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Thursday, July 18, 2024

Kelly King-led effort seeks $50M in state funding to launch innovation effort

North Carolina lawmakers and Gov. Roy Cooper have  proposed that the state give $50 million to a business-led nonprofit that wants to set up regional hubs to promote the commercialization of university research and know-how.

The money would go to NCInnovation Inc., which contends that the state’s tech-transfer efforts are falling behind and need a refresh. “RTP isn’t the end,” its pitch book says, referring to the world-famous business park in Durham and Wake counties. “It’s just the beginning.”

“Innovation defines North Carolina’s past, from our research universities to RTP,” said Kelly King, the retired BB&T/Truist CEO who chairs NCInnovation’s board. “But if we’re to compete and win in the future, then what we’ve built so far must be only the beginning. NCInnovation’s model — grounded in data and led by some of the top names in industry, academia and finance — offers a roadmap to make North Carolina ‘The Innovation State.’”

King and other project leaders started conceiving NCInnovation in 2018. A nonprofit was organized two years later, followed by a consultant’s study and a decision to create a statewide group. Since 2021, the group has undertaken market research, formed a board and raised $20 million from 11 major banks, Duke Energy, Blue Cross Blue Shield of North Carolina and other  businesses including Capitol Broadcasting, Flow Automotive and Martin Marietta.

The organization has hired a CEO: Bennet Waters, a former professor in UNC Chapel Hill’s Gillings School of Global Public Health.  From 2015-21, he worked for The Chertoff Group, a Washington, D.C.-based global security consulting firm. The chief strategy officer is Jeff Sural, who led the state’s broadband initiative in the N.C. Department of Information Technology from 2015-2021.

The next phase of the initiative would be to advocate for “at least a $250 million annual public commitment over a minimum of 10 years, or $2.5 billion total, supplemented with private resources” to building on existing strengths in agricultural technology, biohealth, defense innovation, power electronics and cloud computing.

The group is working on potential hubs and is in talks with leaders of four universities — UNC Charlotte, East Carolina, N.C. A&T State and Western Carolina — and the UNC System.

NCInnovation notes that the Triangle’s Research 1 universities — Duke, UNC Chapel Hill and N.C. State — account for almost 87% of the state’s academic R&D effort. With other regions left out, North Carolina has “some of the poorest economic mobility in the country,” and half its counties lost population between 2010 and 2020.

Research 1 is a designation by the Carnegie Classification of Institutions of Higher Education reflecting universities with the most high-level research activity. Leaders at UNC Charlotte and A&T have emphasized their desire to gain Research 1 status in coming years, which requires additional public and private financing.

What’s needed, NCInnovation says, is a broader set of regional hubs that can link researchers throughout the state with mentors and funding needed to start and sustain new businesses. There’s also a need for more venture capital, and access to experienced C-suite-level executives who can help “infuse real-world business acumen into university research commercialization efforts.”

Cooper’s request and the N.C. House budget proposal released Wednesday disagree on timing. Cooper favors allotting the money in fiscal 2023-24; the House would wait until fiscal 2024-25, and give NCInnovation a Jan. 1 deadline for providing a plan of action.

The release of the money would follow once the governor certifies the plan.

King leads a six-member board — seven before the death on March 24 of former GlaxoWellcome CEO Bob Ingram — that is expected to eventually expand to 36 members, half from the private sector and half from the public sector. Other members are real-estate developer Kirk Bradley of Chapel Hill; retired Wells Fargo banker Stan Kelly of Winston-Salem; former Waste Industries CEO Ven Poole of Raleigh; biotech executive Neal Fowler of Raleigh and Kelly Fuller, a public policy consultant who previously led the NC Chamber Foundation.

King, who lived in a rural Wake County home without electric service early in his life, was part of a management team that built BB&T into one of the nation’s strongest regional banks. In 2019, it merged with Atlanta-based SunTrust Banks to create Truist, which ranks as the seventh-largest U.S. bank.

The House budget bill asks for more specifics about NCInnovation’s plans, including “a breakdown showing that all State funds will go to a constitutionally permissible public purpose.” It also seeks a comparison of the proposal to a more university-centric alternative that also incentivizes “the private sector to provide venture capital funds through tax benefits” or other means.

Officials are also talking with N.C. Senate leaders, who are preparing a budget expected to be released in the next few weeks.

 

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