From Innovate LI’s San Diego office… (no, just kidding, we wish). But indeed from San Diego comes a regional innovation saga with surprisingly familiar themes. You might not think it at first blush, but California’s San Diego County and Long Island have lots in common: a crippling 20th century departure by the aerospace industry, a strong university-based innovation pulse, healthy tourism numbers and more. The difference between the two economies is in the timing – Long Island continues to organize its post-aerospace socioeconomic priorities, while San Diego got its act together decades ago. Among those keeping the left-coast County (population 3.43 million) and City of San Diego (pop. 1.4 million) moving forward is Mark Cafferty, president and CEO of the San Diego Regional Economic Development Corp., a privately funded industrial-development group writing new chapters in what Cafferty defines as “an interesting story in diversity” and “definitely a story about clusters.” As he tells it:
Proper introduction: The San Diego Regional Economic Development Corp. is a nonprofit funded by a membership base of about 160 companies and organizations. Though we do receive limited government funds, the vast majority of our ($4.1 million budget) comes from the private sector. This really allows us to focus on economic development instead of politics.
Cluster feeding: Our story has to do with mobilizing around clusters. Our success and failure over the years comes from transforming the region from a one- or two-industry town to something with a more diverse economic base – several thick clusters that have helped us maintain a strong economy, and maybe even weather some of the downturns better than some other regions. San Diego tends to come out of recessions and downturns better than other cities and regions around the country, and diversity is one of the reasons why.
Military salute: The first cluster, of course, is we are one of the largest military installations in the world, and we have large numbers of active U.S. Navy personnel and others working for the government. So, this has always been a defense economy. But thanks to some large investments here, it has become more of a military-technology economy – and that benefits local small businesses and service providers. The San Diego tech industry has thrived around that sector.
Nice place to visit: The second pillar has long been tourism. San Diego is a beautiful place that has long drawn in tourists. But now, there’s more of an outreach to attract both international and national tourists, including a direct effort to attract more international flights.
Flight of fancy: This has been a conscious effort over the last 15 years, but a big turning point for us was about nine years ago, when British Airways returned to San Diego (after canceling a previous route). When it came back, there was a much stronger effort to engage with British Airways and promote San Diego as more of a tourism destination in the UK and Europe.
Come one, come all: This enabled us to attract a San Diego/Tokyo flight that’s been around for about five years now. And this year, because of the success of those two flights, we have a new daily nonstop on Lufthansa. In addition to that, we’ve been able to add more Canada and Mexico flights, which give us connectivity to other international markets. Getting the first one and proving we could be successful was really what has led to these further successful efforts.
Literally inventing a new economy: The third pillar is innovation, and that’s what probably most connects us to Long Island. San Diego had a massive economic downturn when the aerospace industry left here in the 1970s and 1980s. But at the time, there was a conscious effort to retrain all the engineers that had been working on planes and engines and keep them here in other industries where there was potential growth.
Rise of the Tritons: [University of California-San Diego] is only 58 years old now, but at the time it was already growing and becoming more of a hub of academic excellence. They realized they could help cross-train these highly skilled individuals to become professionals in high-wage, high-skill industries like the telecommunications industry and the biotechnology industry.
Mary did it: At the university, a woman named Mary Walshok – still a vice-chancellor to this day – created our region’s first-ever extended-studies program for the sole purpose of retraining and cross-training these workers. She worked very closely with industry and created a one-of-a-kind regional program for cross-training and recredentialing workers. Saying she’s legendary is kind of an understatement.
Connect-ing the dots: In addition to the training, there was a need for people to learn how to run a business and how to attract the right kind of investment to grow those businesses. So, Mary played a key role – with Irwin Jacobs, the founder of Qualcomm, and [late cyber-entrepreneur] Bill Otterson and the UCSD leadership – in creating UCSD Connect, an incubator space to spin out ideas and the means to connect them to people who know how to accelerate business.
Like peas and carrots: The important idea was there’s the workforce training you need to do to retain people for certain industries, and there’s also a certain acceleration of entrepreneurial activity you have to have around those businesses, all centered around innovation.
Cause, and effect: Today, San Diego has all of these important innovation clusters – cybersecurity, sports technology, biotechnology, genomic sciences – and many have grown because of those early investments in talent and entrepreneurship in science and engineering. And they have almost all grown around the university. The university and the other research institutions in the region have played a big role.
Who’s counting: At the Economic Development Corp., we invest time and coordinate collaborative efforts. We’re not an EDC that says, “Hey, a company moved in down the road, that’s 20 jobs!”
Hang together, or…: A lot of people throw around the word “collaboration,” but we tend to believe that we won’t do anything if we don’t work together. We are big enough to matter, but we aren’t big enough to hold our own with New York City or London. So, if we’re going to compete, it’s going to be in a collaborative way.
Final analysis: This has all led to us being an economy that is positioned much better to grow in the current national and international economies, in industries that are more forward-looking, leaning toward science and engineering and medicine and energy. It wasn’t just a lucky investment that led to all that. That was a conscious effort.
Interview by Gregory Zeller