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Building a Business Led, Building a Business Led, Dynamic Economy:Dynamic Economy:
The San Diego ExperienceThe San Diego Experience
Mary Lindenstein WalshokAssociate Vice Chancellor, Public ProgramsDean, University ExtensionUniversity of California, San Diego
BelfastJune 2010
The Goals of Today’s Presentation
• Contribute to your conversation about regional economic transformation
• Share the story of a community, San Diego, California, which has diversified its economic base over the last three decades
• Explore parallels and differences with Northern Ireland• Probe what needs to occur in Northern Ireland to
accelerate economic diversification, especially through technology and entrepreneurship
San Diego in the 1950s and 1960s
• In the 1960s San Diego was identified by Time magazine as America’s “bust” (failed) city
• Local economy dominated by declining defense manufacturing, tourism and real estate speculation
• A number of brand new research institutions and a start-up university
• No major corporations or family wealth but small, primarily local businesses
• A long tradition of failed entrepreneurial and economic development efforts
San Diego in 2010
SAN DIEGO IS A HUB OF DIVERSE TECHNOLOGY COMPANIES
• 300 defense and security companies
• > 1,000 wireless communications and software companies, anchored by Qualcomm
• > 600 life science companies, anchored by Biogen Idec, Gen-Probe and Life Technologies
• 250 energy and environmental companies
• 600 action sports companies
IT/Wireless/Software
LinkabitLinkabit
Linkabit was founded by UC San Diego professor Irwin M. Jacobs in 1968 as the first high-tech communications company in San Diego.
Peter Preuss developed his first software package in 1969 and founded ISSCO in 1970.
ISSCOISSCO
QualcommQualcomm
NokiaNokiaLeapLeap
KyoceraKyocera
LG ElectronicsLG Electronics
BroadcomBroadcom
IT/Wireless/Software
LinkabitLinkabit
Linkabit was founded by UC San Diego professor Irwin M. Jacobs in 1968 as the first high-tech communications company in San Diego.
Peter Preuss developed his first software package in 1969 and founded ISSCO in 1970.
Today there are more than 1000 IT, wireless and software companies operating in San Diego.
ISSCOISSCO
Life Sciences
Hybritech was founded in 1978 by UC San Diego professors Ivor Royston and Howard Birndorf as the first “biotech” company in San Diego.
HybritechHybritech
PfizerPfizer LillyLillyNovartisNovartis
CelgeneCelgene
Life Sciences
Johnson & JohnsonJohnson & Johnson
Life TechnologiesLife Technologies
Hybritech was founded in 1978 by UC San Diego professors Ivor Royston and Howard Birndorf as the first “biotech” company in San Diego.
Today there are more than 600 life science companies operating in San Diego.
HybritechHybritech
Energy & Environment
General AtomicsGeneral Atomics
General Atomics was founded in 1955 as San Diego’s first R&D energy company by General Dynamics.
Sapphire EnergySapphire Energy
Synthetic GenomicsSynthetic Genomics
Energy & Environment
SDG&ESDG&E
General Atomics was founded in 1955 as San Diego’s first R&D Energy Company by General Dynamics.
Today there are more than 250 energy and environmental companies operating in San Diego.
General AtomicsGeneral Atomics
Action & Sports
Gordon & SmithGordon & Smith
San Diego’s action sports industry traces back to the founding of Gordon and Smith Surfboards in 1959.
Action & Sports
HollingsworthHollingsworth
BillabongBillabong
EkstromEkstrom
Dean Cleary SurfboardsDean Cleary SurfboardsHurleyHurley
Mike Hynson SurfboardsMike Hynson Surfboards
Underwater KineticsUnderwater Kinetics
Callaway GolfCallaway Golf
Gordon & SmithGordon & Smith
San Diego’s action sports industry traces back to the founding of Gordon and Smith Surfboards in 1959.
Today there are more than 600 action and sports related companies operating in San Diego.
Venture Capital Investments in San Diego
Source: Thomson Financial for PWC/NVCA MoneyTree Report
Venture Capital Investments in San Diego, 1978 - 2009 $s Millions of Venture Capital Investments in San Diego by Industry Category, 2009
$457
$150
$143
$72
$30 $20$10 $18
Biotechnology
Medical Devices & Equipment
Industrial/Energy
Software
Consumer Products & Services
Networking & Equipment
IT Services
Other0
50
100
150
200
250
$0
$500
$1,000
$1,500
$2,000
$2,500
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
$s m
illion
s
$s Invested # of Deals
San Diego Patents 2007-2009
Source: US Patent & Trademark Office
San Diego’s History of Business Leadership
• 100 year history of small farms, small companies and entrepreneurs (similar to the Silicon Valley)
• Defense contracting and manufacturing – the region’s largest industry in the 1930s through 1960s
• Focus on R&D after World War II, which resulted in research institutions and a university opening in the region
• Small business leadership prominent in the 1960s, 1970s and 1980s because of no large companies, foundations or direct government investments in the region
San Diego’s History of Business Leadership
• Business leaders created the environment that would incubate and grow… – World class R&D institutions– Lots of small high growth tech companies– Clusters of companies, suppliers and professional services
• Collaboration among people and enterprises to create a new (albeit uncertain) economic future– Providing leadership – Contributing time and money– Sharing contacts and networks
San Diego’s ‘Incubator Without Walls’
• Facilitating the convergence of scientific invention, entrepreneurship, and smart capital
• Access to technology developments in all fields
• Access to diverse forms of financing -- seed, angel, venture, corporate, SBIR, grant/foundation
• Business planning and market intelligence
• Domain, business, and market expertise “know-how” connecting to “know-who”
• Lifelong education and training for professionals
• Building a community with shared tech aspirations and high levels of trust
1985 - 2010
• 230 Members• 30 Programs• ~150 Entrepreneurs-in-
Residence
• 1,800 Volunteers• 330 Events in 2009• 15,000 Attendees• $3 million annual budget• 16 staff
• Mission: to accelerate promising, innovative science into successful businesses
CONNECT Measures of Success
• Springboard Program• Over 1,000 companies assisted since 1993• 118 graduate companies during 2005-2008
– 75% survival rate– 52 graduate companies in 2008– $111.5 million in follow-on capital raised
• 200 companies in the pipeline
• Financial Forums• Companies have raised over $7 billion
• Total jobs created >25,000
What San Diego’s Experience Suggests About Successful Innovation Regions
• Sometimes a blank slate can be a good thing = fewer vested interests, naysayers
• Must have world class R&D
• Business led commercialization initiatives can accelerate new company growth with global reach from day one
• Willingness to invest time, resources, relationships and reputations in uncertain outcomes is important
• Ability to absorb and learn from failure as well as celebrate success is important
• Commitment to growing clusters, not just companies, over the long term is essential
Questions the San Diego Experience Raises for Northern Ireland
• Are there entrenched interests/naysayers who can slow down change?
• Is there a critical mass of R&D output?
• Is there the business leadership to facilitate commercialization and growth of global companies?
• Is there a sufficient number of business and professional community leaders ready to invest time, resources and reputations?
• Are there enabling programs which help create success, learn from failures and build confidence in the region’s long term global competitiveness?