Innovation Report Details Ups and Downs of San Diego Startups

Xconomy San Diego — 

San Diego’s innovation economy continues to move mostly sideways, with venture capital investments plunging and employment improving slightly among high technology and life sciences startups, according to a report today from Connect, the nonprofit group for technology and entrepreneurship. The mixed signals also showed San Diego’s merger and acquisition activity soared and federal grants to researchers strengthened during the last quarter of 2010.

A .pdf file for the full report can be downloaded here. My breakdown of the highlights and leading indicators for San Diego’s innovation economy follows:

—Eighty-four high tech and life sciences startups were formed in the region during the fourth quarter of 2010, a 13 percent increase from the same quarter of 2009, when 74 new companies were started. For the year, the report counted 277 new startup companies, which was a 13 percent decline from the 319 startups founded in 2009.

—Mergers and acquisitions jumped substantially across California in 2010 compared to the previous year. The value of reported San Diego M&A deals that closed during the fourth quarter was almost $1.7 billion. The nearly $4 billion in M&A deals reported here in 2010 was more than double the value of deals reported 2009. In Southern California, the M&A market in 2010 totaled more than $40 billion—almost seven times more than what was reported in 2009.

—Combined funding from the National Institutes of Health and the National Science Foundation for scientists in the San Diego area increased in 2010 to $42.5 million per 100,000 residents from $34.4 million per 100,000 in 2009. The report says that makes San Diego one of the state’s top innovation economies, based on federal grants received per capita. Total NIH financing for this region was almost $1.2 billion in 2010, a 28 percent gain from 2009, while NSF support amounted to almost $126 million, a slight increase from 2009.

—In the fourth quarter, San Diego got $278 million in NIH backing, and more than $31 million from the NSF.

— San Diego innovation companies received almost $32 million in Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) program grants in 2010, according to new data from the Department of Defense.

As we reported in January, venture capital investors put … Next Page »

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One response to “Innovation Report Details Ups and Downs of San Diego Startups”

  1. Gary P. says:

    The real issue is that high tech from the software side has been leaving the San Diego area.
    We have never been able to get VC funding in SD and for colleagues of mine that have they had a requirement to move.
    SD is so focused on the bio pharma world that they forget there are many other “facebook” types out there.