Some may also call it “fascism.” Some may call it good ol’ fashioned cronyism. Anyway, right now in Raleigh it’s known as NCInnovation. And what is it all about? :
NCInnovation is a relatively new nonprofit with some very high-profile connections. Formed in 2020 with the backing of former Truist Bank CEO Kelly King, the organization has thus far raised $23 million in private donations from many of the state’s largest private corporations, including Bank of America, Truist, Wells Fargo, Duke Energy, Blue Cross Blue Shield NC and Martin Marietta. Its board includes multiple North Carolina CEOs and university chancellors, while its model has been lauded by the likes of JPMorgan Chase CEO Jamie Diamond. To help achieve its goals, the organization employs nine registered lobbyists in the state.
What are those goals?NCInnovation aspires to create a massive endowment to help researchers at UNC System schools convert their ideas into revenue-generating businesses. To make this a reality, the group asked the state for $2.5 billion over 10 years.[…]
That’s right. BILLION with a “B.”
[…] In May, the Republican-controlled state Senate proposed using much of North Carolina’s current revenue surplus to give NCInnovation a one-time payment of $1.425 billion, representing almost 5% of the chamber’s entire budget. It’s the largest single spending item designated to a nonstate entity in North Carolina history, according to the state’s office of budget and management.
In contrast, the budgets proposed by Democrat Gov. Roy Cooper and the GOP-controlled House each only provide the nonprofit with $50 million.This smaller amount is not nearly enough, says NCInnovation CEO and President J. Bennet Waters. “We’re attracting companies like Apple and Google and Toyota and VinFast,” he told The News & Observer, noting the recent influx of major employers from out of state. “Then why are we 20th in commercializing our own innovation?” Waters was referring to a December 2021 study by the North Carolina Office of Science, Technology & Innovation, which ranked the state near the middle of the pack nationally by innovation metrics.
Is NCInnovation the key to reversing this middling performance? Waters says yes. With a veto-proof majority, House and Senate Republicans will settle this sizable spending divide in their final budget. As they negotiate the future of NCInnovation, here’s what to know about the ambitious nonprofit.
WHO IS BEHIND THE PUSH FOR NCINNOVATION?
Kelly King, former CEO and Chairman of Truist Bank in Charlotte, serves as board chair. The vice-chair is Kirk Bradley, CEO of Lee-Moore Capital Company, a real estate firm in Sanford. The rest of the board is a mix of business and academic leaders, including UNC System President Peter Hans and the chancellors of UNC Charlotte, North Carolina A&T University, Western Carolina University, and East Carolina University.
Prior to NCInnovation, Bennet Waters was an executive at several health care companies, including the Burlington-based LabCorp. From 2005 to 2009, he served in the U.S. Department of Homeland Security, later working for a consulting firm founded by former Homeland Security Secretary Michael Chertoff.
WHO WOULD GET TO LEAD NCINNOVATION? Under the Senate’s plan, the NCInnovation board will have 13 voting members, eight of them to be appointed by the North Carolina General Assembly — four by each chamber. The remaining five members would be determined by NCInnovation. Each would serve a four-year term.
HOW MANY UNC SYSTEM SCHOOLS ARE THERE?North Carolina has 16 public universities and 58 community colleges.
WHAT WOULD NCINNOVATION DO AT THESE SCHOOLS? NCInnovation would identify which UNC System research and development projects would receive state support. The Senate bill tasks the nonprofit with affording recipients “long-term entrepreneurial capacity” and “follow-on financing” opportunities. Under the bill, recipients must pledge to continue operating in North Carolina for at least five years. “We’re talking about intellectual property that the state has already invested in at some level,” Waters said. “The research has been conducted by essentially state employees, faculty members and researchers at our universities. They’re developing this IP in state-owned buildings.” […]
Government leaders picking winners and losers in private business. Government leaders using funding as leverage to obtain and maintain “partnerships” and partial ownership of innovations developed on college campuses.
Government sinking its teeth and claws deeper into private enterprise? *What could be worrisome about that?*
[…] The bill highlights the role NCInnocation could play in rural economic development. On its website, the nonprofit has posted job openings for regional directors at UNC-Charlotte, N.C. A&T, East Carolina, and Western Carolina.
WHO WOULD HOLD NCINNOVATION ACCOUNTABLE? In the Senate bill, NCInnovation must report annually to the Joint Legislative Commission on Governmental Operations, which is chaired by House Speaker Tim Moore and Senate President Pro Tempore Phil Berger, as well as the state’s nonpartisan Fiscal Research Division.[…]
Seriously? With Tim Moore’s recent history, we’re supposed to count on him to provide “accountability”?
[…] ARE CONSERVATIVES UNITED ON THE PROPOSAL? No. On June 9, the right-leaning think tank John Locke Foundation labeled the Senate’s NCInnovation plan as government overreach. “By providing such a significant amount of funding, the government is picking winners and losers in the technology sector, which can create market distortions and stifle true innovation,” read an online post coauthored by John Locke President Donald Bryson. Sen. Jim Perry, a Kinston Republican, also criticized NCInnovation for how its funding mechanisms have shifted in recent years. Writing on Twitter, Perry said, “I’ve lived the Private Equity world. If an organization changed their business model multiple times in the middle of the road show, I would’ve called that a big red flag.”[…]
The John Locke crowd rarely comes out against what the Raleigh establishment wants. So, this must really stink worse than we thought. Anybody else having flashbacks to the Global TransPark fiasco?
I’m told that this thing does not have the votes to pass Jones Street. But we still need to make sure our “honorables” are aware that we really really really really want it to die and stay dead.
I’ve said it before and I’ll say it again: Government does its best economic stimulation by knocking down barriers and getting the hell out of the way.