Lexington, KY - Business experts agree that Kentucky's economy can't percolate unless it hatches and nurtures science and technology-related companies that compete nationally and globally. That's the mission of the Kentucky Science and Technology Corporation (KSTC), a private, independent nonprofit company formed 23 years ago in Lexington.
The Science and Technology Corporation strives to build Kentucky's knowledge-based economy by pulling together resources throughout the state. It attempts to create jobs and wealth for Kentuckians and polish the state's image as an attractive place to do business.
"We're primarily concerned with advancing science, technology and innovation, and we do it in three basic areas," said Kris Kimel, KSTC president and founder.
The first is investing in talent development and human capital in science, math and technology education. The second is research and development where KSTC makes investments and awards grants for projects at universities on a competitive basis. The third area is investing in and working with new and growing innovation-driven companies in Kentucky.
KSTC also manages three funds. The Kentucky Enterprise Fund partners with the Kentucky Cabinet for Economic Development and Department for Commercialization and Innovation to offer seed capital to promising science and technology start-ups. Kentucky New Energy Ventures tries to grow alternative fuel and renewal energy companies here, and the Rural Innovation Fund assists rural companies with the development and commercialization of technology.
"We supply some small grants, under $30,000," explained Kimel, "but the majority of our activity is in investments where we investigate, do due diligence and take equity positions with promising new Kentucky technology companies."
An example of a KSTC-supported company that demonstrates how research can trigger commercialization is Potentia Pharmaceuticals, a business founded in Boston and moved to Louisville in 2003. Potentia invented a drug that might effectively treat age-related macular degeneration, the leading cause of blindness. Potentia has sold rights to the drug to Alcon, the largest eye-care company in the world.
"The drug is an eye drop that has done well in initial clinical trials," said Matt McGarvey, vice president, commercialization and venture finance, for KSTC.
"A great deal of research was done here in Kentucky," continued McGarvey. "This is the only known solution for this eye problem other than surgery and needle therapy. This is not only a great return for Kentucky; it could affect people's lives all over the world in a very positive way."
Some observers believe that, if approved and distributed worldwide, this product could be worth hundreds of millions of dollars to Potentia. Alcon even has an option to buy the company.
Kimel said the Kentucky Science and Technology Corporation's core competency is pushing the envelope in innovation, education, research and development, and entrepreneurship. For example, it might surprise some to learn that Kentucky is heading to space.
"We created KentuckySpace, which is involved in designing and developing small spacecraft and hardware for space research," said Kimel.
KentuckySpace is a non-profit enterprise involving a consortium of universities and private organizations.
"We're getting ready in March to fly our first space hardware on the Space Shuttle to the International Space Station," Kimel said. "We have designed and developed a new platform with a company called NanoRacks."
KSTC also created the international IdeaFestival, which started in Lexington and is now in Louisville. Founded in 2000, IdeaFestival attracts leading
and highly diverse
thinkers
from across the nation and around the globe to explore and celebrate innovation, imagination
and cutting-edge ideas, according to IF's promotional material. The 2010 Festival will be held from September 29 to October 2.
The economy may still be in a downward spiral, but Kimel sees opportunities everywhere.
"Actually, prices for buying some companies are reduced or depressed so it's a good time to invest. I think economic upheaval is when a lot of dynamic innovation can occur," Kimel said. "We're not backing away; we're being aggressive and ambitious with our investment activities. We made a pretty robust round of investments last year."
KSTC also manages 13 "business accelerators" around the state, including one in Lexington.
"We have commercialization experts like engineers and entrepreneurs at the accelerators," said Kimel. "They work with technology companies coming out of the universities and get them prepared to raise capital and to use funding from us. We all work together as a team. Once we put equity into a company, we assign an executive in residence to work with them to solve problems and fill in gaps. It's designed to maximize the return to the state."
So what does Kimel say to potential investors about Kentucky, a state some say hasn't been very progressive over its long history?
"I think Kentucky is a viable place for investment. There is a lot of interesting, new technology being developed here. Kentucky has some strong companies and new ideas. But, we don't have nearly as many as we should," Kimel said.
Kimel and McGarvey believe creative thinking can be found anywhere, so why not Kentucky?
"You invest where the good ideas are," Kimel said, "whether it's Kentucky, California or Bangalore, India."