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The Big Picture San Diego Blog


Big Picture San Diego Blog

February 26, 2013

Mayor Bob Filner was the SD Press Club's first Newsmaker of 2013; Mark Cafferty will be its second. Join the San Diego business and journalism community for a breakfast this Thursday, Feb. 28 at 7:30 a.m. Mark will provide new EDC updates including the recent successes the organization has had generating and maintaining jobs throughout the region. He also will tell you how he really feels about attempts to lure businesses from California to Texas, and you'll get the latest update on efforts in Washington to curtail across-the-board budget cuts (known as Sequestration) scheduled to take effect Friday. You won't want to miss it.

Everyone is welcome! Please find more details and RSVP here

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February 21, 2013

San Diego Venture Group gathered a diverse panel of San Diego-based venture capitalists recently to talk about their focus, how they spend their time, and what they recognize as red flags for prospective investments.

Jason Brown of Thomas McNerney & Partners made the first meeting/first date comparison with the comment that the venture investor/company relationship is like a marriage of sorts, except that you don’t want it to last … Compatibility is important when you’re going to spend so much time together. Brown concentrates on life sciences investing which carries huge risks and costs. “Getting to ‘yes’ is difficult. The elements of risk have to be achievable,” Brown said, “We have to look at clinical risk, scientific risk, regulatory risk, commercial and competitive risk.” Later, when a question came up about healthcare reform, he added reimbursement risk to the list. Despite these daunting odds, Brown said he spends as much as 50 percent of his time looking at new investments.

Steve Hamerslag of TVC Capital invests in software and software services. TVC Capital looks for investments where there is already $2 - $10 million in revenues and the company has reached a point where it is time to professionalize the organization. Hamerslag said TVC invests anywhere from $4 - $10 million in each company and expects to take an active mentoring role. Red flags for Steve? Issues with bad management or trust and inconsistent answers to questions about the business. He spends about 20 – 25 percent of his time looking at new deals and said that a recommendation from a trusted source really helps a company get his attention.

Afif Khoury of Scatter Ventures invests in many different areas. A quick look at the firm’s portfolio shows everything from farming to pharma. He spends about 20 percent of his time looking at new investments and will probably make two new investments in the next 12 months. Red flags for Afif? Too rosy an outlook and overselling. When asked what was most important – team, idea or opportunity, he answered that all are important. While he made it clear that Scatter invests in people, they’re looking for markets as well as management.

David Wise of Qualcomm Labs invests both internally (Qualcomm Life, Qualcomm’s wireless health subsidiary, originated in Qualcomm Labs) and externally with a focus on platforms that will drive new business for Qualcomm technologies. Wise spoke about their venture with EvoNexus, an incubator program within CommNexus where Qualcomm Labs @ EvoNexus has funded three companies. Wise says creating companies outside the walls of Qualcomm gives small start-ups more freedom while still having access to Qualcomm’s business and technology resources. Wise estimates he spends 30 – 40 percent of his time looking at new investments.

San Diego Venture Group and San Diego Regional EDC share office space. It’s great to have someone as knowledgeable as Dave Titus, SDVG’s President, within easy reach. Access to capital is a key requirement to maintaining and growing an innovation economy. Dave’s insight and connections within the industry help us work more effectively with entrepreneurs.

February 13, 2013

As a provocative speaker and evangelist for building innovation economies, Rules of the Rainforest author Greg Horowitt asks questions, lots of questions. Horowitt was back with the EDC board recently and came with a list of questions that demand to be asked and answered if we aspire to take the regional economy to the next level of prosperity and raise awareness of San Diego as a global player. Here is the first question:

  • Who are your leaders and what are their characteristics and effectiveness?

It’s a good group to ask about leadership. Depending on what you read, you might look around to find the “San Diego 20,” as a Voice of San Diego article quoted someone calling them. If you’re a fan of Jim Clifton’s book “The Coming Jobs War,” you might see San Diego’s “tribal leaders.” Representatives of San Diego’s trade associations and the venerable CONNECT in attendance personify what economic competitiveness guru Michael Porter calls the “informal networks” that make San Diego’s innovation economy work.

Assuming that – by any definition – many of the region’s leaders were present, how can we describe their characteristics and effectiveness? As a long-time observer of San Diego’s civic organizations and institutions, I offer these primary traits of San Diego’s leaders:

They are open – here’s how Hank Nordhoff put it in a recent UT San Diego article: … "there’s an informality and unpretentiousness about San Diego. People will welcome you to these various boards, and you can have an impact almost immediately…” Nordhoff is the former CEO of Gen-Probe (now Hologic Gen-Probe) and current executive chairman of Banyan Biomarkers. He is also a past chairman of EDC. But at one time he was a new guy in town and he clearly never forgot the warm welcome.

