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Dear Member of the University Community:

July 19, 2006

It is my pleasure to provide a first annual report to you. When I arrived, I was the beneficiary of the great leadership that Tom Jackson provided during his 11 years as president. Every school at the University was strengthened during Tom's time.

The College saw extraordinary progress. The Rochester Curriculum, in particular, received national attention for its focus on disciplinary clusters and the freedom students have to study what they love. Tom's leadership helped enhance already outstanding programs in fields as disparate as religion and classics, brain and cognitive science, optics, and physics. The College has had a great tradition in political science and economics, and both of them have shown extraordinary strength in recent years.

The Medical Center is the largest part of the University, with 13,000 employees. Since the formulation of the 1996 Strategic Plan, there has been a doubling of research support for the Medical Center, which has stabilized its national ranking. Under the leadership of CEO Steve Goldstein, Strong Memorial and Highland Hospitals have increased market share from 42 percent to 52 percent in ten years. They have also become models for efficiency in the State of New York. They are increasingly magnets for patients who are from community and primary care facilities throughout Upstate New York.

Our Simon School, under the leadership of Mark Zupan, again ranks among the top 30 business schools in the country, building on a tradition of great scholarship associated with scholars such as Mike Jensen, the late Bill Meckling, Cliff Smith, Ross Watts, Jerry Zimmerman, and Gregg Jarrell.

The Eastman School of Music is a jewel in our crown. It has been recognized periodically by U.S. News as the finest music program in the country, and Eastman continues outstanding performance education and outstanding music scholarship. It is a school whose graduates secure teaching positions throughout the country and participate in some of the finest orchestras in the land.

Our nursing school has had a remarkable period under the leadership of Dean Pat Chiverton. We have seen a school reinvent itself. It has ceased to be a primarily undergraduate nursing school. It now provides an accelerated baccalaureate and graduate nursing education. It is becoming the nation's leader in entrepreneurial nursing.

Our Warner School of Education also was fortified during the period of Tom Jackson's presidency. We saw a school dramatically increase in size and resources under an inspired dean, Raffaella Borasi, who has recently accepted reappointment.

My challenge when I began work on July 1 of last year was to accelerate this progress. I was building on a very strong base. I'm pleased to report that in the past year the wheels have begun to turn. We're just warming up, but it's been a busy and exciting year. I want to give you some sense of what has occurred.

First, a number of outstanding senior leaders have joined the University. In September 2005 Jim Thompson became the new Senior Vice President for Advancement. Jim was my colleague at Washington University in St. Louis. Washington University has had an enviable record in terms of its capital campaigns including an extraordinary campaign that ended on June 30, 2004. Jim has made substantial progress in developing a truly extraordinary senior leadership team.

On March 6, Bill Murphy joined us as Vice President for Communications. Bill led communications efforts at the University of Illinois and Ohio State and held a senior position at the University of Chicago. He has convened working groups that are already addressing our graphic identity, media relations, internal communications, and web presence.

Beginning July 1, we also added a great new Dean of the Faculty of Arts, Sciences and Engineering. Peter Lennie was the founding department chair for Rochester's Department of Brain and Cognitive Sciences. Seven years ago he was importuned by New York University to become its dean of science and did an outstanding job. He was particularly impressive in his ability to work with scholars and academic leaders across the gamut of fields, including the humanities and the social sciences. He has come back to a school that is looking forward to his leadership in the years to come as we move toward the period of strategic planning.

A few days ago, I was delighted to announce that Brad Berk, Chair and Charles E. Dewey Professor of Medicine, will become Senior Vice President for Health Sciences and CEO of the University of Rochester Medical Center on August 1. Brad, who emerged from a comprehensive national search, is an internationally respected scientist, clinician, and administrator with an outstanding record of building and integrating research, teaching and clinical programs. He will take up the strategic planning process already begun, and, I am confident, lead the URMC to new heights.

The first year has been about more than selecting great leaders. We have seen an acceleration of building construction. In universities it is sometimes said that architecture is destiny. Outstanding facilities help draw great scientists and scholars. Universities are built not only idea by idea, but brick by brick.

There have been a lot of bricks assembled at the University of Rochester this past year. On April 28, we dedicated the Loretta Ford Educational Wing of the School of Nursing. This beautiful facility will allow the School of Nursing to increase its student body by 60 percent beginning in the new academic year.

On May 19, we officially broke ground for the James P. Wilmot Cancer Center. The Wilmot Center will help facilitate both better care for patients in the greater Rochester area and progress in the search for cures for cancer. Scientists here participated in the effort that led to the vaccine for the human papilloma virus that has the potential to eradicate cervical cancer within a lifetime.

Within a matter of months we will dedicate the Robert B. Goergen Biomedical Engineering and Optics facility. This builds on two areas of great strength of the University. Our School of Engineering, part of the College of Arts, Sciences, and Engineering, has had an enviable track record in a number of fields. In biomedical engineering, for example, it is already ranked among the 15 leading programs in the country, and we have not yet opened the doors to the new facility. Our Institute of Optics, begun in 1929, remains a national leader. The new facility will allow us to build on the great programs we already have and will amplify our ability to bring in great students, great faculty, and great start up companies to strengthen the local economy.

