San Diego’s Innovation Economy Strong, With Some Emerging Concerns

economic signals affecting San Diego’s biggest technology clusters—in life sciences, software, communications, and other sectors—during the first quarter of 2012.

Venture capital firms invested a total of $356 million in 22 companies in San Diego during the first quarter, the highest amount since the third quarter of 2009. (As we reported at the time, however, one deal accounted for $144 million of that.) More than two-thirds of the total capital was invested in early stage companies, and the new ventures created 171 new jobs in the region (a decrease from 2011 when startups created an average of 296 jobs per quarter.)

San Diego also hit a patent record during the first quarter, according to the report, with 1,284 being granted to San Diego inventors.

The report shows that entrepreneurs founded a total of 58 tech companies here during the three months that ended March 31. That was the lowest total for this region since the first quarter of 2010, when 35 startups were founded. It marked a 29 percent decrease from the fourth quarter of 2011, when 75 startups were founded, and a 17 percent decline from the year-ago quarter, when entrepreneurs founded 70 startups here.

So what happened? There were many fewer software startups during the quarter—just 15, in contrast to 2011, when the quarterly average of software startups was 27.

The report also shows biomedical research for San Diego universities and institutes amounted to $115.6 million during the first quarter. That was down 21 percent from the previous quarter ($148.1 million) and off more than 55 percent from the year-ago quarter ($257.8 million)

The report says the drop is the result of the National Institutes of Health operating under a continuing budget resolution. Further reductions are expected, as the government’s efforts at deficit reduction are projected to bite deeply into research grant awards.

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Author: Bruce V. Bigelow

In Memoriam: Our dear friend Bruce V. Bigelow passed away on June 29, 2018. He was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here. Bruce Bigelow joined Xconomy from the business desk of the San Diego Union-Tribune. He was a member of the team of reporters who were awarded the 2006 Pulitzer Prize in National Reporting for uncovering bribes paid to San Diego Republican Rep. Randy “Duke” Cunningham in exchange for special legislation earmarks. He also shared a 2006 award for enterprise reporting from the Society of Business Editors and Writers for “In Harm’s Way,” an article about the extraordinary casualty rate among employees working in Iraq for San Diego’s Titan Corp. He has written extensively about the 2002 corporate accounting scandal at software goliath Peregrine Systems. He also was a Gerald Loeb Award finalist and National Headline Award winner for “The Toymaker,” a 14-part chronicle of a San Diego start-up company. He takes special satisfaction, though, that the series was included in the library for nonfiction narrative journalism at the Nieman Foundation for Journalism at Harvard University. Bigelow graduated from U.C. Berkeley in 1977 with a degree in English Literature and from the Columbia University Graduate School of Journalism in 1979. Before joining the Union-Tribune in 1990, he worked for the Associated Press in Los Angeles and The Kansas City Times.