San Diego’s Connect Takes Offensive, Sets Agenda for Stoking the Region’s Innovation Economy

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that such elite institutions represent one of the few remaining places in society where the riskiest type of early stage innovation can take place, with funding provided primarily by the federal government in the form of basic research grants.

He contrasts such publicly funded research institutes with other business models for technology innovation that have faltered. He says the corporate model of technology development at companies like Pfizer and in places like Xerox PARC has faltered under shareholder pressures, and by “management by objective” business practices that shun risk-taking and stifle inventive creativity. The venture capital model also has faltered, according to Roth, because the VC model “was fueled by enthusiasm for throwing as many things up on a wall as you can. You’ll end up with a few winners, and many, many losers.”

As a result, Roth says the five initiatives Connect is undertaking are intended primarily to encourage the formation of more elite research institutes in the region. “My model starts with a tremendous amount of research here in San Diego,” Roth says. “Think about it as [an] incubator of products, rather than an incubator of companies…What I’d like to do is have Congress approve $5 billion in federal funding to match what startups and entrepreneurs can raise in venture funding.” He describes the funding as “pre-venture money, done in a multi-risk-reduced kind of way… So the federal government becomes an investor in early stage innovation.”

The intiatives are:

—Pursue additional federal funding, along with other funding sources, to spur research in specific fields and as an alternative early stage funding model to address what Roth calls the “valley of death”—the gap between invention and early-stage commercialization.

—Appoint a full-time lobbyist in Washington D.C. to represent San Diego and advocate for research funding.

—Support the creation of new research institutes in San Diego, and help to recruit elite scientists. For example, Roth says Connect could help researchers’ spouses find jobs in the region.

—Create a regional a seed fund loan program as well as a program to help local researchers use patents to protect their discoveries until private resources become available.

—Promote the development of San Diego technology clusters in specific fields, including wireless health, cyber security, autonomous robotics, contract services, and sports innovation.

Roth has said the initiatives will require more than $10 million, which Connect has begun to raise from both private and public sources. The non-profit organization, which has an annual budget of about $3 million, has already hired a new full-time vice president to implement the initiatives.

At a time when venture capital investments in San Diego have fallen to the lowest levels seen in a decade or more, Roth says, “We’re finally doing something that is offensive—not defensive. And I think this gives us a chance to lead.”

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