

--

--

568

*In-State and Out-of-State

Source: National Student Clearinghouse; AU Office of Admissions and Records

45

Messina & Graham

slide46

• Out-of-state students, especially Georgia students who qualify for HOPE, and their

families face a high financial penalty for attending AU. Chart 13.Financial considerations

probably factor into the college choices of a segment of these students. AU ranks highest

among competing schools on USNWR’s “Most-Debt” list. According to this source, 65

percent of AU graduates incur debt averaging $21,000. At the regional “Least-Debt”

winner, UGA, 43 percent of graduates incur an average debt of $13,000

• A Georgia high-school graduate who is admitted to Georgia Tech or UGA may not choose

AU over those schools unless attracted by a specific program with a strong reputation. In

general, the implication is that it is difficult for AU to attract many top students from

Georgia

• A Georgia high-school graduate who is not admitted to UGA can choose either to attend

an in-state school that ranks lower than AU or to pay a substantial premium to attend

school out-of-state. To such students, UTN and U of A may appear to offer superior

value compared to AU, family allegiances aside

Messina & Graham

46

slide47

Price/Value Map – Georgia Students’ Perspective – 2006

Chart 13

Combined Tuition, Fees, Room and Board

ILLUSTRATIVE

Clemson

UFL

AU

Value plays out-of-state for those who don’t get into UGA or GA Tech

U of A

UTN

Georgia schools for non-HOPE students

UGA

GA Tech

GA Southern

UGA HOPE

Tech HOPE

GA Southern HOPE

Georgia schools for

HOPE students

Value USNWR Score

Source: USNWR, August 2006

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VALUE PROPOSITION

AU is in the middle range among its regional public-school competitors in the overall USNWR

ranking. But AU’s undergraduate Engineering and Business programs advanced from

2005 to 2006 and are ranked as stronger than those of several competitors. Chart 14.The

Architecture program is nationally competitive, and the Graduate School of Education and the

Communications Disorders programs both rank well. Chart 15. There may be further scope to

emphasize this program performance in marketing AU to students and parents who are

attentive to quality and career value when choosing schools

AU’s value proposition to a Georgia high-school student likely features big-time sports and a

more personal touch than UGA, with possible draws for those interested in specific programs

with strong reputations. Another potential positive is AU’s graduation rate over predicted

performance, which was outstanding in 2005 and remains good in 2006. A potential

negative is AU’s absence from Princeton Review’s “Best-Value” list. AU’s disappearance in

2006 from the list of schools where “students (almost) never study” should help attract stronger

undergraduates. Chart 15

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AU Competitor Rankings in USNWR – 2005-06

Chart 14

BEST UNDERGRADUATE ENGINEERING SCHOOLS

BEST UNDERGRADUATE BUSINESS PROGRAMS

TOP PUBLIC UNIVERSITIES

2005

2006

2005

2006

2005

2006

9 8 Georgia Tech

16 13 UFL

19 21 UGA

21 21 Texas A&M

34 30 Clemson

38 39 Auburn

38 39 UTN

50 39 U of A

52 52 FL ST

52 54 USC

6 6 Georgia Tech

14 17 Texas A&M

31 30 UFL

57 60 Clemson

67 60 Auburn

67 71 UTN

102 * U of A

102 * USC

26 29 UFL

30 29 UGA

30 29 Texas A&M

35 35 Georgia Tech

40 42 USC

47 42 FL ST

47 42 UTN

57 51 Auburn

57 60 U of A

77 73 Clemson

87 83 UAB

87 83 UMS

* Not listed among top 105

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Auburn’s Value Proposition

Chart 15

  • USNWR 2006 RANKINGS
  • Ranked 18th (4th in 2005) in nation for retention over predicted level (but 98th for absolute retention)
  • Ranked 88th among all schools and 39th among public schools
  • Graduate School of Education in top 100 in nation
  • Communication Disorders program in top 50 in nation
  • Faculty-Student ratio better than U of A, UGA, and much better than UFL and FL ST
  • “Faculty resources” – class size, faculty pay and caliber – rank significantly lower than for Georgia Tech, UGA, U of A, and UTN
  • DESIGN INTELLIGENCE 2006 RANKINGS
  • Architecture program 15th in nation (no regional competitor)
  • Interior Design 7th in nation (LSU 10th, no other regional competitor)
  • Industrial Design 3rd in South (after Georgia Tech)

