Building a Business Led,
Dynamic Economy:
The San Diego Experience
Mary Lindenstein Walshok
Associate Vice Chancellor, Public Programs
Dean, University Extension
University of California, San Diego
Belfast
June 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
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.
Linkabit
ISSCO
IT/Wireless/Software
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.
Broadcom
Leap
Nokia
Linkabit
Qualcomm
ISSCO
Kyocera
LG Electronics
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.
Hybritech
Life Technologies
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.
Today there are more than
600 life science companies
operating in San Diego.
Johnson & Johnson
Novartis
Pfizer Lilly
Celgene
Hybritech
Energy & Environment
General Atomics was founded
in 1955 as San Diego’s first
R&D energy company by
General Dynamics.
General Atomics
Energy & Environment
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.
Synthetic Genomics
General Atomics
Sapphire Energy
SDG&E
Action & Sports
San Diego’s action sports
industry traces back to the
founding of Gordon and Smith
Surfboards in 1959.
Gordon & Smith
Action & Sports
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.
Callaway Golf
Hollingsworth
Hurley
Billabong
Dean Cleary Surfboards
Ekstrom
Mike Hynson Surfboards
Gordon & Smith
Underwater Kinetics
Venture Capital Investments in San Diego
$s Millions of Venture Capital Investments in
San Diego by Industry Category, 2009
Venture Capital Investments in San Diego, 1978 - 2009
$2,500
250
$30
$2,000
$20 $10 $18
200
$1,500
Biotechnology
Medical Devices& Equipment
150
Industrial/Energy
$1,000
100
Software
$143
$457
Consumer Products& Services
Networking & Equipment
$500
50
IT Services
Other
$s Invested
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985
1984
1983
1982
1981
1980
0
1979
$0
1978
$s millions
$72
$150
# of Deals
Source: Thomson Financial for PWC/NVCA MoneyTree Report
San Diego Patents 2007-2009
1,800
1,559
1,600
1,526
1,468
1,400
1,232
1,346
1,290
1,388
1,342
1,376
1,445
1,363
1,177
1,200
1,000
800
732
743
745
680
689
791
726
629
600
629
691
730
525
400
200
0
Q1
Q2
Q3
Q4
Q1
Q2
2007
Q4
2008
Patent Applications
Source: US Patent & Trademark Office
Q3
Patents Granted
Q1
Q2
Q3
2009
Q4
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’
1985 - 2010
• 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
• Mission: to accelerate promising, innovative science
into successful businesses
• 230 Members
• 30 Programs
• ~150 Entrepreneurs-in-Residence
•
•
•
•
1,800 Volunteers
330 Events in 2009
15,000 Attendees
$3 million annual budget
• 16 staff
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?