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.
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.