Survey: San Diego Keeps Leading In Clean Tech

FUDGE: You are listening to Midday Edition, I am Tom Fudge. San Diego is a clean technology hub, which lives in a state that is far and away the most bustling center for clean technology. In fact the advisory firm Clean Edge rated San Diego seventh among all US metro areas in its employment and production of clean technology. But, what is clean technology and why does it matter? Joining me to talk about that and talk about the results of the survey is Holly Smithson. Holly is president and chief operating officer of CleanTECH San Diego and thank you very much for coming in. SMITHSON: Thanks Tom, delighted to be here. FUDGE: And our listeners if you work in the technology sector give us a call if you want to join the conversation. Holly, first of all what is clean technology as it is understood in the Clean Edge rankings? SMITHSON: So clean technology is actually one of the biggest job engines for the greater San Diego region and that is really how we view this opportunity. About six years ago, Mayor Jerry Sanders had this very ambitious agenda and he thought that he could stand up this brand-new industry called clean tech and the clean tech umbrella really encompasses companies playing in the renewable energy space like solar, wind, geothermal and clean transportation like electric vehicles and hybrids that we see on San Diego roads. It includes energy efficiency and water so there's a host of opportunities and companies that are coming in to take part. FUDGE: Getting back to Jerry Sanders, you obviously give him credit for fueling this clean technology trend. What did he do? Did he just use the bully pulpit, or did he offer tax incentives? SMITHSON: So actually, it all starts with a vision, as you know. And I would actually view San Diego and his administration as the outlier to actually see the opportunity and to seize it. So one of the great things that we were able to do is to do the collaborative thing and that is what San Diego does sort of I would like to think better than others, better than her peers so I was really the opportunity to put your flag in the ground and say we are open for clean tech business we have a very concerted effort to bring together the public sector and the private sector because you cannot do one without the other and that's really what was highlighted by the report we had a significant jump in a rating because of, for example, the Port of San Diego, the almighty Padres, these are some big institutions that are coming together and implementing some of the clean tech solutions. FUDGE: You were talking about earlier about what I think people call indicators or maybe the survey called them indicators. What are the indicators? SMITHSON: So there were a number of categories that would warrant you to be on the top 10 listing and we lived in a number of the indicators the ranking that we are was in clean transportation and we ranked at number four. There are today about 5000 electric vehicles on San Diego's roads. FUDGE: That's an important point because somebody will talking about this might think we are talking about the industry and the creation of clean technology in the industry but it's not just that it stresses that are made by consumers. SMITHSON: Absolutely, adoption by all of the communities that are talking about where we going to take our technology, we are going to take our sustainable solutions they want to be close to the market and the San Diego and by their very nature are early adapters. We are first verse and we like to get the first new shiny gadget, so that is I think that is just the fabric of San Diego. FUDGE: In terms of industry, can you tell us a story about an industry that has really grown up. That would exemplify clean technology? SMITHSON: So, I would actually, there's a couple, that is a tough corner to back me into just need one and that's kind of why you see the type of recognition and brand ranking that we have but I just will point out the solar, so the solar adoption we have more solar rooftop than any other region in the state, I daresay the region and that has nothing other than to do with folks that want to take advantage of the solar power so we've got that on the rooftops, so what does that do? It signals to the rest of the country that there is a very frothy market so again you're starting to see the adoption of clean technology and then you start to see the companies that want to be closer to the customer, then you start to see the sector enterprising companies coming here establishing their footprint and of course creating jobs, so it's a beautiful recipe of innovation and job creation. FUDGE: Biofuel, is that an example of something going on here? SMITHSON: Biofuels is another sector where San Diego is really head and shoulders above the rest. I know you've had a number of folks on here to talk about the great advanced research happening here in San Diego. We actually have a program that we just completed because what we are talking about here in terms of creating these companies and creating the jobs we have to have a parallel workforce in next generation of laborers that can help the companies grow and in the biofuels area we have so much research going on but we are also training the next generation of laborers so the (inaudible) energies and general atomics and synthetic genomics don't have to go somewhere else in order to grow their business. FUDGE: Holly Smithson is president and COO of CleanTECH San Diego. We are talking about San Diego's ranking in terms of clean tech metropolitan areas. Do we have the kind of education system that we need to educate people to go into this business? Y SMITHSON: It's interesting that UC San Diego is world-renowned for its microcredit have about 90% of all of the generated on the campuses self produced in fact the Assistant Secretary of the Navy is coming in tomorrow to do a tour. The DOD is very focused on trying to install a lot of renewable energies and energy efficiency on their installations and they just deployed, just announced a grant for $3.5 million to a number of San Diego companies that are going to create a cluster of micro-grants on three Navy installations. So whether it's biofuels whether it's suitable energy whether it's clean transportation, we are just, we cannot help ourselves. The leadership is all over the place. FUDGE: And obviously we've got the inclination to do this, but is this industry really creating jobs? SMITHSON: It is creating jobs. I mentioned just a couple of anecdotal examples