They get along – In the last year, EDC, San Diego Regional Chamber of Commerce and CONNECT, along with other partner trade organizations, convened a coalition of senior business leaders from their boards of directors and key contributors to focus on the global competitiveness of the region. They also defined their terms so that everyone is speaking in the same language about the economy.  The groups agreed on four fundamental pillars of our economy—Military, Innovation, Tourism, and Local. Just having a common vocabulary has made communicating the strengths of our region more effective.

They are curious – Why else would they ask Greg Horowitt to come back a second time? They want to understand what’s working and they really want to understand what’s not. Being curious means looking at barriers and judging how high to jump, not how fast you can stop. Being curious gives you the confidence to engage in self-reflection without the baggage of doubt.

Posted by Andrea Moser. How would you describe San Diego’s civic leadership? We’re open to feedback. Tweet us @SDRegionalEDC and let us know.

February 8, 2013

 

With more than 660 theaters in 52 countries across the globe, IMAX has established itself as an innovative name in the entertainment, technology, and distribution sphere. In 1973, when IMAX was in search of a location to erect its first dome theater, it seemed logical to do it in an innovative city like San Diego.
 
40 years and myriad movie theaters later, IMAX executives are back in San Diego as part of CommNexus’ MarketLink program. The program, which connects innovative regional companies with multinational corporations, provides another outlet for emerging businesses to showcase their technology to companies such as LG, SONY Electronics, Motorola Mobility, Verizon Wireless and British Telecom.
 
IMAX executives, Canadian Consulate representatives, and San Diego elected officials recently had the opportunity to link up and celebrate this innovation milestone at the site of the first dome theater, the Ruben H. Fleet Science Center. City of San Diego Mayor Bob Filner was on hand to emphasize his appreciation of companies like IMAX that continue to place value in San Diego, and also commented on the dynamic economic ecosystem that is encouraged by programs like MarketLink.  As chair of the City's Economic Development Committee, Councilmember Sherri Lighter also discussed the importance of maintaining the region’s competitive edge through generating new ideas and establishing new businesses.  
 
The anniversary also highlighted the important longstanding relationship between San Diego and Canada. Canadian Consul General David Fransen noted that IMAX was not the first Canadian company to participate in MarketLink. Research in Motion — which recently changed its name to BlackBerry after its signature device – came to San Diego in 2010. With support for other regional programs including WBT Innovation Marketplace, Canada—and through its regional consulates— has demonstrated a strong partnership between the two locales.
 
If the longstanding relationship between IMAX and San Diego tells us anything, it’s that we don’t see this partnership slowing down anytime soon. 
 
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February 6, 2013

 

Statement from Mark Cafferty,  president & CEO of the San Diego Regional Economic Development Corporation, on Texas Governor Rick Perry's attempts to lure businesses out of California:
 
“At EDC we spend our days attracting, growing and retaining businesses. People choose to do business here because we are San Diego…because we are California, and because we have created a synergy and culture like no other. Companies make investments where big things happen, and big things happen here.
 
"Can California take steps to be more business friendly? Absolutely, but the fact remains that we are still number one in biotechnology, agriculture, high-tech, entertainment, foreign direct investment, and the list goes on and on. In San Diego, we are home to one of the nation’s most diverse economies, anchored by the largest military installation in the world.
 
"We are always open for business in San Diego and we welcome Governor Perry’s tourism dollars anytime he wants to drop into town.”
 
 
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February 3, 2013

Many people recognize the importance of the defense sector in protecting us internationally, but fail to recognize that it also protects the local economy. From Qualcomm to essential innovation research, the defense sector has been instrumental in jump-starting many economic facets that make us proud to call San Diego home.

Not only do recent DoD cuts mean thousands of jobs at stake in various industries in the local economy, but also mean that this ‘quality of life’ that we have worked so hard to build is in jeopardy.

Please read Mark’s column in the U-T  to learn about some of the steps EDC and regional partners are taking to defend this vital facet of our economy.

January 31, 2013

San Diego's nonstop flight to Tokyo has resumed service with an alternate aircraft, a Boeing 777. Japan Airlines (JAL) has announced they are resuming Mon/Wed/Fri service through February 17.  Schedules thereafter will be announced as soon as they are confirmed. Additional information can be found at http://www.ar.jal.com/arl/cms/contents/en/special_news_003178.html.

 

 

January 28, 2013

San Diego venture capitalist and entrepreneur Greg Horowitt took the EDC board of directors on a virtual zip line tour of his new book “The Rainforest: The Secret to Building the Next Silicon Valley” at a recent meeting. San Diego has served as a living lab for Horowitt, who is one of the founders of Global CONNECT, a San Diego-based network committed to growing new technology clusters worldwide.