Source: USNWR; Design Intelligence

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Auburn’s Value Proposition (Continued)

Chart 15

PRINCETON REVIEW LISTS

AU RANK REPRESENTATIVE COMPETITORS

2005 2006 RANKED ON LIST

Best-Value College (“Fabulous NOT LISTED NOT LISTED U of A, UAB, UAH, Clemson,

Education at Reasonable Price”) University of South Carolina,

FL ST, GA Tech

“Town-Gown Relations are Great”#9 #11 Samford, Clemson, Texas A&M

“Students Pack the Stadiums”#11 #13 UGA, UFL, UNC, UTN, UT Austin

U of A, Clemson

“Their Students (Almost) Never Study”#10 NOT LISTED UGA, UFL, UMS, UT Austin

“Best College Library” #14 #15

LIST

Source: Princeton Review

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• AU’s ACT scores in 2005 were no longer the highest among Alabama public schools, as they had been in 2004. U of A’s scores matched those at AU, and UAH’s scores were higher. AU’s scores are closer to those of lesser-ranked Georgia Southern and GSU than to Georgia’s flagships, UGA and Georgia Tech. AU’s number of National Merit Scholars is lower than that at regional competitors including UFL and Georgia Tech. Chart 16

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Freshmen ACT Scores for Leading Competitors – 2005

25th to 75th Percentiles

Number of National Merit Scholars

Chart 16

GA Tech

100

28-32

UFL

230

25-31

UGA

49

25-30

Clemson

31

25-30

FL ST

10

23-28

USC

40

23-28

UTN

21

23-28

UAH

1

22-28

GA Southern

1

22-26

AU

29

21-27

U of A

68

21-27

UMS

36

20-26

20

25

30

35

Source: USNWR, August 2006;National Merit Scholarship Corporation Annual Report, 2005

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SCOPE FOR SELECTIVITY

AU has limited scope for greater selectivity, because its enrollment is large in relation to the

total number of Alabama’s high-school graduates – a far higher share than the flagships in

Georgia, Texas, and Florida educate, for example. Charts 17, 18

• With two relatively large flagship institutions in a comparatively small state, as a matter of

arithmetic AU cannot hope to attain the elite undergraduate status of a Texas A&M or

Georgia Tech. AU and U of A enroll numbers equal to 18 percent of Alabama’s high- school graduates, while UT and Texas A&M enroll numbers equivalent to only six percent of the Texas class. Other things equal, the Texas flagships can be three times as selective as AU. The picture for Florida’s flagships is very similar to Georgia’s: their combined share of high-school graduates is ten percent, but also one institution is clearly academically stronger than the other, able to draw the better students and rank much higher

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GA Tech

UGA

Both Flagships

Scope for Selectivity

Freshmen as Percent of State’s High-School Graduates – 2005

Chart 17

Alabama

Georgia

18.4%

9.9%

9.5%

8.9%

6.3%

3.6%

35*

24*

66*

50*

*Percent From Top 10% of High-School Class

Source: USNWR; NCES

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Scope for Selectivity

Freshmen as Percent of State’s High-School Graduates – 2005

Chart 18

Texas

Florida

10.1%

5.8%

5.5%

4.6%

3%

2.8%

66*

49*

85*

26*

*Percent From Top 10% of High-School Class

Source: USNWR; NCES

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• Reportedly, 35 percent of AU students are from the top ten percent of their high-school

class. Because Alabama is a small state with two relatively equal flagships, this level is

almost inevitably lower than the 50 to 66 percent achieved by the Georgia and Texas

flagship schools, not to mention the University of Florida’s 85 percent. To reach UGA’s

level of 50 percent of students coming from the top ten percent of their high-school class,

Auburn would have to capture about half of all Alabama high-school graduates who finish

in the top ten percent, which would be exceedingly difficult

• But South Carolina shows more similarity to Alabama: it is a small state with two top national, public universities. Clemson's share of its state’s high-school graduates is similar to Auburn’s, and USC’s share is actually higher than U of A’s. Yet despite this “market share of talent” challenge, Clemson ranks considerably higher academically than Auburn, gaining much higher marks for selectivity. It appears Clemson has achieved this by working to position USC as the clear second in the state, enabling Clemson to attract the stronger applicant pool. Chart 19. Auburn’s particular challenge is that it is viewed as equivalent to U of A academically, diluting both Alabama universities’ selectivity

