San Diego Innovation Economy Extended Gains in 2015: Connect Report

the innovation sector in San Diego was $116,300 last year. That’s much higher than the average local salary for the overall private sector—$49,350.

—ICT is the largest technology cluster in San Diego. It includes software, telecommunications, computer and electronics manufacturing, cybersecurity, and informatics. The report counted 3,270 ICT companies in San Diego County in 2015, with 68,825 employees. The average annual wage of the communications equipment-manufacturing sector was $132,500.

—San Diego biotech and pharmaceutical companies had the highest average annualized wage in 2015 at $175,400. The average wage in the software sector was $119,600, followed by computer and electronics sector at $113,250.

—In 2015, ICT accounted for almost half of all innovation economy companies in San Diego, employed over 45 percent of the innovation economy workforce, and generated about 47 percent of all innovation economy wages.

—Venture capital funding to San Diego innovation companies last year amounted to more than $1.2 billion in 104 deals. This was almost 35 percent higher than 2014, and was the highest amount of capital invested here since 2007, when $1.9 billion was invested in 174 deals.

—Angel investors provided $74 million in 122 local deals in 2015.

— Forty percent of the VC funding in San Diego went to seed and early stage companies in 2015. (The report breaks those investments into two separate categories.) Capital for seed-stage companies in San Diego jumped by 642 percent, from $18 million in 14 companies in 2014 to $135 million in 17 companies in 2015. Early-stage funding declined by 19 percent, from $394 million in 41 companies in 2014 to $320 million in 37 companies. Expansion-stage investments grew 170 percent, from $125 million in 23 companies to $337 million in 24 companies. Later-stage investments increased 48 percent, from $268 million in 27 companies in 2014 to $397 million in 26 companies in 2015.

—Three San Diego companies went public in 2015, raising a total of $187.8 million in their IPOs. Cidara Therapeutics (NASDAQ: [[ticker:CDTX]]) raised $76.8 million, aTyr Pharma (NASDAQ: [[ticker:LIFE]]) raised $75 million, and Tracon Pharmaceuticals (NASDAQ: [[ticker:TCON]]) raised $36 million. Other publicly traded life sciences companies raised $2.7 billion in follow-on offerings, led by Neurocrine Biosciences (NASDAQ: [[ticker:NBIX]]) ($250 million), Auspex Pharmaceuticals ($226 million), and Mirati Therapeutics (NASDAQ: [[ticker:MRTX]]) ($146 million). (Auspex has since been acquired by Teva Pharmaceutical Industries (NYSE: [[ticker:TEVA]]).)

—Corporate mergers and acquisitions in the San Diego innovation sector are on an upswing. The local innovation economy represented almost 80 percent of the region’s total deal value in 2015, which amounted to $31 billion.

—Federal grants for research by the National Institutes of Health and National Science Foundation to San Diego institutions totaled more than $1.2 billion in 2015, a 3 percent decline from the nearly $1.25 billion awarded in 2014. According to the report, San Diego research institutions have a $4.6 billion economic impact and are the core of the region’s $14.4 billion scientific R&D cluster.

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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.