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The past and future of SD's innovation economy

“Study the past if you would redefine the future.” Sage words from Confucius, and ones that Mary Walshok, UCSD associate vice chancellor for public programs and dean of extension, puts great stake in.

Walshok, who was what she calls a “participant observer in a changing economy and changing society” in San Diego over the past few decades, recently came out with a book on the history of the region’s innovation economy, and shared her perspectives on what made San Diego the city it is today, and what’s needed to keep its business environment ahead of the curve, at a North San Diego Business Chamber presentation Wednesday.

At the core of maintaining a strong innovation economy — in the past and the future — is having civic leaders who can spot promising trends and then take the necessary, ground-up action to do something about them.

Walshok highlighted two such movements — encouraging R&D in the defense and life sciences industries and lobbying for a University of California campus here — that are vital parts of the region’s past, and should serve as examples for the future.

“If you don’t understand the history of the military in San Diego, you don’t understand why we have Qualcomm or why we have UCSD … and the high-wage jobs they create,” Walshok said.

“The reality is the Navy and aviation, two forces that established a presence here at the turn of the last century and throughout the 1920s and ’30s, had an enormous appetite for innovation and R&D.”

Walshok said the country’s attitude about the role of science and technology changed after the creation of the atomic bomb, leading to an increased investment in basic scientific funding.

“A lot of the aeronautical firms and the ship building firms said ‘We don’t just need engineers, we need good physicists, we need chemists, we need science-based technology,’” she said.

“And so there was this tremendous growth in the 1950s and ’60s for science funding — the Office of Naval Research, putting in research budgets in the Department of Defense and the Department of Energy and the creation of the National Science Foundation…

“And the leaders of this city recognized what this meant. So defense contractors … became strong advocates for growing the science and technology research abilities in the region. The chamber, in 1961, published a brochure saying ‘Bring your R&D projects here.’”

Walshok said there was a similar trajectory in life sciences and health, brought about initially because of the interests of the earliest settlers, and sustained by research funding.

“Most of the people who migrated to this region and to California and much of Arizona, in contrast to the industrial Northeast, and Midwest, were middle-class, reasonably well-educated people, but over half of whom had health problems,” Walshok said.

San Diego was built on a utopian ideal that aimed to create as great and important a city as Chicago or Pittsburgh, but without the dirt and grime, and maintain the area’s natural beauty. Thus the early influential families — Scripps, Spreckles, Revelle —invested in Scripps Hospital, for example, when insulin was discovered, and created the Scripps Research Institute and a marine biology research institute.

“The early values and leadership of what I would call ‘yokel locals’ built the platform for what is today a global economy that is respected around the world,” Walshok said. “People get very inspired by this story, because in the same 50-year period, many places cross the U.S. and Europe have not been able to do this same thing.”

The second example comes later in the city’s history, when leaders and community members lobbied for a University of California campus in San Diego. It took three trips to the Board of Regents to getting approval via a ballot measure for land on Torrey Pines Mesa for the campus, rerouting flights from Miramar and a $1 million donation from John J. Hopkins, to win approval for the campus. Civic leaders were relentless.

“That story for me is iconic about how a community recognizes where its future lies, and mobilizes,” Walshok said. “None of those guys could have imagined a Hyper Tech or Qualcomm or Illumina or a Life Technologies, but they knew in their guts that change was a part of what they had to embrace, and that R&D was so essential.”

Walshok said she was interviewed by a Rhode Island newspaper about why this was possible, because their community’s citizens kept voting down land dedicated to science parks and incubators.

“Well I wasn’t alive then, but I think it was that they understood — perhaps because of our military history — that it was innovation that would renew the economy. And as long as we were taking steps to support innovation, our economy would work.”

So what steps do we need to take now for the city to reinvent itself and stay innovative? The big ones, Walshok said, are recognizing the global nature of economics and increasing our share of exports to growing nations.

“San Diego has to grow up in this arena,” Walshok said. “We are not as globalized as we need to be. And all of you know this, the fastest-growing markets are not the U.S. and Europe, they’re China and India. If you look at our export data, it’s very bad. … Our primary exports are going to Canada and Mexico. That’s very good, but all of Latin America, all of Asia, those are the markets we should be able to penetrate.”

In addition to ensuring at least a third of our city or region’s companies fall into the “globally traded sector,” which attracts international investment and high paying jobs, Walshok said it’s also important to ensure other factors make the area a place talented people will want to stay, such as social, cultural and educational amenities.

Additional spaces for improvement if San Diego is to increase its international presence, include a desperate need for training highly skilled technical workers — no longer trained by community colleges and not falling under the university realm — and the need for more action on broad-based decisions.

“I think there are many centers of gravity in terms of leadership … and there are postures of leaders that need to be brought together to mobilize and legitimate their sectors around common goals and common values,” she said.

“And I think the cities that are going to work moving forward are going to have the mechanisms to sort of bring this distributed leadership together. And San Diego’s got a damn good chance of beginning to function that way because here’s one of the unintended consequences of the military.

“There [are] no stable, immovable industries like the automobile industry, or no old rich families like the Danforths from St. Louis. … We all bring our little $1,000 or $10,000 or $100,000 and we pool it, create things like Biocom and Connect and chambers of commerce, and move things forward with a much broader basis of consensus.”

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