Legislation Spurring Innovation in Kentucky
Kentucky has been working hard to entice cutting-edge companies to invest in the state through a variety of incentive programs targeted at fostering innovation.
In 2007, Kentucky attracted nearly $2 billion in business investment and over 13,400 jobs, thanks in part to several initiatives, some of which are aimed at assisting high-tech companies in the state turn ideas into valuable commodities. One such program, Kentucky’s High-Tech Investment Pool, helped three companies in the state launch expansion projects in early 2008. The three beneficiaries of the High-Tech Investment Pool funds are Advanced Genomic Technology, LLC; Conexxus, LLC; and Smoothstone IP Communications Corporation. The companies, all located at the Louisville Innovation and Commercialization Center, are receiving a combined total of up to $891,000. It is estimated that these projects will together create 43 full-time, high-tech jobs for the state.
The High-Tech Investment Pool was created along with the High-Tech Construction Pool during the state’s 2000 legislative session as part of a New Economy initiative. Funds from these programs are administered by the Department of Commercialization and Innovation (DCI) within the Kentucky Cabinet for Economic Development and are used to help high-tech and knowledge-based businesses get started and thrive in the state. Through January 2008, over $111 million has been approved for use in 114 different projects as a result of these programs.
Advanced Genomic Technology, LLC, a biotechnology company that developed a line of microRNA microarrays (MMChips) for the medical diagnostic markets, was granted up to $153,000 to purchase equipment and to help with regulatory and certification costs. The company anticipates creating nine full-time jobs by the end of 2010. Software development company Conexxus, LLC was awarded up to $238,000, which will be used to purchase hardware, software, and other technology, as well as for costs related to securing intellectual property. The company expects that in addition to its existing workforce of four, it will create a minimum of 14 full-time jobs by the close of 2010. The last of the companies to receive this round of awards is Smoothstone IP Communications Corporation, a managed Internet protocol services company. Up to $500,000 of funding is available to the company to help with equipment and infrastructure upgrades. Smoothstone anticipates that, in addition to its current workforce of 73 full-time employees, it will create a minimum of 20 full-time jobs by the end of 2009.
Innovating for Innovation
On top of the High-Tech Investment Pool, Kentucky also uses its SBIR-STTR Matching Funds Program to help support innovation. The only program of its kind in the nation, the SBIR-STTR Matching Funds Program is unique in the sense that it matches both Phase 1 and Phase 2 Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) grants made by the federal government to help companies bring promising new technologies to the marketplace. DCI is managing the program through a contract with the Kentucky Science and Technology Corporation.
Last year, 20 of Kentucky’s high-tech start-ups, from industries as diverse as human health and development, IT and communications, bioscience, energy and environmental technologies, materials science, and advanced manufacturing, were awarded a combined total of $1.9 million through the state’s SBIR-STTR Matching Funds Program.
The announced matching grants range from $69,999 to $100,000 per company for its Phase 1 research, which tests the feasibility of a concept or technology. Kentucky also has started matching federal awards for Phase 2 research and development, during which a company aims to make its technology ready for commercialization. The maximum state match for Phase 2 federal awards is up to $500,000 per year for up to two years. The opportunity for recipients of Phase 1 and Phase 2 federal awards to earn up to $1.1 million in matching funds from Kentucky has drawn attention to the program from high-tech firms in other states that are interested in relocating to Kentucky. Companies eligible for the matching funds must be located in Kentucky or commit to relocating to Kentucky within 60 days, after which they can begin receiving the matching grant. The companies must also agree to remain in Kentucky for at least five years.
“This innovative program is a perfect example of the type of outside-the-box thinking that will enhance and grow Kentucky’s new economy,” says Kentucky Cabinet for Economic Development Secretary John Hindman. “It shows we are committed to supporting our high-tech small businesses as Kentucky moves toward a more knowledge-based, high-tech economy.”
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