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San Diego’s High Tech Success Highlighted by SBA’s Office of Advocacy

July 14, 2000

In the late 1980s and early 1990s, as big defense contractors closed their doors and unemployment climbed, San Diego looked as if it might not recover. Between 1990-1993 alone, nearly 60,000 high-paying jobs were lost to defense and aerospace cutbacks. Although the region had some of the ingredients to be successful (defense technologies, a strong university, medical and bioscience institutes, and a desirable climate), the players did not come together to face their economic woes. It took losing two major bids for federal R&D facilities to spur community leaders to action.

Developing High-Technology Communities: San Diego, prepared by Innovation Associates for the Small Business Administration's Office of Advocacy, tells the San Diego story with supporting statistics of how the region turned things around through technology-based economic development. With all of the elements in place, small technology businesses emerged to become the number one job creating mechanism for the San Diego area. By 1998, San Diego had 100,000 more jobs than it had in 1990, despite the defense cutbacks just a few years earlier.

The report uses San Diego as a case study to explain to other communities, universities, and the private sector how to develop a high-technology economy. Sixteen lessons are identified from San Diego’s experience, including:

  • A research university provides a valuable resource for technology firms, but does so only if the university is open to and actively facilitates linkages with the private sector. Leadership within the university, from the top, sets the tone and direction for cooperation with industry.
  • Research universities not only are an important source of R&D, but perhaps more importantly, are a source of future skilled labor for growing technology firms. The supply of technicians and technical support is as important as the availability of engineers and scientists to support growing technology firms.
  • Industry organizations can provide an important forum for technology industries to exchange ideas, keep abreast of developments in their field, and advocate for issues that affect their industries. As firms in certain technology clusters developed, they spawned other firms in that cluster.
  • Local and state governments can make a difference by creating a “business friendly” environment for technology firms. Cooperative leadership from all sectors - academic, government, and private - is an indispensable element in creating a technology environment.
  • An economic downturn may unite community leaders, but it takes a common vision of the future and a local plan of action to sustain the momentum. Small firms, in business services and technology, were the driving forces of San Diego’s economic turnaround.

Chapters in the report are dedicated to discussing university-industry cooperation, the role of community-based organizations, and public policy initiatives to support small, technology businesses.

To download the full 100+ page report, go to the Office of Advocacy’s web site http://www.sba.gov/advo/research and scroll through the list of studies under the heading “Science, Technology and Innovation.”

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