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 Global Institute for Food Security in Saskatchewan, Canada, was named last fall to head the effort, but he’s only been on the job since January, so there’s little to report so far about how the center plans to stimulate economic development in the region.

At the Child Family Institute, meanwhile, there’s already a similar program called the Sustainable AgTech Innovation Center, directed by former Ideo product designer Bob Adams. He says his goal is to tease research out of the university and connect it with entrepreneurial activity, while building a realistic set of expectations on the part of investors and other partners.

“The margins are lower and the time frames are longer” in agriculture, Adams says. He points to one project by Anita Oberbauer, chair of the Department of Animal Science, to use milk from the university’s goat dairy to make artisanal goat cheese for local markets; it turns out goat cheese can be produced with far less environmental impact than cheese from cows. Getting more dairies to switch to goats would be a tough sell, Adams acknowledges; so while Oberbauer’s idea for teaching more cowhands how to make chèvre could have high impact, it “will take a different type of patience from a typical technology startup.”

The Robert Mondavi Institute for Wine and Food Sciences houses UC Davis's  Department of Viticulture and Enology. Julian Alston, director of the institute's Center for Wine Economics, studies policies that could mitigate damage to wine grapes from from pests, diseases, and climate change.

The Robert Mondavi Institute for Wine and Food Sciences houses UC Davis’s Department of Viticulture and Enology. Julian Alston, director of the institute’s Center for Wine Economics, studies policies that could mitigate damage to wine grapes from from pests, diseases, and climate change.

Back in Sacramento, SARTA, the tech-company advocacy group, has picked agtech as its newest “vertical” focus area. Oleg Kaganovich, who was the founding CEO of SARTA back in 2001, is now the head of its AgStart program. He says he wanted to get involved in solving the “food desert” problem in poor neighborhoods after returning to Sacramento from a stint in Saudi Arabia as the head of venture programs at King Abdullah University of Science & Technology.

“I spent time in an actual desert, and was very aware that in some parts of the Gulf, 80 to 90 percent of their food is imported,” he says. “Then I got back to California, and realized that in many neighborhoods the only food within walking distance is at a gas station or a fast-food restaurant. I’m compelled to try to do something.”

At AgStart, Kaganovich has identified almost 70 agricultural technology companies in the region, from seed breeders to biofuel startups to equipment makers. There’s a hope that the cluster will find new business opportunities around sustainable farming and help solve food challenges globally. “The domain expertise in food and ag innovation is second to none, but outside of the industry it’s been a little bit of a well-kept secret,” Kaganovich says. “It was time to not only put together a platform to let everyone else know, but to develop that community.”

SARTA has identified nearly 70 agtech startups in the Sacramento region, many of them clustered around Davis and nearby Woodland. See interactive map at http://www.sarta.org/agstart/AgTechMap.html.

Many of the Sacramento region’s agtech companies are located in Davis and nearby Woodland. See an interactive version of this map at http://www.sarta.org/agstart/AgTechMap.html.

Reaching Critical Mass?

Peter Van Deventer, the board chairman at SARTA, says that AgStart is an important example of the organization’s shift from advocacy into “enablement”—connecting entrepreneurs to the real resources they need to build their businesses. “AgStart, CleanStart, MedStart are identifying and coagulating these markets into something meaningful,” he says. “Sometimes you don’t realize you already have critical mass in town.”

To drive home the point, SARTA is using Google Maps and database software from a Portland, OR, startup called BatchGeo to show the locations of every agtech, cleantech, and medtech company it can find in the Sacramento region. If you zoom out far enough in one of these maps, the colorful froth of pushpins gives impression that the capital area is bubbling with startup activity. But once you zoom back in, you start to see that many of these companies, unlike their peers in compact hubs like San Francisco’s SoMa district, are miles away from their nearest neighbors. And that may be the clearest sign of the need for more growth. In the world of innovation, you don’t get serendipity without proximity.

Perhaps wisely, many of the people I spoke with in Davis and Sacramento have begun to look to places other than San Francisco and Silicon Valley for inspiration and points of comparison. One of their favorite models is Austin, TX, which has a similar metro-area population but many more high-tech companies filling up its map. “If you ask me what does Sacramento look like in 10 years, I think its viability as an innovation ecosystem starts to approach a place similar to Austin,” says White.

“Austin is a few years ahead of us,” adds Crawford, the venture capitalist. “But they’d better look in the rear-view mirror. For the title of next great technology market, I think Sacramento is closing in on them quickly.”

Frankly, that seems like a bit of a reach. Looking to Xconomy’s network of nine regional bureaus, a few other, more realistic models come to mind. Sacramento may be to Silicon Valley roughly as Olympia, WA, is to Seattle, or as New Haven, CT, is to New York, or as Worcester, MA, is to Boston: that is, destined always to play second fiddle, but close enough to be a plausible alternative home for startups and their workers, and equipped with some nice advantages, such as a lower cost of living. Or, who knows, the Sacramento region could emerge as a new cluster in its own right—but a lot of things have to happen first, and it will take time.

In any case, Crawford’s brash enthusiasm is probably useful in Sacramento, where a more Midwestern reserve has long been the rule. If it were to catch on, that would be the best sign of all that the capital region has a good chance to end its innovation drought and emerge as a real hub for entrepreneurship.

It’s important to change how other people see the region, but “to some extent we also need to change how we see ourselves,” says SARTA’s Meg Arnold. “The stories you tell about yourself are what you come to believe is true.”

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.