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Scope for Selectivity

Freshmen as Percent of State’s High-School Graduates – 2005

South Carolina

Chart 19

21%

12%

9%

Percent From Top 10% of High-School Class

66

49

Source: USNWR; NCES

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• Another perspective on this limited scope for selectivity is that if AU aspired to reach

Clemson’s ACT scores, (i.e., to move the ACT lower-quartile point up to 24), it would

have to replace 900 low-scoring freshmen in its current class profile with new students

scoring 24 or higher. But the pool of higher-scorers is finite (absent any marked improvement in Alabama’s quite weak high-school performance), and AU competes with other institutions to recruit from this pool. Adding 900 higher-scorers would require increasing AU’s share of all such Alabama students from 25 percent to 37 percent, largely at the expense of U of A, UAB, UAH, Samford, Birmingham Southern, and Troy. While there probably are incremental opportunities to gain some market share, a goal of 50 percent share gain in a rather mature “market” seems unrealistic. (Note: The foregoing analysis is based on data reported in 2005. In the August 2006 USNWR report, Clemson has moved its lower-quartile ACT bar one point higher and AU’s has decreased by one point, making catch-up that much harder). Chart 20

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Alabama ACT Scores Distribution - 2005

Chart 20

Shares of Those with ACT of 24 and Over*

AU 25%

Other 27%

100%

57%

Troy 3%

20%

BHAM S 4%

23%

20%

23%

UAH 6%

U of A 21%

Samford 6%

UAB 8%

20 or below

21 - 23

24 and over

Number of

Students

32,122

18,263

6,467

7,392

7,400 target students for improving freshmen scores at AU

*2004

Source: ACT; USNWR

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• The State of Alabama receives a D- grade from the National Center for Public Policy and Higher Education on the measure of “High-School Student Preparation to Succeed in College.” Relative to other states, a smaller fraction of Alabama high-school students perform well on the ACT and Advanced-Placement tests. Chart 21. This makes it more difficult for Auburn to be as selective as universities in many other states

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Alabama High-School Student Preparation

Chart 21

ACT Performance Percentage of Students Scoring in the Top 20% Nationally 2005

Advanced Placement Performance Percentage of Students Scoring 3 or Higher On At Least One AP Exam 2005

20%

14.4%

14.1%

5.3%

Source: Measuring Up, 2006; Advanced Placement Report to the Nation, 2006

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• AU’s 25 percent share of the state’s National Merit Scholars, while much lower than that of

rival U of A’s, is similar to UGA’s share of Georgia’s National Merit Scholars. Increasing the

number of in-state National Merit Scholars at AU would largely have to occur at the expense

of U of A, since Alabama’s other schools enroll only 16 percent of the total. Chart 22.

National Merit Scholar finalists are those high-school students who score highest in their

states on the Preliminary SAT test in junior year and whose school record does not disqualify

them.1 This designation may not be a necessary and / or sufficient marker for a university

that is intent on targeting a desirable group of academic stars. Moreover, the National Merit

Scholar designation does not reflect any of the non-academic strengths – such as

participation or excellence in athletics, arts, student leadership, community service and so on

– that leading universities typically seek to recruit to their student body. Recruiting more

National Merit Scholars would have no impact on AU’s position in the leading rankings

1 Only six percent of these top-scoring semi-finalists are disqualified, so the screening of in-school performance does not provide universities with much evidence of academic excellence.

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Competitor Shares of National Merit Scholars - 2005

Chart 22

Alabama (116 Students in total)

Georgia (208 Students in total)*

Other 3

1%

Auburn 29

Emory 56

25%

27%

59%

48%

8%

Samford 9

8%

GA Tech 100

24%

U of A 68

UAB, BHAM S, UAH, Other 10

UGA49

* Georgia colleges import a net 19 Scholars above the 189 state winners

Source: National Merit Scholarship Corporation Annual Report, 2005

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VALUE-ADDED

Input measures such as admission yields, ACT scores, USNWR rankings, and tuition do not indicate how well the university educates its undergraduates – its “value-added.” In terms of the competition among peer schools to enroll students, that neglect of value-added is currently appropriate, since prospective students, parents and high-school counselors have limited access to (or understanding of) comparisons of value-added. The informed student prospect will consult USNWR and Princeton Review and form a subjective impression from a campus visit and conversations with friends, but that is the extent of his or her information about a university

