Innovation Economy Accounts For Quarter Of San Diego's GDP
San Diego County's innovation economy grew to $52 billion last year, accounting for nearly one-quarter of the region's gross domestic product, according to a report released today by San Diego Connect.
The report from the organization that nurtures high-tech startups also found that 255 software companies were created in the San Diego area in 2015, the fourth most in the state, and 82 life science firms were founded. Another 50 companies working in communications, computers and electronics were formed.
The new companies resulted in more than 1,600 additional jobs, according to the report.
"This is further proof that San Diego's innovation economy has matured to a point where it's a vital part of our economic future," Mayor Kevin Faulconer said. "It's no wonder why more and more smart, creative people and businesses are choosing San Diego as their home."
Among other findings:
- almost 404,000 jobs in the region, or about 30 percent, were indirectly supported by innovation economy companies and institutions;
- the nearly 150,000 people employed in the sector earn an average salary of $116,000, or 2.4 times that of the typical San Diego job;
- area companies and research institutions received $936 million in grants last year from the National Institutes of Health, $282 million from the National Science Foundation, $67 million in small business funds, and $41 million combined from the National Aeronautics and Space Administration and National Oceanic and Atmospheric Administration; and
- innovation organizations had nearly 7,000 patents applications published and almost 6,500 patents granted, both second most in the state.
Greg McKee. CEO and president of Connect, said there’s still a lot of unrealized potential in San Diego because there are plenty of investors in the region. He said they just need to understand the risk.
“I think management of that risk and understanding that risk is a key element here, because there certainly is a lot of capital around but a lot of it is being invested in other areas outside of early-stage ventures — lot of real estate investing, a lot of investing in publicly-traded companies, more established ventures and so forth,” McKee said.
McKee is also concerned that there’s a chance an economic slowdown could interrupt progress.
“We need to anticipate that at some point down the road there’s going to be a pullback," he said. "I want to make sure that the entrepreneurs are prepared for that. They have extra money around, they have a little more time, and that investors also realize that might slow down the investment in some of these companies.”
Of the startups over the past two years, 63 were set up in Carlsbad, 54 in downtown San Diego, 52 in Sorrento Valley, 46 in Carmel Valley and 44 in La Jolla, according to the Connect report.
San Diego's innovation economy includes, among other things, biomedical products, biotechnology and pharmaceuticals, communications, computers and electronics, software and environmental technology.