In the next academic year, the former Wyeth building will house our Cardiovascular Research Institute. More than 120 scientists and technicians, currently located in several buildings on the Medical Center campus, will move there, making it one of the largest centers for heart research in the U.S.

A separate important set of projects this past year has been programmatic.

Shortly after I arrived I called for new strategic plans from each school and program within the University of Rochester. Great universities begin with the capacity to articulate their priorities. They begin with the objective to aim high, and articulate how their aspirations become feasible. Strategic planning will take approximately another year to year and a half to complete, but next year with the senior leadership team in place, each school and program will be presenting a strategic plan first to the Board of Trustees Strategic Planning Advisory Committee chaired by former Board Chair Robert Goergen, and later to our entire Board.

Concomitant with strategic planning is a master facilities plan. We are somewhat unusual among our peer institutions in not having a college town, including contiguous retail establishments and rental housing. I was delighted early in my period here to support the Brooks Landing project, the plans for which include a new hotel, a new office building, and a new restaurant across the pedestrian bridge from the River Campus in the 19th Ward.

There is potential for further development in what we call the Mt. Hope Corridor, the area near Mt. Hope and Elmwood Avenues. The master facilities planning committee chaired by Trustee Roger Friedlander will address more broadly the planning choices for the entire University and will be coordinated with our strategic planning.

We focused this year on tech transfer and commercialization. We are proud that our university today is among the top 10 in the country in the amount of income it receives from patent licensing. But revenues from patents have limited lives. Even with the new papilloma vaccine coming online, we need to continue to grow in this area. We will seek new ways to support appropriate efforts of our scientists and professors to commercialize products to help support the University. Sue Stewart, our general counsel, and Peter Robinson, who wears a number of hats at the University, are co-chairing an effort in which we intend to be one of the best in class in the nation for those efforts.

Lynne Davidson, my deputy, is separately chairing a Task Force on Diversity and Inclusiveness. We are a university that welcomes and supports everyone, faculty, students, and staff, regardless of race, religion, country of origin, sex, sexual orientation or any other factor irrelevant to their work. We are living in a world that is increasingly one in which knowledge knows no boundary. We are educating students for what will be an intensely competitive, multicultural environment, and we want to provide an education that will best prepare our students for this new world.

Let me conclude by giving you a vision of where we're going.

Universities have become increasingly vital to our society in recent decades, and their importance will only increase in the decades to come. Research universities like the University of Rochester are one of the nation's and the world's major sources of new knowledge.

The research university's role has become much more significant in recent decades because of federal and state support and because of the decline of great industrial laboratories, like Bell Labs. Ultimately, we are the source of the most sophisticated education. Our academic freedom has brought us the most remarkable scholars from around the world. Higher education is the most important source of the comparative advantages this country enjoys today.

In the decades to come the research university's role will become more important. The entire United States economy is engaged in a broad transition. Over time we are becoming less and less a manufacturing nation and more and more a knowledge based nation, where fields like biotechnology, biomedicine, infotonics, alternative fuels, and the quality of our intellectual property increasingly are pivotal. As we move toward a knowledge based economy, the role of the university concomitantly will become more important.

The University of Rochester, along with a relatively small number of outstanding research universities, will play a pivotal role in this transition. Our challenge in the years to come at this university is to build on our greatest strength, which is the quality of our academic faculty and programs. We may focus on new and important emerging fields such as nanosystems, alternative fuels, and biomedical engineering. We will continue to provide great support to outstanding fields that run the gamut of not only the hard sciences and engineering, but also the humanities, arts, social sciences, and music.

As we complete our strategic planning, we will analyze whether we should be a somewhat larger university, a university that increasingly will focus on interdisciplinary projects.

In the years to come we are also likely to focus on mechanisms by which we can facilitate further collaboration and interdisciplinary work. I envision a time in which we will be designing aspects of our university that will literally be the equivalent to a university without interior walls. Great science, great engineering, great social science, great humanities do not always package themselves in articulations along the lines of departments, but often involve several departments or involve two or more schools working together.

I anticipate also that our strategic planning will seek to strengthen the ties between the University of Rochester and the community, not merely in terms of contiguous retail and leased property, but also in terms of economic development and social engagement.

One of the greatest pleasures of this year has been to discover the number of ways the University, since long before I arrived on the scene, has played a prominent and supportive role in the community. Many of you appreciate the extent to which, for example, our medical center has reached and provided support in fields ranging from family practice to dental to emergency care throughout the community. Last year, for example, we provided about $28 million of uncompensated care, and that number is likely to grow because it's so important.

We are today the largest employer in Rochester. No single entity will succeed to the position that Kodak filled some decades ago, as the truly dominant corporation in town. But we will be one of a number of social institutions that will work together in partnership with other leading business and government institutions, with faith based organizations and cultural organizations, to build a stronger Rochester. The future of our greater Rochester community is a future that will best be achieved if we work together.

Let me conclude with the simple observation that I've placed on my office desk and probably have quoted more often than any other. I want this University to aim high. We have had a period of a difficult economy in this city. We should not be discouraged. I am convinced that our best days are ahead of us. I'm looking forward to working with the entire University community to build a stronger university and to help build a strong community. You have honored Friederike and me with the opportunity to be part of this university and this community. We are proud that Rochester is now our university and our community, too.