BIO 2014: Two Cities, One Economy, and a Unique Innovation Ecosystem

6/25/14

Editor’s note: Mary Walshok will discuss how Mexican policy is using public-private partnerships to spur biotech innovation and investment in a breakout session Thursday at the BIO 2014 convention in San Diego. —BVB

One of the under-appreciated features of the San Diego innovation ecosystem is the increasing significance of its proximity to one of North America’s most dynamic manufacturing hubs, Baja California, and in particular, Tijuana.

In 2006 my research team at UC San Diego published a bilingual report on the potential synergies between the innovation economy on the U.S. side of the border and the increasing manufacturing capabilities, engineering, and technical skills on the Mexican side. The cluster of manufacturing expertise includes companies in Tijuana that specialize in producing medical devices, pharmaceuticals, and electronics.

This report received significant regional and national attention and contributed directly to the subsequent rebranding of this region as “Cali-Baja.”

Eight years later, in “From Border Barriers to Bi-national Promise,” a recently released report co-authored with the Creative Class Group led by Richard Florida, we have reaffirmed the extent to which the innovation capabilities in San Diego and the manufacturing capabilities in Baja have expanded and diversified.

We identified numerous pockets of innovation and entrepreneurship in Tijuana that parallel the promising companies incubating in San Diego. We also suggest a scenario for our regional innovation ecosystem that embraces capabilities we possess in the San Diego-Tijuana region that are unparalleled in any other innovation hub in the Americas.

As we stated in the report’s introduction, “Imagine a location that provides all of this:”

—Soup-to-nuts product development, from initial concept, laboratory research, and prototype design, to manufacturing and distribution—all within the reach of a short car trip, instead of spread across the world.

—A customer base that has literally doubled within the past two decades—and that has increased both its diversity and its disposable income.

—Access to a youthful talent base that is multi-cultural, bilingual, and driven to become real players in the notoriously spiky tech world.

—An emergent “aerotropolis” that is globally connected like no other place in the U.S., not just by air, but by sea, rail and highway. Among other things, a privately funded cross-border bridge and U.S. Customs facility (with ground-breaking on the American facility expected to begin this year) would make it easier for American travelers to park their cars in San Diego while flying in and out of Tijuana’s international airport.

—A rapidly evolving ecosystem for high-tech and biotech startups, with conduits to Silicon Valley in the north and to Mexico’s growing investor class in the south.

—A playground for the creative class, with beaches, boating, mountain biking, and scenery—and a menu of cultural and culinary choices that is surprisingly generous and broad.

In the six years since San Diego hosted the 2008 BIO Conference, stunning biotech innovations have been unleashed here in personalized medicine, genomic sequencing, and immunotherapy, to name just a few.

Today, it is estimated that San Diego County has about 450 biotech companies. Yet the growth in advanced manufacturing on the Mexican side of the border—particularly in pharmaceutical and medical technologies—has been equally significant.

This was recently documented in a report prepared by David Shirk at UC San Diego’s Center for U.S.-Mexican Studies entitled “Jobs without Borders: Employment, Industry Concentrations and Comparative Advantage in the Cali-Baja Region.”

The report underscores the breadth and depth of technical and manufacturing know-how in our region and concludes, as did our report with Richard Florida, that there is more expert capacity in the region than we realize, and that Baja California’s labor force is a key untapped resource to the competitiveness of the region.

Our shared capabilities in audio-visual and IT manufacturing, coupled with medical equipment and supplies, which is now the region’s fastest-growing manufacturing sector, represent a unique regional advantage.

Very few geographic regions in the world offer the advanced level of manufacturing capabilities and paradigm-shifting research activities that exist within the San Diego-Tijuana binational region.

My presentation at the BIO Conference tomorrow will delve into the complex ways in which these complementary capabilities have developed in two border cities over the last decade. They differentiate us from all the other biotech ecosystems in the world.

Mary Lindenstein Walshok is co-author with Abraham J. Shragge of "Invention & Re-Invention: The Evolution of San Diego’s Innovation Economy." She serves as UC San Diego’s associate vice chancellor of public programs, dean of UC San Diego Extension and is an adjunct professor of sociology. Follow @

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