Entrepreneurial companies are critical to San Diego’s economy. Unlike many regions, which have large companies that dominant the corporate landscape, much of San Diego’s job growth is the result of small companies taking an idea from the lab bench and the drawing board to the market. These companies have helped transform San Diego, from largely a military town, in which the level of defense spending dictated our economic conditions, to one in which the diversity of our technology-led economy has made the region the envy of the world. The number of firms that started in San Diego and have grown into the major players in their respective industries is impressive. …Who knows which new start-up company will be San Diego’s next Qualcomm?
Yet for all their importance to the region’s economic success, there has not been a good measure of the number of small firms which are being created. State and national sources fail to find these companies, which often fly under the radar screen before they rapidly start to grow. And because of a lack of good data, it has been difficult for policy makers to measure whether they are doing a good (or poor) job in fostering the kind of economic climate that can help these companies to thrive.
That is why the San Diego Institute for Policy Research is excited to be engaged in a new collaborative effort with CONNECT to launch a new index, known as the “CONNECT- dex” (http://www.sandiegoinstitute.com/policy/research/). The index tracks the creation of new technology company starts and provides a measurement for how well San Diego is doing to continue fostering an entrepreneurial climate in the region.
San Diego has tremendous advantages. Thousands of smart, innovative, and driven professionals graduate each year from our region’s institutions of higher learning. The research done at university labs is critical to companies seeking to introduce new and innovative products. Our local business community is extremely collaborative and has organizations, such as CONNECT, that help start–ups to succeed. And, of course, you can’t beat the weather.
But we should not rest on our laurels or believe that past success guarantees future prosperity. Other states and regions are engaged in a cut-throat competition to attract our entrepreneurs and convince them that they can grow their companies faster and create greater value for their stakeholders in other regions. Florida, for example, has made nearly a billion dollars worth of investment in fostering their life science industries and has successfully attracted satellite operations of two of our local research institutions. Florida policymakers have expressed their goal to build a world class biotechnology cluster that is on par with San Diego. Other regions offer aggressive tax breaks and other economic development incentives to attract these fast growing, technology-oriented businesses.
It is particularly important that San Diego elected officials understand the ingredients that help fuel the success of technology companies. Continued expansion at our region’s universities must be supported for these companies to thrive when there is a highly talented and highly skilled workforce. Our research institutions deserve our strong support. They attract hundreds of millions of dollars in funding for basic science. In that respect, it is vital that the City of San Diego approve the Salk Institute’s proposed master plan as Salk continues to attract the best and brightest scientists and researchers.
Policy makers must also preserve San Diego’s current low business tax structure. Cash is a scarce commodity at start-up companies and forcing them to spend too many resources when they are first established can be fatal to their success. And finally, it is vital that elected officials look skeptically at calls for new regulations and new restrictions on private enterprise. Such policies do little but burden those creating jobs with red tape and encourage them to more welcoming localities when they contemplate expansion and growth.
Ultimately San Diego’s future will depend upon a robust and growing private sector that creates prosperity and opportunity for our citizens. Creating and utilizing better measures for how well we are doing such as CONNECT-dex, and then taking action to do even better, will ensure a better future for the region.
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