San Diego among nation’s innovation hotbeds

San Diego ranked among the top five hotbeds for innovation nationally over a 12 year period, according to a new study that suggests tech clustering has contributed to a growing economic and political divide in the country.

The Case for Growth Cities report from Brookings Institution’s Metropolitan Policy Program and the Information Technology & Innovation Foundation calls for a massive federal effort to transform eight to 10 “heartland” cities into tech hubs.

The study’s centerpiece finding is the top five innovation metro areas — San Francisco, Seattle, San Jose, Boston and San Diego — accounted for more than 90 percent of the nation’s innovation-sector growth from 2005 to 2017.

“The San Diego story is well known and includes lots of outstanding self-help — building up research infrastructure, creating collaborative regional interactions between universities and private sector companies,” said Mark Muro, a Brookings Institution senior fellow and co-author of the study. “We are also noticing, though, that San Diego — like the Bay Area cities, Seattle and Boston — all of them have benefited from this winner-takes-most dynamic.”

These five cities made up nearly 23 percent of the nation’s overall innovation employment in 2017, up from 17.6 percent in 2005.

In contrast, 343 cities nationwide saw their share of the nation’s innovation jobs decline.

The study argues this is not good for the nation’s competitiveness. Tech hubs attract talent away from other U.S. cities. But when sky-high home prices, gridlock and increasing costs of doing business lead tech companies to expand elsewhere, they often look overseas first because of the talent deficit at home.

One-third of the nation’s innovation jobs are concentrated in 16 counties. More than half fall into just 41 counties, according to the study.

“The result is that investments flow to places such as Bangalore, Shanghai, Taipei or Vancouver rather than Indianapolis, Detroit or Kansas City,” the report said.

Brookings/ITIF said support for more widespread tech innovation centers could include targeted federal research spending, workforce development funding, tax and regulatory benefits and infrastructure development.

The study classified 13 technology and research intensive sectors as innovation industries. They include semiconductor design, communications equipment, pharmaceutical and medicine development, scientific research, software publishers and satellite telecommunications, among others.

While San Diego County ranked in fifth place nationwide for innovation growth, it was a distant fifth.

The 20,000 innovation jobs added here from 2005 to 2017 fall well below the 77,000 jobs gained in greater San Francisco and 52,300 jobs in the San Jose metro region.

“I think we have benefited from not yet having some of the challenges that Silicon Valley, the Bay Area, Boston and few other places have experienced — though we are starting to experience them now,” said Mark Cafferty, head of the San Diego Regional Economic Development Corp.

Cafferty added that San Diego is well positioned to continue to grow as an innovation center thanks to its universities, scientific research institutions and the tech companies that are either headquartered here, such as Qualcomm and Illumina, or locating satellite offices locally, including Amazon and Apple.