• Still, as suggested in Chapter II, “Profile of the Environment,” value-added is a natural way

for Auburn to consider responding to many of the external forces at work. These possible

responses include raising performance expectations for students, developing new

approaches to undergraduate education, strengthening AU’s value image, and focusing on

learning objectives and measuring results

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• AU has been among the fairlyearly adopters of the two main assessments of value-added

that have received widespread national support and a degree of validation: the Collegiate

Learning Assessment (CLA) and National Survey of Student Engagement (NSSE). CLA

results so far show that AU is roughly at parity with most other participating schools but

behind the best schools in terms of developing desirable skills in its undergraduates.

Relative to the top 10 percent of participating schools nationally, Auburn earns a B or C

grade on its educational approaches, as broadly measured by the NSSE. Chart 23

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Measures of Auburn’s Value-Added

Chart 23

COLLEGIATE LEARNING ASSESSMENT(CLA) 2005 – 2006

AU’s OVERALL

RESULT

At Expected Level (on par with 60-75% of

CLA-participating schools)

SENIORS’ PERFORMANCE

BY TASK (RELATIVE TO

EXPECTED LEVEL)

Analytic Writing

Make an Argument

Critique an Argument

Performance Task

Below Expected Level

At Expected Level

Below Expected Level

At Expected Level

Source: AU OIRA

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Measures of Auburn’s Value-Added (Continued)

Chart 23

NATIONAL SURVEY OF STUDENT ENGAGEMENT (NSSE)

Academic Challenge 79.8 82.5

Active, Collaborative Learning 75.7 87.7

Student-Faculty Interaction 77.1 76.4

Enriching Experiences 75.3 70.1

Supportive Campus 88.7 88.5

Implied Improvements

More Assigned Reading and Writing

More Time Preparing for Class

More Emphasis on Developing Higher-Order Cognitive Skills

AU Scores – 2006*

Freshmen

Seniors

*Where 100 equals the average score of the top 10 percent of participating schools

Source: AU OIRA

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• A gross measure of a university’s educational effectiveness, cited by the Spellings Commission among others, is its students’ six-year graduation rate. Against this measure, AU has performed well relative to graduation rates predicted from the ACT scores of entering students. Even so, it must be considered a disappointing result that only 62 percent of the 1999 entering class had obtained their AU degrees by 2005. This level is below that of most of AU’s research university competitors and below the figure for U.S. four-year schools overall. Chart 24

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Six-Year Graduation Rate

AU versus Selected Competitors

Percent of 1999 Entering Class Receiving Bachelor's Degree

Chart 24

79

76

75

74

66

National Average = 66%

65

63

57

62

56

UFL

GA Tech

Clemson

UGA

FL ST

USC

U of A

AU

UTN

UMS

Source: USNWR, 2006; Spellings Commission final report

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DISTRIBUTION OF STUDENTS BY AREA OF STUDY

Auburn’s current distribution of undergraduates by college or school generally reflects that of the state’s top four universities taken together (AU, U of A, UAH, and UAB). Liberal Arts is the most popular field of study, followed by Business, Engineering, and Science / Math. The traditional land-grant studies account for about 40 percent of the undergraduates. Chart 25. This pattern is consistent with AU’s long-established breadth of studies as well as its position as a relatively large university in a relatively small state

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Distribution of Undergraduates by School

Chart 25

State of Alabama 2005

AU, U of A, UAH, UAB

Auburn 2005

100% = 19,250

100% = 48,554

Human/Social Science 6%

Nursing 3%

Education 7%

Liberal Arts 25%

Agriculture 5%

Other 11%

Liberal Arts 24%

Architecture 7%

Human/Social Science 9%

Science/Math 13%

Science/Math 10%

Business 19%

Business 22%

Engineering 15%

Engineering 16%

Education 8%

Traditional Land Grant Studies

Source: AU OIRA

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Source: AU OIRA; U of A system

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For comparison, even Texas A&M, in the huge state of Texas (where specialization would be

relatively unconstrained by numbers of potential students), has not specialized in technology

schools. Only 19 percent of A&M’s undergraduates are in Engineering, fairly comparable to

Auburn’s 15 percent. Taken together, A&M’s traditional land-grant studies – Engineering,

