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SAN DIEGO CLUSTER STUDY GIVES REGION HIGH MARKS FOR BUSINESS INNOVATION, URGES EFFORTS TO RAISE AVERAGE WAGES

SAN DIEGO, CA -- The San Diego region earns a "star" in the area of
technological innovation, especially in the biotechnology and pharmaceutical
industries, Harvard Business School Professor Michael Porter reported today
(April 5) in a presentation of findings in the new San Diego Clusters of
Innovation Initiative.

At the same time, Porter noted that, despite good job growth, the region
will face a challenge to maintaining its innovative capacity if it does not
address the disparity between average wages in the region and the cost of
living.  He noted that "San Diego has an average wage that is comparable to
the national average, but in a region with a "California cost of living,"
which is 23 percent higher than the national average.

Although the final report on the San Diego study, which is the first in a
series of regional studies that are part of the Council on Competitiveness'
national Clusters of Innovation project, will not be released for a few
weeks, Porter offered highlights focusing on the region's accomplishments,
opportunities, and challenges.  Porter and Duane Ackerman, chairman and CEO,
BellSouth Corporation, are co-chairs of a steering committee of national
leaders working on the initiative, which seeks to define best practices and
identify models for successful clusters.  As defined by Porter, an
international expert in the field, a cluster is a geographic concentration
of competing and cooperating companies, suppliers, service providers, and
associated institutions, including government and universities. 

Porter noted particularly successful clusters in the San Diego region in
both biotechnology/pharmaceuticals and the communications industries.  He
also cited great potential for the growth of clusters in other sectors of
the economy.

Among factors boosting the region's economic growth, Porter noted
considerable federal support for research and development as well as a high
level of state support for the University of California, San Diego.  In
addition, Porter said that the region has been "unusually rich" in
collaborations fostered by formal and informal networks and public and
private sector groups such as UCSD CONNECT, the San Diego Regional Economic Development Corporation, the San Diego Chamber of Commerce, and the San Diego Science and Technology Council.  Other assets include strong "entrepreneurial attitudes" in the academic community, numerous research institutes in several fields, a large number of scientists and engineers in the workforce, and a good quality of life.

At the same time, the region faces challenges.  In addition to the high cost of living, these include limited management and marketing talent, high business and personal tax rates, growing traffic, and a need for improvement in technology transfer from universities to business. 

Finally, the report indicates several opportunities for the region, including increasing the growth of clusters in such areas as hospitality and tourism, boosting interaction among different clusters, enhancing the economic role of the military, and taking greater advantage of economic links with Mexico.

Future regional reports will focus on Atlanta, GA; Raleigh-Durham-Chapel Hill, NC; Pittsburgh, PA; and Wichita, KS.

The report was underwritten by the James Irvine Foundation, the Jacobs Family Philanthropic Fund, and QUALCOMM Incorporated. Randall Kempner, ontheFrontier, and Kurt Dassel, Monitor Group, were the report’s principal authors. John Yochelson and Alan Magazine at the Council on Competitiveness provided project oversight. Robert Dynes, UCSD; Irwin Jacobs, QUALCOMM, Inc.; Duane Roth, Alliance Pharmaceutical Corp., and Julie Meier Wright, San Diego Regional Economic Development Corporation served as advisors to the project.