The Davis Dilemma: New Energy for Innovation, But Where to Grow?

5/15/14Follow @wroush

The Sacramento-Davis Corridor: Seeding an Innovation Cluster

Xconomy presents a two-part series on efforts to transform the Sacramento region into a major new innovation cluster. Part 1, published on May 14, looked at changes in Sacramento that could make the city more hospitable for technology entrepreneurs. Part 2, today, focuses on nearby Davis—home to the University of California's leading agricultural campus—and its role as an innovation engine for the region.

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the accelerator’s headquarters—an old downtown Victorian house called the Hunt-Boyer Mansion—as well as intensive mentorship and fundraising help. Barobo was the first startup to graduate from the accelerator, in 2012.

“We essentially formed our company culture there,” Ryland says. “The overarching mission is to spin off companies that will generate good jobs for the city. And I think they have done a good job with that, since we are their first example.”

The Grump and the Champion

Barobo now has a staff of 12 and sells the $190 Linkbot modules to schools from its office in an old Masonic lodge on G Street. Ryland says he’s happy with the company’s downtown location. “It’s a college town; we’re within a block of about seven Thai restaurants,” he jokes.

But if Barobo were to grow from 12 employees to, say, 120, it would probably be forced to look elsewhere. And the more startups emerge from UC Davis and Davis Roots, the more entrepreneurs will butt up against the city’s strict anti-growth policies.

Davis Roots, in the historic Hunt-Boyer Mansion in downtown Davis, is a non-profit business accelerator that aims to increase the number of high-growth companies based in the city.

Davis Roots, in the historic Hunt-Boyer Mansion in downtown Davis, is a non-profit business accelerator that aims to increase the number of high-growth companies based in the city.

To TechDavis’s Morris, that’s a waste. “To have a major research university like UC Davis underperforming because it’s choked off from growth—that is just an ethical issue for me,” he says. “I’m all for preservation, but you’ve got to balance that against the billions and billions of dollars that have been put into that place, and making sure that is effectively leveraged for society. UC Davis is not a private amenity for the people of Davis. It is a world resource.”

Fixing the space problem is part of the job for White, the city’s chief innovation officer. “My charge here in Davis is to do three major things,” White says. “First, illuminate the existing tech culture. Who is here, who is growing, who is coming, and if somebody leaves, why? Second, better engage with the university. Dushyant [Pathak] has been really good at trying to open up the doors there. Third, and most interesting for economic development, figure out what are the land use factors that either encourage or block future technology development.”

There are plenty of cities with a CIO, but the “I” usually stands for Information, not Innovation. White, who used to be director of economic development for the City of Livermore, got the job as the result of a big push from TechDavis, which is made up of a group of senior technology entrepreneurs.

Morris is that group’s main instigator. He left UC Davis in 2001 to start Sagres Discovery, a Davis-based cancer research company that was eventually sold to Chiron. For the last few years, he’s been working to set up a seed-stage investing fund called Capital Corridor Ventures, and along the way, he says he came to realize that UC Davis’s entrepreneurship programs wouldn’t succeed without parallel efforts by the City of Davis and the local business community.

“Davis’s capabilities in terms of being a meaningful participant in creating an innovation economy were very limited,” Morris says. One way to balance things out, Morris says, was “this idea of bringing in someone as a champion.”

White had built a reputation in Livermore as a “regional superstar in tech-focused economic development,” Morris says. To recruit him, Morris and other TechDavis members hit the fundraising trail, eventually collecting enough money from local businesses to pay half of White’s salary for three years. The city agreed to pay the other half, and White was appointed in March 2013.

White affectionately calls Morris “the epitome of the grumpy old faculty member who has figured out that we can’t just keep putting our heads in the sand and hoping for the best.” He applauds Morris not just for engineering the deal, but for using some of the early money raised by Capital Corridor Ventures to fund Davis Roots and other entrepreneurship programs.

