DCI, KSTC and $4+ Million: The ICC Program

KSTC holds a contract from DCI for $4,389,000 to manage the state’s Innovation and Commercialization Center program. (ICCs). The ICCs are Kentucky’s version of ‘incubators’ – which economic development literature has typically identified as an often deployed, though questionable approach toward stimulating an “entrepreneurial” economy.

According to KSTC’s website, the “ICCs serve as a comprehensive business accelerator focused on helping Kentucky entrepreneurs perfect their business strategies to build successful technology businesses.“ It poses these questions to would-be entrepreneurs:

• Are you serious about starting a technology-based business?
• Do you have a competitive business that is new and different?
• Does your company have a large market potential? ($25M to $50M)
• Are you open to advice and learning the steps necessary to start a business?
• Are you willing to work hard and take a serious look at your company?

Reasonable questions. Given that the ICC program has been in place since the early part of the decade and has spent many millions of Kentucky’s taxpayer dollars – perhaps we can pose some reasonable questions about the ICC program:

• How many “serious” technology based businesses has the ICC program produced? (We’ll define “serious” as those businesses that no longer require state grant funds to remain a viable business)
• How many new, different and competitive businesses that began in the ICC program are still open? How many employees do they have?
• How many large market companies ($25M to $50M) have grown from the ICC process and remain in Kentucky? How many employees do they have?

Looking a bit more at the contract between KSTC and DCI suggests that it doesn’t contain any performance metrics to measure the effectiveness of their efforts at the end of the two-year period. The contract indicates that there is an MOA between DCI and KSTC but we were not able to find it online. We’d welcome a copy from either KSTC or DCI so we can see if there are performance measures in the MOA. (ky.opportunity.coalition@gmail.com)

Also – it appears as if this contract was not competitively bid. We can only assume that DCI is justifying sole-sourcing this based upon KRS 154.12-310(4):

"The commissioner may, in effectuating the provisions of KRS 154.12-300 to 154.12-310, contract with a science and technology organization as defined in KRS 164.6011 to administer and manage the ICC Program."

The level of funding committed to the program – over $4 million – and no bidding process? Really? Probably conforms to the letter of the law but would a little competition maybe give us a better sense as to whether there are some different ideas as to how to promote entrepreneurship in Kentucky?

Better yet – how many Category 5 Schools could be refurbished for $4 million? We’d imagine that there’s a better chance that an entrepreneur comes from a Kentucky kid going to a decent school facility than underwriting mostly empty incubators.

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NOTE: Giving credit where credit is due. The KSTC contracts were found through the Finance Cabinet’s website. It’s a cumbersome engine to uncover these kinds of things. But it’s a start.