Kentucky Innovation Act
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Transcript of Kentucky Innovation Act
Board of DirectorsCenter for Renewable Energy Research &
Environmental Stewardship (CRERES)
Presentation March 30, 2010
Presented by
Deborah L. ClaytonCommissioner
Dept. of Commercialization & Innovation
Kentucky Innovation Act
House Bill 572 – 2000 KY General Assembly
• Promote applied research in postsecondary institutions• Encourage business innovation• Attract high-tech enterprises to Kentucky• Advance higher-order skills of an educated workforce• Establish Department of Commercialization and
Innovation (DCI), Cabinet for Economic Development• Innovation and Commercialization Center Program
Facilitating a New Economy
Knowledge Creation
(Innovation)
Business Growth & Wealth Creation
Business & Job Creation Commercialization
RevenueInvestment
DCI Overall Role
Help inventors/entrepreneurs commercialize technology
Attract and retain highly educated people (Kentuckians and others)
Generating higher salaried jobs
Help Kentucky attract high-tech entrepreneurs and businesses
Technology Focus Areas
Five technology “focus” areas:
• Human Health and Development• Information Technology and Communications• Biosciences• Energy and Environmental technologies• Materials Science and Advanced Manufacturing
(Nanoscience and nanotechnology are cross-cutting)
DCI-Managed Funding
High-Tech Pools
DCI manages high-tech pool funds:
Used for projects that create high-tech jobs and knowledge-based companies with the goal of creating clusters of innovation-driven industries in Kentucky.
The commissioner recommends funding of companies to Kentucky Economic Development Finance Authority (KEDFA) for approval.
DCI-Managed Funding
Active / Monitored Companies: 40Total Awarded: $15,429,528Projected High-tech Jobs: 871 Average Salary: $64,004Average Investment Per Job: $17,714Projected annual payroll: $ 55,7470,746 Projected annual payroll tax revenue: $ 3,344,865Years to recover investment per job: 4.6
High-Tech Pool Cumulative Jobs Created 2006-2010
Projected Jobs
DCI-Funded Programs
Innovation and Commercialization Center Program
The Innovation and Commercialization Center Program is authorized by KRS 154.12-305 for the purposes of creating “… products, new companies, and value-added jobs in communities throughout the Commonwealth.”
DCI-Funded Programs
Innovation & Commercialization Center Program
Supports start-up and existing high-tech companies through the concept and development phases, including: • Market research• Prototype development• Business plan and strategies development • Grant and contract capabilities• Capital and management resource identification
Program managed by DCI and administered under contract to DCI by the Kentucky Science& Technology Corporation.
DCI-Funded ICC-IC Program
Innovation and Commercialization Center Program Results
Activity FY2007 FY2008 FY2009 FY2007-2009 Total
New Companies Created 138 120 142 400
Sales Revenues Generated $192M $317M $504M $1.013B
Private Investments in Client Companies $73M $79M $49M $201M
High-Tech Jobs Created 447 426 400 1,273
Low-Tech Jobs Created 275 365 260 900
All Jobs Created (Low- and High-Tech) 722 791 660 2,173
Avg. Salary of High-Tech Jobs $65,346 $65,655 $64,928 $65,318
Avg. Salary of Low-Tech Jobs $29,628 $28,729 $27,905 $28,766
Avg. Salary of All Jobs $56,320 $48,370 $48,750 $51,127
KY Investment / Job (Low- and High-Tech) $3,125 $2,852 $3,251 $3,508
State Payroll Tax Revenue from All Jobs $2,439,782 $2,295,640 $1,693,580 $6,429,002
Kentucky achieves positive ROI in under 16 months based on FY2009 DCI investment in program of $2,194,500 and annual payroll tax revenue of $1,693,580.
DCI-Funded Programs
Commonwealth Seed Capital, LLC
The Kentucky Economic Development Partnership Board established Commonwealth Seed Capital, LLC, to invest state funds in support of seed-stage technology companies in Kentucky.
CSC primarily participates in seed-stage investment rounds alongside other angel, seed and venture capital investors (who serve as the lead investors)
Typical investment size is up to $250,000 per round. CSC also invests differing amounts in other angel, seed or venture capital funds
Company must have the majority of its assets in Kentucky
DCI-Funded Programs
Commonwealth Seed Capital results
Since June 2001:
• Direct investments have been made in 14 seed-stage companies
• There have been 8 fund-of-fund investment commitments
• Over 250 high-tech, high-wage jobs have been created
DCI Initiatives
Kentucky Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Matching Funds Program
Kentucky offers nation’s only SBIR-STTR program that provides matching funds for both:
• Phase 1 awards (matched up to $100,000)• Phase 2 awards (matched up to $500,000) for up to 2 years
Limited to Kentucky-based companies. Out-of-state companies can qualify if they relocate to Kentucky within 60 days. Companies must maintain their Kentucky-based status for a minimum of five years. ICC Director must provide letter with application.
