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To keep up with growth-happy cities like Boulder and Austin, San Diego needs to build up its own promising “new economy.” The good news is we have many of the tools at our fingertips.
When it comes to building up new economies, Boulder and Austin are both lapping San Diego.
By creating and supporting a wave of young companies, these cities attract big investment dollars and some of the most talented people from around the world. This kind of growth isn’t hard to copy. There’s information out there, but to make it happen in San Diego, it’ll need the support of the entire community.
But let’s break down what we mean by “new economy.” People throw around this phrase, but few understand it, or know what to do to with it.
To grasp the new, we first need to look to the old. Economic growth is often measured by how many big companies a city gets. The assumption is that big companies bring lots of jobs and, thus, growth.
Jason Faberman of the Federal Reserve Bank of Chicago is one of many economists floating a different idea. Faberman’s analysis found younger, more innovative companies lead to more job creation and economic growth. He says companies younger than four years are producing the strongest job growth. In fact, they’re growing twice as fast as larger, older companies.
San Diego hasn’t been faring well in competing with other cities for new facilities by big, established companies. Tough economic times have made it especially hard to offer tempting incentives. Two of San Diego’s hottest, most successful companies, Websense and Active Network, just packed up and headed to Austin. I drove by the old Websense building the other day – kind of sad, really.
So we need to refocus. How does San Diego compete and offer its own promising “new economy”? It becomes a place where people build companies. The good news is we have many of the required tools at our disposal.
This kind of economy requires entrepreneurs, innovative technologies, talent and investment. San Diego is well positioned on these fronts. But we need to make three key shifts in our cultural mindset:
Make the basics of starting a new business easy. It shouldn’t be such a slog for new companies to file at the state level, get a permit or find office space. We need to clear these starter hurdles, fast.
Understand that failure is OK. Innovative businesses that develop new products have the strongest potential to grow, but an even bigger chance of failure. We need to welcome these failed entrepreneurs back into the business community. This is the culture in Silicon Valley and San Diego needs to get on board.
Get over the inferiority complex. San Diego seems to think it needs to be Silicon Valley. That’s just not going to happen. We’ve attracted a host of people with amazing brains and loads of talent who want to be in our fair city. They want to build their businesses here, have families here, hire talent from here — be successful here. We just need to let them and help them however we can.
Economic growth can’t be measured by the number of looming cranes downtown. And we don’t need to arm wrestle Texas Gov. Rick Perry. We simply need to embrace the good thing we have. Invest in it, cultivate it, promote it. If we can do that, we’ll gain our own experiential understanding of what a buzzy “new economy” really is.