The defense and aerospace industries dominated San Diego’s economy for decades after World War II. General Dynamics was the region’s largest private employer, accounting for about 15 percent of the county’s workforce (with about 46,000 employees) in the early 1960s; its workers built commercial aircraft, Atlas rockets, and cruise missiles.
When General Dynamics began pulling up its stakes almost 25 years ago, the San Diego economy went into a tailspin, and local leaders focused on finding ways to diversify. Many smaller defense contractors shifted from manufacturing to the defense technologies that remained in high demand—especially military IT (which includes communications, computers, intelligence, surveillance, and reconnaissance). Some pursued similar opportunities in the commercial sector for wireless communications, IT, sensors, and systems integration. A small consulting company Linkabit, started by two UC San Diego professors, paved the way for San Diego to become the wireless center of the world. Similarly the founding of a successful biotech startup called Hybritech by UC San Diego professors became a paradigm in our efforts to broaden and diversify San Diego’s life sciences industry.
So what have we learned?
—Analyze what you do best and do that. During the recession that hit 25 years ago, San Diego decided to focus on commercializing discoveries from our local academic and research institutions. Local research institutes have expanded from 10 back then to 50 today. Michigan has great research institutions as well, so focus on them for inspired innovation.
—Don’t minimize the importance of small companies. You have to start somewhere. San Diego isn’t particularly well-known for its large corporations, but we are really good at starting hundreds of small high-tech, high-wage companies. Last year was not a great year for job creation anywhere, yet San Diego added 1,100 new technology-related jobs. And the salaries in those jobs are nearly twice the average wages in the area. I recommend a recent column on “Just Doing It” by Thomas Friedman in the New York Times.
—Cultivate technology clusters. In 2004, the Milken Institute published a report that ranked San Diego as the nation’s No. 1 biotech cluster. The report says “Clusters of existing and
Author: Duane J. Roth
In Memoriam: Our friend and Xconomist Duane Roth passed away on August 3, 2013, after a bicycle accident. We at Xconomy are deeply saddened by his loss.
Duane J. Roth was Chief Executive Officer and member of the Board of CONNECT. CONNECT is the globally recognized public benefits organization fostering entrepreneurship in the San Diego region by catalyzing, accelerating, and supporting the growth of the most promising technology and life sciences innovation. Focused on assisting start-up companies in the San Diego region, CONNECT has been directly involved with over 1,500 companies since its inception in 1985.
Prior to joining CONNECT, Mr. Roth founded Alliance Pharmaceutical Corp., where he served as Chief Executive Officer and Chairman of the Board. Prior to Alliance, Mr. Roth held senior management positions at Johnson & Johnson and Wyeth operating companies. He served as a member of the Board of Directors and executive committees of the Biotechnology Industry Organization (BIO), the California Healthcare Institute (CHI), BIOCOM (past Chair), Deep Sky Software Inc., and SAIC-Frederick, Inc. National Cancer Institute. Mr. Roth served on a number of advisory committees and boards of the University of California, including the President’s Board on Science and Innovation, the UCSD Sulpizio Cardiovascular Center (past Chair), the UCSD Skaggs School of Pharmacy and Pharmaceutical Sciences, the Preuss Charter School (Chair), California Institute for Telecommunications and Information Technology (Calit2), the UC San Diego Foundation Board (past Chair), and UCSD Health Sciences Advisory Board. Mr. Roth was active in the San Diego community, serving on the board of the San Diego Regional Economic Development Corporation (past Chair), the San Diego Regional Chamber of Commerce, the Lincoln Club of San Diego (past Chair), the San Diego State University College of Business (past Chair), San Diego State University Sciences & Engineering Dean’s Advisory Board, as co-Chair of the Regional Housing Working Group, and a member of the Advisory Council for Math for America. Mr. Roth also served as a member of the Executive Board for the California State University (CSU) Professional Science Master’s (PSM) Programs. Mr. Roth was appointed to the Independent Citizens Oversight Committee for the California Institute of Regenerative Medicine (CIRM) by Governor Arnold Schwarzenegger and he also served as a member on the Governor’s Commission for Jobs and Economic Growth. Mr. Roth was a graduate of Iowa Wesleyan College, where he served as a trustee.
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