Agriculture, Science, Veterinary Medicine, and Architecture Colleges – account for 48 percent of

all its undergraduates. The same schools account for 40 percent of Auburn’s enrollment (and

Auburn does not offer undergraduates Veterinary Medicine). Twenty-nine percent of A&M’s

undergraduates are in Liberal Arts or General Studies, compared with 24 percent of Auburn’s in

Liberal Arts. Chart 26

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Distribution of Undergraduates by School

Chart 26

Texas A&M - 2004

Traditional Land

Grant Studies

100% = 35,700

Geosciences 1%

Architecture 4%

Science 5%

Business 11%

Veterinary Medicine 5%

Agriculture 15%

Liberal Arts 18%

General Education Studies 11%

Engineering 19%

Education 11%

Source: Texas A&M Fact Book

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Auburn’s leading shares of the top four’s students are in Architecture and Agriculture – where AU has the only programs – followed by Science / Math, Education, Liberal Arts, Engineering and Business. The only two schools that have a somewhat lower share than AU’s overall share of top four universities’ students are Human Sciences and Nursing. Chart 27

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100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

AU Shares of Alabama Undergraduates by School

Percent of AU, U of A, UAH and UAB Enrolled 2005*

Chart 27

Architect.

Agriculture

Science/ Math

Education

Liberal Arts

Engineering

Business

Nursing

Human / Social Science

100% =

1,263

887

4,883

3,538

11,996

7,604

10,488

2,283

4,534

*2003 for UAH and 2004 for UAB

Source: AU OIRA; U of A system

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With respect to AU’s distribution of graduate students by field of concentration, Education has the largest share, followed by Engineering. Chart 28

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Distribution of Graduate Students by School

Chart 28

Auburn - 2005

100% = 3,169

Architecture 4%

Agriculture 7%

Education 23%

Other 8%

Science/Math 9%

Engineering 21%

Liberal Arts 13%

Business 15%

Source: AU OIRA

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TUITION TRENDS

Over a decade, AU’s tuition increases have consistently far exceeded inflation as measured by

the Consumer Price Index (CPI)

• Between 1995-1996 and 2005-2006, AU’s tuition increased at a compound annual rate of 8.9 percent, 3.5 times the rate of inflation as measured by CPI, and also twice the rate of

public four-year colleges in general

• During this period, AU’s tuition level moved from being much lower than that of the average

public four-year college to about the same

• Out-of-state tuition has generally been maintained at 2.8 times the in-state level, very

slightly less than the average ratio of SREB peers

• Over time, tuition increases at public universities have been larger during periods when

state funding has been less, a trend also reflected at Auburn

• “We currently operate under a model in which educational expenditures at colleges and

universities across the country are rising by about 4.5 to 5 percent annually.”

(University System of Maryland Chancellor William Kirwan)

Continuing increases in net tuition that are in excess of CPI carry the risks of eventually

creating resistance and reducing enrollment, and – if not somewhat attenuated by financial

aid to students who need it – of diminishing diversity in the student body

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2. Research

Although AU’s research funding has increased considerably in dollar terms during the past five

years, it has not kept pace with funding increases at other universities. This result reflects a much more competitive research environment, in which success depends in part on the availability of supplementary resources to cover the costs generated by the research enterprise in excess of the funding it provides. AU’s research funding is well below the Southern Region Education Board (SREB) median

• Total federal research expenditures are projected to be at best flat or, more likely, to

decline over the next five years, driven by the latest budget outlook for large federal deficits

into the indefinite future. Chart 29

- This deficit forecast in turn derives largely from a combination of tax cuts, entitlement

growth for seniors, and defense / security spending increases since September 2001

- At the same time, R&D does not appear to have the strong political constituency

required to command a growing share of the squeezed discretionary budget

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2. Research (Continued)

- Accordingly, the American Association for the Advancement of Science

(AAAS) forecasts a 10 percent real drop in funding for the National Institutes of

Health (NIH), a modest increase in National Science Foundation (NSF), Department of

Energy (DOE), and National Institute of Standards and Technology (NIST) funding (with

a caveat that projected increases often do not translate into reality), and a decrease in

all other non-defense R&D

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Projected Nondefense R&D FY 2006 - 2011

Chart 29

Source: AAAS Analysis Projected Effects of President’s FY 2007 Budget on Nondefense R&D

