Thursday, October 15, 2015

Maximizing Innovation's $14.4 Billion Dollar Contribution to San Diego

According to a new report conducted by the San Diego Economic Development Corporation (EDC), innovation is a leading stimulator of the San Diego Economy.  Sean Barr, the Vice President of EDC, believes innovations economic impact supersedes that of 34 Comic-cons, 33 U.S. Open golf championships or four convention centers. Investing in research, innovation, and new products/services creates jobs and expands business.

Regional scientific R&D innovation generates around 14.4 billion dollars a year in economic impact and supports over 100,000 local jobs. Research institutions alone contribute $4.6 billion to the local economy and support 37,000 jobs.

Innovation Compared to Events

A comparison with other San Diego events, games, and conventions is important. We often hear how conventions and events will infuse the local economy with new capital. Even though conventions and events make a significant impact, it is the fundamentals of our economic system that creates the biggest difference.

The study by the EDC shows us that some of the most important economic contributions are fundamental in nature. Sustainable economics is based on our ability to spur economic activity that continues to pay dividends to residents, business, and taxes throughout the year.

Conventions, sports games, and events are more like a shot of espresso versus the slow drip of long-term economic gain. It will speed up local economics for a short period of time and continually taking shots of caffeine will keep us excited but once the drinks are turned off so are the benefits.

San Diego's Next Steps

Growth of this kind follows a Schumpterian model of finance, entrepreneurship, and economic development based upon the development of more marketable products. The next step in improving San Diego's economic potential is based in improving its financial development and investment opportunities.

According to a study of financial development and its impact on innovation in 51 countries between 1993 and 2008 improvements in the financial system promotes innovative capacity and economic growth (Meierrieks, 2014). The ability of investors to find opportunities and invest capital into local businesses makes a huge difference in success.

Government's Role

Government can provide better forms of information and data highlighting growing sectors of San Diego's economy, adjust financial policies to ensure easier access to capital, and improve public exposure of innovative clusters within the area. Government becomes a competent information generator that helps decision-makers create better growth oriented policies and attracts investors in local businesses.

Societies that seek to spur maximum growth rely on research to make innovation of various sectors possible. It is difficult to manage effectively if there isn't a clear idea of what is occurring at a fundamental level and what things are truly beneficial in spurring additional activities. In this case, I can only offer a level of applause for Mayor Kevin L. Faulconer and industry leaders who fostered a better understanding of how powerful innovation's impact is in the region. 

EDC's Recommended Strategies

The report calls for some new strategies that are beneficial for enhancing current R&D success to keep growth buzzing. 

1.Build supporting coalitions with industry leaders and institutions

2.  Drive opportunities to retain, expand and attract companies and investment to create global competitiveness. 

3. Ensure intellectual, academic, and human capital is available to fill needed spots. 

4. Work on getting out the message for policy makers and the public.
Meierrieks, D. (2014). Financial development and innovation: Is there evidence of a Schumpterian Innovation Nexus? Annals of Economics and Finance, 15 (2).

San Diego Regional EDG (2015).  The Economic Impact of San Diego’s Research Institutions.

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