To start addressing the space crunch, White is lobbying for the construction of a research park on a 200-acre parcel of city-owned farmland off Mace Boulevard on the east side of Davis. Though it’s officially slated for preservation, White says the land is needed to accommodate growing Davis-based companies like Novozymes, machine tool maker Mori Seiki, and submersible-robot maker FMC Technologies Schilling Robotics.

This city-owned farmland just east of Mace Boulevard in Davis is being considered for development as a research park. City residents would have to approve the project by popular vote.

This city-owned farmland just east of Mace Boulevard in Davis is being considered for development as a research park. City residents would have to approve the project by popular vote.

To make the research park idea fly, White will have some persuading to do. Under Measure J, a local ballot measure approved by Davis voters in 2000 and renewed in 2010, the city can’t annex open farmland for office, industrial, or other uses without majority voter approval. The city’s residents have twice voted down exactly such proposals.

“There’s value in keeping Davis compact; that’s a really strong value in this community, wanting to limit growth,” White acknowledges. “But we are only giving up a little bit” with the Mace property, he says. To ease residents’ minds, he notes that the property is surrounded by federal conservation easements that would rule out any further expansion.

Ironically, the university owns vast tracts of farmland west of the existing campus: more than 5,000 acres, enough to pick up the whole city of Davis and set it back down again with room left over. That makes it the only campus in the University of California system with significant room for expansion. But the land is used to grow research crops, and nobody really wants to subtract from the resource that helps make UC Davis one of the world’s top agricultural schools.

That’s what leads Morris back to the idea of an east-side research park, which he says would help attract existing companies to Davis as well, the same way the Stanford Research Park did in Palo Alto. “Rather than build home-run companies from scratch, it would be a hell of a lot faster to bring in existing operators that need a footprint near UC Davis,” Morris says. In 2010, for instance, Genentech opened a research facility with 120 PhD researchers just 10 miles away in Dixon. “That wouldn’t have happened if we had been able to move faster and have land ready and waiting.”

White, for his part, is optimistic about Davis’s future. One measure of interest in further growth is his own schedule, which is a constant rush of meetings with venture capitalists, bankers, and entrepreneurs from places ranging from the Bay Area to Chico, 100 miles to the north. “Rob has already been a game changer—Davis is now light-years beyond where they were when he started,” Morris says. But White insists the real metric of his success will be whether Davis-based businesses are able to attract more outside investment.

Other Sacramento suburbs like Roseville, Elk Grove, and Folsom will likely follow Davis’s lead and appoint their own chief innovation officers within the next year, White predicts. Of course, they’ll have different, sometimes easier challenges to deal with in their corners of the capital region. Land use won’t be such a touchy issue, since most cities haven’t boxed themselves in the way Davis has. Then again, they won’t have the advantage of a world-class research university in their backyard.

The Agtech Opportunity

Let’s say Morris is right that a thriving business environment in Davis is a prerequisite for growth in the larger Sacramento region. It would be fair for an outsider to ask exactly how Davis can contribute to that growth—and, perhaps, help solve some of society’s big problems.

One answer lies in sustainable agriculture, but that will be a long road. Over the next 50 years, the world’s population is expected to rise to 9.5 billion, requiring major increases in agricultural production at exactly the time when climate disruptions will start to exacerbate an existing shortage of fresh water and arable land. As it happens, UC Davis researchers have long been studying pest- and drought-resistant crop strains; that’s part of the reason eight of the world’s top 10 seed companies have offices in or around Davis, according to Francois Korn, head of a Davis non-profit called SeedCentral.

Indeed, agricultural entrepreneurs in California have the opportunity “to lead in things like climate change that others are not focused on, but will become a real focal point,” says UC Davis’s Justis.

To seize that lead, UC Davis last year set up the World Food Center, which Katehi said will be “the world’s preeminent center where scholars, policy experts, government officials, media, and others come for research, guidance, and direction on all food-related issues as they pertain to our planet.” Plant biologist Roger Beachy, formerly CEO of … Next Page »

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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  • mffitzgerald

    I had no idea that MIT and Harvard were not in the top 20 universities in terms of outside research dollars pulled in.