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• Alabama’s #10 rank among states for federal R&D dollars is well ahead of its

population (#23) and gross-state-product (#25) rankings, driven by massive DoD and

NASA intramural spending

- The state’s academic R&D ranking (#23) is in line with its population. Federally-

funded academic R&D ranks #20, but industry R&D lags at #32

- In Alabama, life sciences account for 69 percent of all academic R&D dollars. In the

U.S., life sciences account for 59 percent of all academic R&D dollars. The

difference presumably reflects UAB’s funding

• Research is becoming much more competitive, with lower success rates projected for applications for NIH grants (down to 19 percent in 2007 from a recent high of 30 percent). Chart 30. Scale matters – the larger research institutions generally have higher success rates

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National Institutes of Health (NIH)

Research Project Grant (RPG) Success Rate

Chart 30

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Source: NIH Agency Budget Justification for FY 2007

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• Research is costly

- In general, as evaluated by several sources including the Huron Consulting Group,

university research-related costs are consistently somewhat greater than the

associated revenues, even including indirect-cost reimbursement by the federal

government

- The trend is toward higher costs, driven by increased compliance requirements

and an increasingly cross-disciplinary research process

- Additionally, state and other funders typically reimburse at lower indirect-cost rates

than the federal government

- Despite the costly nature of performing research, it creates many benefits beyond

the university. For example, research dollars spent generate economic activity that

multiplies the effect, and technology transfer can create value-added intellectual

property and new companies that produce jobs and wealth

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• Research is becoming more cross-disciplinary

- Many research frontiers today occur at the intersection of two or more fields

- Collaborative research partnerships (government / universities / business) are

increasing, even though industrial funding has declined somewhat in recent years

- Technology transfer is getting more attention. Alabama’s rank for patents issued

(35th) is lower than its population or gross-state-product ranks

- There is a rise of R&D-based economic hubs, such as the Research Triangle, with a

few advantaged locations accounting for a disproportionately large share of R&D-

related jobs and funding. In this regard, Auburn is not currently in a strong position,

though it is close enough for faculty collaboration with research universities in

Atlanta and, for life sciences, Birmingham

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• While the amount of research spending at AU has grown considerably in absolute dollars

over the last five years or so, the University's relative position (rank) – 90th among public

universities in federal research dollars and 72nd in total research dollars – has declined,

moving down from 66th in both measures between 1998 and 2003. Chart 31

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Auburn Federal Research Dollars and Rank

Chart 31

$ Millions

45.4

42.4

40.1

31.5

27.7

27.1

Rank

(Public

Universities)

#66

#88

#83

#82

#84

#90

Source: TheCenter; AU OIRA

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• AU’s federal research is at 64 percent of the SREB non-medical school median on a

dollar basis, and even slightly lower when viewed on a per-faculty basis. Chart 32. In comparisons on all other measurements, AU is also below the SREB median

• Total research comparisons are somewhat more favorable, but even in the best light, AU’s

research funding and other performance measures are well below the SREB median.

Chart 32

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AU versus Median of SREB Non-Medical Peer Group

On TheCenter’s Measures – 2005

Chart 32

Research University Quality Indicators AU In Relation to Median Values for Non-Medical School Members of SREB Peer Group

SREB Median = 100

83

78

77

70

64

61

0

Total Research

Total, Per Faculty*

Federal Research

Federal, Per Faculty*

Endowment

Annual Giving

National Academy

*Tenure and Tenure-Track

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Source: TheCenter; AU OIRA

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AU versus Median of SREB Non-Medical Peer Group

On TheCenter’s Measures – 2005 (Continued)

Chart 32

Research University Quality Indicators AU In Relation to Median Values for Non-Medical School Members of SREB Peer Group

SREB Median = 100

68

67

67

60

59

46

Faculty Awards

Doctorates Awarded

Doctorates Per Faculty*

Postdocs

Merit Scholars

Merit Scholars Per 1000

*Tenured

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Source: TheCenter; AU OIRA

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• Comparisons with selected public research universities highlight the challenges for Auburn in advancing its position. As TheCenter has observed, research growth involves a competition for top talent, and over time the resulting dynamics produce a widening gap between the strongest participants and the others. Large regional research institutions such as Georgia Tech, Texas A&M, and UGA perform two to four times as much federally funded research as AU, have between ten and 30 National Academy members on their faculty, and award two to three times as many Ph.D.s. Their endowment assets range from two to 16 times the size of Auburn’s. Charts 33, 34, 35, and 36

