Fifty years ago, the city leaders of San Diego made a decision that turned out to be a watershed idea. The federal government gave the city the title to land that was housing then-unused Navy barracks, which were then converted into space for scientific research and product development. Property that could have become waterfront condos instead grew to house the Salk Institute and the University of California, San Diego.
It is the resulting convergence of more than 50 research institutions—and intellectual capital—compressed into a 2-mile radius that is the driving force behind San Diego’s growth as a high-tech, biotech—and now clean-tech—hub. In the not-too-distant future, for example, San Diego and the nearby Imperial Valley could become a leading producer of renewable fuels from algae and other bio sources, with implications for the local, and global, economy. And Bank of America, since providing an early $100,000 grant for a project to analyze the potential for clean tech in San Diego, has been actively involved in supporting the growth of companies, and the creation of new jobs, in the city.
Thanks to the efforts of San Diego’s former mayor as well as consortiums of scientists, companies and investors, the excitement around clean technology is palpable. The hope is that clean technology could help the country lessen its reliance on fossil fuels and transition to an economy based on renewable energy sources. But what is getting attention these days is that the emerging industry has generated new jobs, even during the economic downturn.
Lisa Bicker, Former CEO/President of CleanTECH San Diego, a non profit industry group, explains the industry’s potential for job generation. “What’s special about clean technology,” she says, “is that you have the opportunity to solve our most pressing environmental and human challenges and, at the same time, create huge economic engines and economic prosperity.” She notes that Bank of America and other financial institutions have played a critical role in seeding early-stage companies, such as those transforming algae into fuel, making sure that they have the support and infrastructure to grow. She says, “A few years ago, a few of us went to Bank of America, which has been a tremendous partner for us here in San Diego and said, “We have an idea. We have a new industry, it’s very young and we need some support.’ ”
While CleanTECH San Diego is a relatively new organization of academics, business and financial leaders, the “culture of collaboration” is not new in San Diego. Almost twenty-five years ago, a group at UC San Diego launched CONNECT to “accelerate the innovation economy” in San Diego. Today, CONNECT is still bringing together researchers, entrepreneurs and investors and helping to provide access to capital. Says CEO Duane Roth, “We help start new technology-based businesses. We figure out how to take discoveries and turn them into products.”
Today, thanks to CleanTECH San Diego, CONNECT, and the San Diego Regional Economic Development Corporation, San Diego is becoming one of the country’s largest clean tech clusters with over 750 clean tech companies in the area. While earlier collaborations focused on defense, biotech, and wireless, the latest to get attention and funding is bio fuels, specifically the opportunity to make fuel and other products from algae. Julie Meier Wright, Former CEO of EDC, explains how the elements are coming together: “Our research centers have discovered the potential for algae as a fuel. And our partner in Imperial Country has abundant land where we can scale for commercial benefit.”
Bank of America’s involvement in San Diego’s emerging industries like biofuel is a long one, and one that spans the investment spectrum. Rick Bregman, market president for Bank of America Merrill Lynch in San Diego, says that the bank first seeds companies that are just getting off the ground, funding them through the bank’s venture capital arm. Then as the companies begin to grow, the investment banking arm helps them access capital via public and private equity, and finally, as they become more commercialized and generate positive cash flow, the bank helps with borrowing. And, finally, when they seek to expand into international markets, Bank of America can help them manage that transition. “It really comes down to being a strategic partner for a company as it grows,” he says.