DCI-Managed FundingSBIR-STTR Matching Funds Program
Through five rounds of funding: • 80 awards to 46 high-tech companies • Over $17.7 million awarded• Over $30 million in federal funds leveraged• 8 high-tech firms moved here for program:
Relocated to Kentucky From
Advanced Dynamics UT
Transposagen Biopharma PA
NeoCytex Biopharma FL
Turbo Wheelchairs SC
Bexion Pharmaceuticals OH
3H Company VA
ATI WV
Louisville Bioscience OR
DCI Initiatives
Annual BIO International Conference
Since 2005 . . .
Original state tradeshow booth replaced with custom-designed State Pavilion featuring individual stations and graphics for exhibitors.
1,600 sq. ft. space has 8X the usable space of 2005 booth.
THEN
NOW
DCI Initiatives
Kentucky New Energy Ventures Fund
DCI manages $5 million in public funds for investment in promising renewable and alternative energy companies in the commonwealth
Created under “Kentucky Alternative Fuel and Renewable Energy Fund Program” to support companies developing alternative fuel and/or renewable energy technologies. Part of the $100 million Kentucky Energy Independence Act.
The fund provides either:
(A) one-time grants of $30,000
OR
(B) larger equity investments, which have ranged from $250,000 - $750,000
Must be matched dollar-for-dollar by the company
DCI-Managed Funding
Kentucky New Energy Ventures Fund
25 Kentucky companies awarded over $2.85 million
Leveraged over $9 million in private investment by the awardees
14 companies are developing biofuels technologies 4 “ “ “ wind energy technologies 1 “ “ “ clean coal technologies 2 “ “ “ solar technologies 2 “ “ “ alternative energy 2 “ “ “ natural gas technologies
17 of 25 awards went to rural counties (outside of Fayette and Jefferson counties)
Integrating Efforts
Education
Economic Development
Workforce
DCI
DCI funds and otherwise supports efforts by Kentucky education and workforce
development agencies
DCI Initiatives
Business Plan/Concept CompetitionOne of the nation’s top state-sponsored business plan competitions with $100,000 in available prizes and awards.
Third competition to be held April 16-17, 2010.
Up to 32 teams compete from Kentucky’s public universities.
DCI Initiatives
Examples of Winning Business Plan Competition Teams
Partum GroupCompleted the first round of clinical studies on patented medical device in 2009
Packstream Has started acquiring customers for its system that prints personalized ads on retailers’ shipping packages.
Audio EyezHandheld device and mapping system to assist vision-impaired persons in public spaces
Fenix GroupProprietary nodule detection software enables spotting lung cancer from scans 3-6 months sooner
DCI Initiatives
Kentucky Dataseam
PARTNERS: Cabinet for Economic Development, James Graham Brown Cancer Center, Apple Computer, and the University of Louisville
Has placed over 10,000 computers in school districts in Kentucky.
14 research teams have used idle capacity of student computers to investigate over 100 cancer targets.
Has reduced data processing jobs that used to take 50 years of CPU time down to 20 days to speed up drug discovery research efforts.
DCI Supports Other InitiativesNational Governor’s Association Policy AcademyKentucky worked with nationally recognized experts to
identify economic policies to improve our economic competitiveness in the global economy.
WIRED I-65 Corridor GrantInitiative to unify 19 Kentucky counties and Louisville along
the I-65 corridor as a single economic region to address work-force development efforts.
Idea FestivalUnique event attracts world’s leading-edge thinkers
Kentucky BioAllianceDCI created Kentucky’s state biotech advocacy organization
DCI Supports Other Initiatives
E-Health Network BoardDCI heads Economic Development Subcommittee
STEM Education WorkgroupDCI is co-chair as state implements Project Lead the Way
Broadband Recovery Act CommitteePreviously funded ConnectKentucky broadband roll-out
Signs of ProgressReport: “2008 State New Economy Index” KY 2008 Rank (2007 rank)
IT jobs in non-IT industries 33rd (42 in 2002) (up 9 places; 3rd fastest rate of increase in nation)
Globalization 9th (10) (amount of exports and workers employed by foreign cos.)
Entrepreneurs starting new businesses 25th (42) (up 17 places; 4th fastest rate of increase in nation)
e-Government 2nd (11) (allowing people to go online to access gov’t services)Foreign direct investment 9th (12)
(investing in new U.S. facilities employing U.S. workers)Patents 39th (43)Venture Capital 22nd (36)Innovation Capacity 43rd (47)
(Combines high-tech jobs, patents, R&D $, VC $, etc.)
Source: Kauffman / ITIFNovember 2008 (most recent)