(EDITOR’S NOTE: This is the second in a two-part series on the recent Life Science Tennessee and Nashville Health Care Council delegation visit to San Diego. For more insights into San Diego’s venture funding scene, read a column published in Friday’s San Diego Union-Tribune at http://www.utsandiego.com/news/2013/jan/19/tp-rising-venture-funding-in-sd-defies-trend/?page=1#article-copy.)
When one thinks of technology hot spots, the names that are most frequently cited are Silicon Valley, Boulder, Boston, and Research Triangle Park, to name a few. San Diego is also mentioned, although not as often.
A delegation from Tennessee learned last week how innovative and constantly forward looking the Southern California city is. In less than 24 hours, the delegates who participated in the joint event organized by Life Science Tennessee and the Nashville Health Care Council were exposed to a series of presentations on the convergence of life sciences and healthcare in the San Diego community and a review of a 25-year effort to grow a variety of technologies in the region.
This article is the second in a two-part series and focuses on one of San Diego’s unique programs – CONNECT, a well-established, highly successful and ever-changing initiative.
During my first career with the University of Tennessee, I became familiar with CONNECT through frequent presentations made in the early 1990s by Mary Walshok, the current Associate Vice Chancellor for Public Programs and Dean of Extension at the University of California San Diego (UCSD). Roughly 20 years later, the delegation learned just how successful CONNECT has been in helping build the community’s technology sector.
Duane Roth, Chief Executive Officer (CEO) of CONNECT, told the delegates that the program grew out of necessity. In San Diego’s case, he said it was a declining economy and a desire to “put together a culture here that exists in Silicon Valley.” The drivers were eight people associated with UCSD, private corporations like Qualcomm and Hybritech, and the city’s Economic Development Corporation.
Twenty-five years, San Diego is home to 3,000 new technology companies created at least in part through the efforts of CONNECT. In addition, 14 percent of the region’s economy and 173,000 jobs are tied to research, technology, innovation and manufacturing.
“San Diego gets a new technology company every day,” Roth said. In spite of this success, however, the CEO said CONNECT is pursuing an entirely revised strategy based on the realities of today’s economy.
Roth explained that CONNECT has a simple formula – CONNECT = (BC/VC/EC/RC/DC/CC). The components in the formula are:
BC (Business Creation with a strong emphasis on mentors);
VC (Venture Capital);
EC (Educational Curriculum);
RC (Recognition and Competitions);
DC (Washington Politics); and
CC (Convergence Clusters).
How successful has this integrated component strategy been? Roth cited 80 research institutes located in San Diego, including six established in the last two years. He added San Diego is home to 3,000 IT, wireless and software companies and 800 energy and environmental companies.
CONNECT is not standing still. It is expanding with new clusters that have already created 50 mobile health/genomics companies; more than 75 bioinformatics start-ups; 250 biofuels, solar energy and energy storage companies; and more than 75 autonomous robotic and cybersecurity start-ups.
In spite of its success, Roth said CONNECT must abandon its old model to focus on a newer approach, driven by what he described as the challenges to innovation leadership in the United States. He cited four trends that drove CONNECT’s “Distributed Partnering Model.” They are:
The model for funding discovery and commercialization no longer works.
The “productivity dilemma” demands that this country reassume global leadership in productivity.
The reality of “ROW,” which is an acronym for the “rest of the world.” Roth says that “we have lived on our own markets forever (but must now) focus on products for customers elsewhere.”
Finally, workforce preparation continues to challenge regions.
Roth described the old model as a sequential one – discover, define, develop and distribute – while the new, “Distributed Partnering Model,” requires an entirely different set of arrangements and alliances. Companies have their respective roles and have to embrace dependency on others rather than control all aspects of the life cycle.
To better illustrate his concept, Roth used the continuing evolution in the wireless industry and the concept of a “Production Cluster” or collaboration cloud. The discovery phase is best represented by technologies like GPS and CDMA that Roth attributed to federal funding. In defining a use for the technology, it took companies like Qualcomm to do so. Next came the development of the product, a role best perfected by Apple as well as others like Nokia and Research-in-Motion. The final element – distribution – requires companies like Verizon and AT&T.
With more specialization, Roth said the need for as many start-ups focused on the full cycle is less. “Instead of investing $1 million in each of 10 companies, we might invest $10 million in one company,” he explained, adding that “the greatest missing piece in the country today is the ‘define’ element.”
Lest one wonder about CONNECT’s national reputation, Roth said New York Governor Mario Cuomo announced in his “State of the State” speech that he was adopting the CONNECT model.
The Tennessee delegates seemed very impressed with CONNECT’s success and the concepts that were offered to help drive innovation in our state.