engineers in China and India with much lower costs and closer to its home base. Fifteen years ago the capability of China and India to develop new technology was very low; however, their engineering capabilities have improved significantly in the last few years. As a result, they can develop almost all of the standard products today.
X: Is San Diego still considered a hub for wireless innovation?
HP: Yes, because of Qualcomm and its CDMA technology. However, beyond Qualcomm and its related technology applications, there are very limited numbers of other wireless technologies [being] developed here.
X: San Diego also had a number of companies developing networking technologies in the mid-1990s to about 2000. What happened?
HP: During that period, networking companies had significant potentials and values (IPOs or acquisitions). Many wireless high-capacity networking companies started in San Diego and were well-funded. However, the 2001 stock market crash pulled down the values of those companies. On top of this, there was lower demand for high-capacity bandwidth, with too many competitors providing solutions, resulting in lower revenues and which resulted in the companies being shut down or acquired by others.
Qualcomm’s CDMA is still one of the key technology for mobile and broadband communication. CDMA-related applications in health care or energy control is getting more traction but their markets are still small.
X: You mentioned that the startups in this sector are now in China… Why? And are American entrepreneurs also establishing startups in China?
HP: In the last 10 years, Chinese consumers can afford to spend more, and that has enabled China’s market to expand quickly. As a result, we see a number of startups moving to China to take advantage of the easier funding opportunities and the huge market potential. At the same time, many Chinese-Americans are return to their homeland possessing vast knowledge of technology, products, and marketing. The Chinese government also provides many incentives and funding to help these entrepreneurs build local companies and generate products to compete with the U.S. (Due to the complexity of the culture and language, not too many “American” entrepreneurs establish startups in China.)
X: What advantages or strong points does San Diego still have as a center for tech startups and technology innovation?
HP: The last 20 years have helped to create many entrepreneurs in San Diego, and most of them do not want to move. Having Qualcomm in the neighborhood is an advantage. That has helped build a bridge to new products with CDMA technology and access to many talented engineers with CDMA background. There is also a large pool of biotech companies and these also have helped to create new emerging “wireless health” companies. But the lack of local funding is a challenge for many startups. Without funding, it is not easy to recruit talented employees. For the last three years, [exits for startups through] stock market IPOs and [mergers and acquisitions] have been at the low end. This makes it challenging for venture capitalists to raise their funds. Lacking sufficient investors results in limited funds available for entrepreneurs.
X: Can you offer any suggestions, or identify any areas that San Diego could address to build up its tech sector?
HP: Fifteen years ago there were a number of wireless technologies [created to] enhance our lives: cellular technology, like CDMA, for mobility; Wi-Fi for wireless access to the Internet; Bluetooth for cordless connection. These technologies had been developed and enabled mass markets. Moving forward, the market demand is now [focused] more on the applications on top of these technologies, such as healthcare, transportation, and energy control. There are only a few companies in San Diego working in these spaces. Applications of a combination of wireless technology (CDMA, Wi-Fi, Bluetooth, Zigbee) and biotechnology or energy control are the areas that would need more innovation and would have significant potential in the future.
