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Downtown: The innovation economy’s next frontier

By Kris Michell | Downtown Partnership News

[Editor’s Note: This month’s column — co-written by Kris Michell and Mary Walshok —previously ran as an opinion piece in the San Diego Union Tribune on April 22. Find it online at tinyurl.com/h384xwt.]

Innovation is all about blazing new trails and for the past 40 years, San Diego has been at the forefront of discovery, pioneering game-changing scientific research and technological advances. As the region looks to its future, there is little doubt that San Diego will continue to lead the way in a whole host of fields from life sciences to engineering to computer software. What will be different, however, is the map of where much of that innovation will occur.

Kris Michell, President and CEO of SDDP

Kris Michell, President and CEO of SDDP

Throughout San Diego’s history, innovation has centered around a cluster of research institutions on the Torrey Pines Mesa. While it is clear that the dozens of research institutions on the Mesa will continue to shape our economy, it is equally clear that Downtown San Diego is poised to be the next frontier of innovation because of the convergence of basic science and computer science.

The reason is simple: Talent is what drives San Diego’s economy — and it always has. When the defense industry fueled our regional growth, it was about luring physicists. As we pivoted toward life sciences and wireless communications, it was about recruiting top-notch biologists, chemists and engineers.

Now, in the 21st century it is computer science — especially software — that is delivering breakthroughs and applications in all scientific, social and business spheres.

So how do we attract these computer scientists and software engineers? We create an environment in which they want to live and work.

And now more than ever, what these tech and creative types in the millennial generation want is an urban environment where they can have diverse social interactions, where they can walk and bike to work, shops, restaurants and cultural amenities.

This is not just marketing hype: It is what the data shows.

Over the last year, the Downtown San Diego Partnership and UC San Diego Extension have conducted exhaustive research into the economic drivers of the region’s urban core and what those mean for our continued prosperity.

The data is clear: To attract creative millennial talent, communities need to provide the right type of work environments coupled with an unparalleled quality of life. The Nielsen Company, for instance, found that 62 percent of millennials prefer to live in mixed-use communities like those found in urban centers and they are currently living in these urban areas at a higher rate than any other generation.

Downtown San Diego mirrors this national trend. Of the 34,550 people living in Downtown, millennials are the largest demographic group, making up a third of the total population.

Those who dwell in Downtown San Diego are also among the most well-educated in the county, with more than half holding a college degree. The average salary for Downtown residents is around $73,000 — far higher than the regional average.

There are also more than 111 tech startups in Downtown, which translates into 15.34 startups for every 10,000 people. On a countywide basis, there are just 1.35 startups per 10,000 people. Of those who live Downtown but work elsewhere, almost two-thirds said they would prefer to work at a Downtown location.

The reason Downtown is able to start as well as attract innovation companies and the talent needed to grow them is because it offers the urban experiences and types of social connections so many young people are seeking. Downtown is a “walker’s paradise” with almost 19 percent of all Downtown residents walking to work. This walkability also makes it easy to access all the amenities the urban core has to offer, including more than 90 cultural institutions and 20 parks.

Downtown San Diego also still holds the promise of the “California Dream” — representing an affordable alternative – both in housing prices and office rents, which can be as much as 50 percent less when compared with neighborhoods in such cities as Los Angeles and San Francisco.

The fact is that Downtown San Diego and the surrounding dynamic neighborhoods are a millennial magnet needed to move our innovation economy forward. But while the data speaks to the achievements and capacity of Downtown, the narrative about our urban core has not kept pace.

The good news is that civic and business leaders understand Downtown’s promise and are designing programs to ensure the Downtown region is on the map as the innovation economy’s next frontier.

—Kris Michell is president and CEO of the Downtown San Diego Partnership. Walshok is associate vice chancellor for public programs and dean of Extension at UC San Diego.

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