but one of the reports that came out, it is a bit dated, I think it's over a year old, they had measured over 10,000 jobs that were coming out of the industry as a whole. So I suspect when we revisit that and start to look at more current numbers that it will continue to climb north. FUDGE: Are those manufacturing jobs, research jobs? SMITHSON: They actually run the gamut so it's engineering jobs, obviously the installation of all of these solar panels. The HR, it's the marketing of all of the clean transportation opportunities so it really runs the gamut. FUDGE: I guess I like a lot of people involved in economic development, you look to government with some concern and some concern about the regulatory processes that you feel could hamper growth, can you talk about that? SMITHSON: I think history has shown us time and time again that policies actually create markets and California is no exception to that I'm referring to AB 32 which was governor Schwarzenegger's landmark climate solutions act. FUDGE: What did that do to create the industry? SMITHSON: You're basically creating a demand. Parts of AB 32 is there is a cap and trade portion of it there's a legislation renewable portfolio standard and all of these are market drivers and eight basically tell the rest of the companies that the companies and utilities have to comply and come up with renewable energy solutions and they have to do so within a tight window so what it does is signals to the market that if you want to consult product and push product there's going to be a very ready market. FUDGE: That's the good news when it comes to government regulation is there some bad news, too? HOLLY SMITHSON: Absolutely that's at the macro level, the state level and of course you couple that with Department of Defense mandate, secretary Mavis said that 20%, I'm sorry 50% of all of their operations will be powered from renewable energy efficiency. That's another federal market driver but what's happening on the local level, Tom, is you need to make sure that the ordinances and you need to make sure that the permitting processes actually married that so that we are not talking out of two sides of our mouths. There's a lot of confusion about archaic regulations on the books. They have to keep up with current technologies. TOM FUDGE: Can you give me an example of some of those archaic regulations? SMITHSON: As a matter fact I can. Let's say for example the huge number of renewable energy products that are happening out in Imperial Valley. Imperial Valley has about 30% unemployment. They are starved for new companies and new opportunities with which to enrich their citizen slaves of there are a number of products projects I have to go out there to help to supply power to the utility but unfortunately some of the local ordinances are inconsistent with that so there is a time, there's a process and sometimes that runs against about the timetables are within the power purchasing agreements. So, again, they are all pioneering but you have to make sure that you have the will of the people and very strong committed leadership at the local level that also matches at the state and federal. FUDGE: I assume you're talking about zoning ordinances, laws that dictate how you're supposed to use land? SMITHSON: Right, for example I don't want to get too technical, but for example if you are a wind project oriented developer and you go out to a certain area where you think there is high wind volatility before you go out there and invest hundreds and hundreds of millions of dollars you have to put a premature so you basically want to measure and see how frequently the wind blows and if you will be rich enough to merit a project. There was one company that actually had to spend over $1 million because the permitting process said that it was too high when in fact it was no higher than local radio stations tower. So, these are the types of obstacles that are really inconsistent with how we want to project ourselves to the rest of the country as a leader in clean tech when you're really putting shackles on these folks' feet. FUDGE: And what about competition from other markets, from markets like China and Mexico that have cheaper labor? SMITHSON: Yes, so it's really an opportunity for us because we don't actually see San Diego as competing with one region or the other. So everything that we need to do, it's not going to be one Google, it's not going to be one search engine. We actually need multiple regions trying to provide and solve some of these problems, so Mexico is actually one of the things that we consider to be a market differentiator. If we partner this air, Filner actually led a delegation to look for ways that we can collaborate and really operate as a region. There's obviously a number of maquiladoras down there, there's a bunch of benefits and assets that we as a region can start to leverage way more aggressively than we have been. To your question of China, China actually joined Gov. Brown in a trade mission in April and the theme of the trade mission, Tom, was all about growing your economy, but still controlling your atmosphere and your air quality. FUDGE: You know we are almost out of time and we just spent a little bit of time talking about the closure of the San Onofre nuclear power plant. How is, if it does really, doesn't relate to the creation of clean tech in San Diego? SMITHSON: We are actually really fortunate that we had the foresight to build the superhighway, what we call the sunrise PowerLink. That actually has the ability to, in the next two years will have the ability to deliver over 1000 MW of renewable energy. So you could not have a better time for that to be powered. And really, for all of the programs that have been put in place by SDG&E and by a number of other community partners we get to put in place the energy efficiency measures. We now get to put in place a demand response. FUDGE: To make up for San Onofre? SMITHSON: Absolutely. So it's that idea for later on when you have anticipated fallouts that you actually have a resilient and sustainable community and that is the mission of clean tech San Diego. TOM FUDGE: Holly Smithson is president and COO of CleanTECH San Diego. She joined me to talk about San Diego's ranking among metropolitan areas in the clean tech industry. San Diego is actually number seven. And Holly, thank you very much for coming in HOLLY SMITHSON: Thank you and if I can add that we have a state of the industry showcase on June 25 at the USD Joan Kroc auditorium for more information.