Keep the focus on San Diego and the area’s many assets, advised Peregrine Semiconductor Corp. co-founder Rory Moore.
“We will never be Silicon Valley,” said Moore, who has invested in and co-founded several technology companies and a pro bono incubator. “Silicon Valley was the perfect storm. There’s no place like it anywhere in the world. It hasn’t been repeated anywhere in the world, and it can’t be repeated.”
Instead, he said, use what’s available in San Diego — the people, education, talent, resources and capital — to create a unique technology and biotechnology sector. And stop lamenting the loss of manufacturing jobs.
“We’ve just got to get over that,” said Moore, whose Peregrine Semiconductor (Nasdaq: PSMI) is one of the world’s leading providers of radio frequency integrated circuits for wireless communications.
“Where we add value here is creating companies with new inventions, new technology. …We have to keep the scientists here that we attract from other countries.”
Moore was one of four speakers at last week’s Institute of Real Estate Management's symposium, which focused on the impact of San Diego’s mega-industries.
The four pillars of technology, biotechnology, military and tourism were remarkably resilient during the recession, said moderator Roger Hedgecock, former San Diego mayor and conservative talk radio host.
“We are at last moving more into the recovery mode than we have been,” Hedgecock said. Executives on the panel spoke about how their industries are spurring economic growth in the region.
Moore is the CEO of CommNexus, a nonprofit technology industry association that launched a pro bono business incubator, EvoNexus, with three locations. Moore said more than 1,000 jobs have been created as part of the 73 still-active companies that went through the program. Companies raise an average of about $7 million in funding.
Graduates of EvoNexus have leased more than 100,000 square feet of office space since the incubator began. More companies create more jobs requiring more office space, Moore said.
“Please keep in mind that these startups that come through incubators in San Diego don’t need a lot of capital to start. You are also an investor. I know many of you are very successful. Consider recycling some of your money in tech, not just real estate,” Moore said.
Brent Jacobs, executive director of Cushman & Wakefield’s Global Life Sciences Practice Group, said more than 36,000 people work in the high-tech/biotechnology/health care industry in San Diego, and 900 health care companies with 80 institutes.
The combined industries generate about $36 billion a year for the region. The core of the life sciences industry resides in Torrey Pines, Sorrento Valley, Sorrento Mesa and University Towne Centre, with about 17 million square feet of space.
“It’s like an inverted triangle. A little bit of real estate creates this much economic activity,” Jacobs said.
San Diego typically ranks third after Boston and San Francisco in terms of the square footage for the industry.
“We are the most productive, most innovative,” Jacobs said. “We have more products come out of laboratories and go into the marketplace than both of those particular regions. We’re off the charts. And one thing we have because we are close together in this finite area, we have fantastic communications, and we all work together.”
San Diego also has the highest concentration of military in the world and the second-highest concentration of veterans, which make up the city’s largest economic cluster, said Terry Magee, a consultant and member of the board of directors of the San Diego Military Advisory Council.
The military’s $25.2 billion in direct spending helps keep the region’s economy robust and supports 317,000 jobs, Magee said.
But the lack of affordable housing presents a challenge for members of the military, particularly for lower-paid enlisted service members who earn from about $32,000 to $40,000. While the military has some housing, about 1,200 units for officers and about 15,000 units for enlisted, the average wait time is roughly 14 months.
“As the military presence in the area grows, and it should grow over the next few years, you’re going to see an increased need for housing,” Magee said. “Military housing in the region is inadequate … They’re going to have to look for somewhere to live on the economy.”
Low pay scales and allowances will make some in the military look for rentals in less attractive areas, Magee said. To buy, service members would need to have higher ranks and have a second household income.
According to a recent HSH.com survey, San Diego homebuyers need a household income of about $101,700 to buy a median-priced home at $517,800.
Todd Little, executive director of the Coronado Tourism Improvement District, discussed the tourism industry. Coronado receives about $12 million annually in hotel taxes, and San Diego receives about $203 million, Little said.
The revenue goes into general funds, which funnel into libraries, parks, police, street paving and other services.
Little said that the San Diego region needs to market itself on its uniqueness and by building the demand.
“You, as property managers, should use the word 'desirability,'” Little said. “If people want something, they’ll pay more for it.”
The longer visitors stay, the more they spend, which will in turn support jobs and business that benefit the region, Little said.
Coronado hopes to grow as a host site for meetings and conferences.
“Regional travel is very strong, but there’s growth to be had in the off-season with bringing groups to Coronado, not just for meetings but as a whole destination,” Little said.
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