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Federal Research Expenditures

AU versus Selected Institutions – 2003

$ Millions

Chart 33

204

177

94

63

45

26

GA Tech

Texas A&M

UGA

Clemson

AU

U of A

Source: TheCenter, 2005

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National Academy Members

AU versus Selected Institutions – 2004

Chart 34

30

20

10

1

0

0

GA Tech

Texas A&M

UGA

Clemson

AU

U of A

Note: Includes National Academy of Sciences, National Academy of Engineering, and the Institute of Medicine

Source: TheCenter, 2005

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Ph.D.s Awarded

AU versus Selected Institutions – 2004

Chart 35

515

404

311

161

158

113

GA Tech

Texas A&M

UGA

Clemson

AU

U of A

Source: TheCenter, 2005

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Endowment Assets

AU versus Selected Institutions – 2003

$ Millions

Chart 36

4,623

1,118

475

392

265

269

GA Tech

Texas A&M

UGA

Clemson

AU

U of A

Source: TheCenter, 2005

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• Even while performing at multiples of Auburn’s scale in their research enterprises, impressive regional institutions like Georgia Tech and Texas A&M are not among the national research leaders as measured by TheCenter. Texas A&M is ranked among the top 25 American Research Universities on only three of TheCenter’s nine measures, and among the next 25 universities on another three measures. Georgia Tech is ranked among the top 26-50 American Research Universities on seven of TheCenter’s nine measures; UGA on only two

• AU is somewhat more dependent on state research funds than many other institutions

• In a few research areas – including several engineering fields and agricultural sciences –AU has much higher shares of federal R&D funding than its overall share across all fields combined. Chart 37

- AU’s funding share in these selected areas is several times its overall share

- Such funding levels can form the basis for building a nationally competitive position in

carefully selected areas of concentration

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Auburn’s Federal Research Funding as a Percentage Share of

Total Federal R&D Dollars – Four-Year Average – 2000 to 2003

Chart 37

1.38%

0.89%

0.79%

0.50%

0.49%

AU’s Overall R&D Share (%)

0.19%

Overall R&D

All Engineering

Civil Eng.

Chem. Eng.

Mech. Eng.

Agricultural Science

$ Millions

39.8

15

2.5

1.8

2.2

9

Source: NSF; AU OIRA

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3. Extension

Alabama Cooperative Extension System (ACES)

OVERVIEW

Auburn and Alabama A&M, together with Tuskegee University, cooperate under the ACES to provide a wide variety of extension services to Alabamians through county offices across the state

The Extension System’s mission is “to deliver research-based educational programs that enable people to improve their quality of life and economic well-being”

PROGRAM AREAS AND STAFF

Extension has six overarching program areas:

• 4-H and Youth Development

• Agriculture

• Forestry and Natural Resources

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Source: Annual Report and Highlights on ACES website; AU OIRA

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• Urban Affairs and New Non-traditional Programs

• Family and Individual Well-Being

• Community and Economic Development

Recent initiatives include Hurricane Katrina recovery efforts, insect-pest management, outreach to the Hispanic / Latino population, nutrition education to food-stamp recipients, training for food safety at school, and a waste-oil pilot for poultry farming. Many ACES initiatives cut across several of the program areas

AU has 429 full-time and 146 part-time employees dedicated to ACES. The full-time staff represents about ten percent of Auburn’s total number of employees. Almost all ACES employees at Auburn are non-faculty, categorized as “other professional,” secretarial / clerical, or technical

FINANCES

Total 2005 revenue for ACES was $49.1 million. This represented a decrease of some $2.6 million from 2004

Source: Annual Report and Highlights on ACES website; AU OIRA; AU Comprehensive Annual Financial Report, 2005

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The leading sources of ACES operating revenues are federal appropriations, grants, and

contracts that totaled about $14.8 million in 2005, down 21 percent from 2004

State appropriations (not accounted for as operating revenues) were $28.8 million, an increase of six percent over 2004

Total expenses were $46 million, resulting in a margin of $3 million “increase in net assets” for 2005

ACES unrestricted net assets were $9.9 million at September 30, 2005

Source: Annual Report and Highlights on ACES website; AU OIRA; AU Comprehensive Annual Financial Report, 2005

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