Innovation is a significant driver of Kentucky’s current economic success, including the state’s significant investments in electric-vehicle manufacturing, agriculture technology, metals innovation and more. These growing industries are built on the same three pillars seen in every innovative business: research-driven products and/or services, access to capital and talent.
The Kentucky Science and Technology Corporation (KSTC), a private nonprofit, is committed to advancing Kentucky’s innovation-driven economy through these same principles.
“Working closely with KY Innovation, we focus KSTC’s initiatives on research-driven products, access to capital and talent development because we’ve seen how these pillars drive success for entrepreneurs. Now we’re seeing these areas drive economic growth for the state as well,” said KSTC President Terry Samuel.
Research-driven products and services
Successful businesses offer a product or service that serves a market, but those making major contributions to Kentucky’s economy are based in scientific research. Entrepreneurs and innovators are answering some of Kentucky’s most challenging questions and meeting public needs with their research-driven innovations.
Programs such as KSTC’s Kentucky Commercialization Ventures (KCV) are helping these innovators turn their ideas into products on the market. Working closely with the University of Kentucky and the University of Louisville, KCV partners with Kentucky’s public higher education institutions to commercialize their research. Since launching in 2020, the team facilitated the first-ever patent application from a Kentucky community college and the first income from a KCV-supported license agreement at Eastern Kentucky University.
The Kentucky Science and Engineering Foundation is helping companies take their big ideas even further through federal research grants. The team offers accelerators, one-on-one consultations and small grants to help innovators submit competitive applications to secure non-dilutive R&D funding available through America’s Seed Fund (SBIR/STTR programs). Their microAward grants offset expenses related to submitting a competitive proposal and reduce barriers to securing funding.
When business ideas are solidified, the Kentucky Intellectual Property Alliance brings together a community of researchers, entrepreneurs and IP professionals to assist Kentucky companies in protecting their ideas and raising awareness regarding the importance of intellectual property.
Access to capital
Capital is required to expand the reach of these products, but access to capital can be difficult — especially for early-stage founders. Kentucky is contributing to founders’ ability to scale with early-stage investments. In the 2022 fiscal year, KSTC’s rebranded investment arm — Keyhorse Capital — invested $4.68 million in Kentucky companies through the Kentucky Enterprise Fund with an increased emphasis on rural founders. In over two decades of investing, the firm has generated over $1.5 billion in follow-on capital.
"We’ve worked hard as investors to meet founders where they are and evolve with them,” said Keyhorse Capital Managing Partner Kelby Price. “Financing needs to be more accessible to move faster, build more impactful businesses, provide high-skill jobs and grow our economy.”
The Kentucky Procurement Technical Assistance Center provides no-cost consulting, training and guidance with certifications to help established businesses grow their revenue by winning federal, state and local government contracts. They’re increasing access to business growth for Kentucky companies through partnerships such as the Construction Diversity Accelerator they launched in 2022 with Turner Construction and the University of Kentucky.
Talent development
Workforce competition is fierce, and businesses cannot scale without strong talent. Creative approaches are required to develop, attract and retain a skilled workforce. Each KSTC program builds talent through training and mentoring, though two initiatives focus on building Kentucky’s talent pipeline. AdvanceKentucky works with school districts to build capacity for K-12 students to pursue STEM careers through programs in math, science, English and computer science. These programs provide professional development, mentoring and student recruitment to increase enrollment and success in STEM classrooms.
KSTC launched a new initiative in November to recruit service members and their spouses to open positions with Kentucky employers. KY VALOR builds upon 44 pathways KSTC established in Kentucky that give service members credit for their military experience when pursuing licensed occupations. The program expects to attract 1,200 transitioning service members and spouses from across the nation to fill gaps in Kentucky’s workforce.
A challenge for KSTC, and all public/private programs, is to connect to entrepreneurs across the Commonwealth. Working with KY Innovation, KSTC facilitates the state’s six regional Innovation Hubs. This network helps entrepreneurs find and connect with the right resources at each stage of a company’s growth. In fiscal year 2022, the hubs provided over 4,000 one-on-one consultations and made over 2,000 connections for Kentucky entrepreneurs.
Continued investment in research, expanding access to capital and building Kentucky’s talent pipeline will keep the state’s economic momentum moving forward in 2023 and beyond. KSTC is in a unique position through its existing programs to leverage all three of these pillars to strategically advance science and technology throughout the state, setting Kentucky’s innovation ecosystem up for success in the years ahead.
Visit kstc.com to learn how you can support Kentucky’s innovation-driven economy and become a part of our growing innovation ecosystem.
KSTC is a private, statewide nonprofit corporation committed to advancing science, technology, and innovative economic development founded on Kentucky know-how. KSTC seeks to improve the capacity of people, companies, and organizations to build an innovation-driven economy in Kentucky. Learn more at kstc.com.