Horowitt asks a provocative question: Can we engineer serendipity through design? The answer is yes – if we are designing a culture and a system for innovation. Using the contrast between a plantation and a rainforest, he illustrates the prized attributes of a plantation: order, precision, accuracy, productivity, and (to make the comparison work) no weeds. Then imagine a rainforest: it mixes diverse elements together that encourage the development of new species and allows weeds to grow unchecked.

In San Diego, we talk about an ecosystem of innovation.  According to Horowitt, the roots of an ecosystem are smart policies, supportive infrastructure, flexible but strong intellectual property frameworks, enterprise and entrepreneurial support, and a robust capital “food chain.” It also includes an informed and engaged private sector, proactive innovation leadership development, responsive and responsible workforce development that includes skill-building initiatives, active youth engagement, and university – industry linkages. A quick scan of the San Diego innovation landscape reveals that, as a region, many of these roots are well established and are growing branches that expand our economy and prosperity.

Horowitt’s Rules of the Rainforest are straightforward and time-tested:

Rule #1: Break rules and dream.

Rule #2: Open doors and listen.

Rule #3: Trust and be trustworthy.

Rule #4: Experiment and iterate together.

Rule #5: Seek fairness, not advantage.

Rule #6: Err, fail, and persist.

Rule #7: Pay it forward.

The living lab of San Diego has given Horowitt insights that he and his Rainforest co-author Victor Hwang hope will lead to a focus on the development of innovation systems rather than the more traditional emphasis on innovation at the micro level of individuals and teams. Horowitt and Hwang have given San Diego a thoughtful, well-researched look at what it takes to build innovation capacity.

January 11, 2013

A report released today detailed the impact of Qualcomm Incorporated—San Diego County’s largest private employer—on the regional economy.  Sponsored by San Diego Workforce Partnership with guidance and insight from San Diego Regional Economic Development Corporation,  “The Economic Impact of Qualcomm: Driving San Diego’s Technology Growth,” provides insights and analysis into the economic contributions of Qualcomm as well as the broader telecommunications and information technology (T&IT) industries in San Diego. The report also includes a workforce needs assessment.
 
The mobile giant’s presence in the regional economy adds $4.53 billion in economic activity annually, equal to about three percent of the county’s Gross Regional Product (GRP) in 2010. Every dollar generated directly by the company equates to nearly $2 of economic activity in the region, making the yearly economic impact of Qualcomm equivalent to one and half 2012 London Olympic Games.  
Take a look at the complete study and executive summary.
 
January 2, 2013

 

A message from our President & CEO:

With 2013 already under way, and some elements of the fiscal cliff addressed and/or postponed through last minute actions in Washington D.C., we wanted to take a moment to share what we still foresee as significant challenges for San Diego’s economy in the months ahead.

While both chambers of Congress did eventually approve a deal to fend off certain elements of the fiscal cliff, their plan postpones decisions about sequestration; the $110 billion in spending cuts that would deeply affect the military and many other sectors of the economy that receive funding from the federal government. As we have been noting over the past year with our colleagues at the San Diego Military Advisory Council (SDMAC), here in San Diego this could most notably impact our military/defense sectors as well as the research that is the backbone of our technology industries.

According to today’s Washington Post, “The legislation, which President Obama supports but had not signed as of Tuesday night, would delay across-the-board budget reductions known as sequestration for two months, setting up likely fights in Congress over the federal debt ceiling over the same period. The fiscal-cliff deal would offset half the cost of a delayed sequestration with cuts to discretionary spending split evenly across defense and non-defense programs. The other half would come by way of new revenue raised.” 

Even when a deal is reached regarding sequestration we will still see significant reductions in funding that will have big implications for our region. These reductions could have far reaching impacts to workforce, infrastructure, and research.  In the days ahead we will continue to provide you with the best and most up-to-date analysis we can on what all this will mean for our economy. In the meantime, we wanted to remind you all of the layoff support and aversion services that EDC, Manpower, San Diego Workforce Partnership and all of the sub-regional EDCs (North, South and East) can provide to companies that are faced with staffing reductions.  All of these services are free to the business community and are available year-round.

For any companies you may know of that are currently filing WARN notices, informing staff of possible layoffs and/or in the midst of downsizing, please forward them to our website to learn more about the Rapid Response services available to them.

In all ways we look forward to a strong and productive 2013 for our region. Together, by being informed and prepared, we can stand strong in minimizing the impact of sequestration to our economy and in developing new plans for job creation, industry growth and economic prosperity.