The importance of diversifying the local economy became obvious in San Diego during the 1980s, as the ebb in defense spending exposed the area’s collective dependence on Atlas rockets and cruise missiles, along with the payroll for the Navy’s Pacific Fleet. But the path forward also was obvious—especially after Ely Lilly acquired San Diego’s Hybritech for $480 million in 1986. San Diego’s biotech cluster was born in a confluence of opportunity and necessity.

Since then, San Diego has prided itself on its innovations in life sciences, wireless communications, and other technology clusters. But these days, there is a pervasive sense that San Diego’s innovation economy is flagging—and might even be faltering. The hometown venture capital firms that helped fuel this area’s extraordinary expansion during the booming 1990s have largely evaporated—and this time the path forward is far from obvious.

So Xconomy asked some of San Diego’s best business minds to participate in an “on the record” dinner discussion on December 8, as a way to generate ideas for boosting San Diego’s innovation economy.

In attendance at the dinner—which was hosted by National University and sponsored by Ernst & Young, Latham & Watkins, and Silicon Valley Bank—were Linden Blue, vice-chairman at General Atomics; Hui Cai, vice president of business development at WuXi AppTec; C.J. Warner, chief operating officer at Sapphire Energy; Erik Bruvold, president of the National University System Institute for Policy Research; Miles Kirby, a senior director of business development at Qualcomm; Andy Pelletier of Silicon Valley Bank; Hiep Pham, CEO of TipCity; Bill Rastetter, a partner at venture firm Venrock; Faye Russell of Latham & Watkins; David Titus of Windward Ventures and the San Diego Regional Economic Development Corp.; Jim Waring, board chairman at Cleantech San Diego; Claudio Arriola, regional president of Canieti Noroeste in Tijuana, Mexico; Doug Regnier, partner at Ernst & Young; Katy Frankel, tax partner at Ernst & Young; and Bob Watkins of R.J. Watkins & Co. Executive Recruiting Consultants (and the San Diego Regional Economic Development Corporation). Xconomy publisher Steve Woit, business development associate Michele Gerus, San Diego editor Bruce V. Bigelow, and San Francisco editor Wade Roush also attended. Our conversation circled several areas of concern:

—Access to capital remains the single biggest issue for seed-stage startups in San Diego. Venture funding is down 67 percent from its peak of $541 million in the first quarter of 2009, descending to $173 million in the third quarter of 2010, according to Bruvold. Innovators and entrepreneurs continue to launch promising startups, but they are wanting for venture capital.

—Hand in hand with the decline in local venture investing has been the shrinking size of the area’s indigenous venture industry. In 1996, according to Titus, there were three general partners with investing authority residing in San Diego. “Then we had this huge explosion so that by 2001, there were roughly 30 general partners who lived and worked in San Diego who had the ability to write checks, so you had this explosion of deals,” said Titus. “That has shrunk back now to where, arguably, there are maybe 10 partners resident in San Diego who can write checks.”

—In Titus’s view, the shortage of local venture partners in San Diego “has a huge impact on how many companies get funded.” But Venrock’s Rastetter disagreed, arguing … Next Page »

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In 2009, employment at high-tech companies either declined or stayed essentially flat in all of the cities Xconomy calls home, according to a study of the nation’s top 60 “cybercities” released this week by TechAmerica, a Washington, D.C.-based trade association for the information technology industry.

Though the underwhelming job data certainly accords with most people’s subjective experiences of the recession, there is a glass-half-full way of looking at it: the job losses weren’t as bad in Boston, San Diego, and Seattle as they were in most other places around the country. Between 2008 and 2009, high-tech employment nationwide fell by 195,607, or 3.2 percent. The decline in Boston was far milder—just 1 percent—and tech employment held steady in Seattle (though it declined slightly in neighboring Portland). The TechAmerica report found that San Diego actually added a small handful of jobs—500, an increase of 0.4 percent.

The situation was much worse, however, in Xconomy’s other two home regions, Detroit and the San Francisco Bay Area. Of all U.S. cities on TechAmerica’s top-60 list, Detroit was by far the hardest hit: an alarming 16,737 tech jobs evaporated there, representing nearly one-sixth of all tech employment in the region. The Bay Area lost almost as many jobs–16,147—but that represented only a 3.9 percent decline, thanks to the region’s much larger base of technology workers.

Keep in mind that these are 2009 figures, and don’t take into account any gains in employment that may have occurred in 2010. (It takes about 11 months for TechAmerica to compile its annual cybercities jobs report.) But with high unemployment endemic across the country—and likely to persist for years, according to economists—it’s likely that the trends called out in the report are still being felt.

Continue reading for some analysis of the city-by-city data from the TechAmerica report. Because the report sometimes counts cities within a cluster separately, I’ve recombined some of the numbers into aggregate statistics that represent Xconomy’s home cities more accurately. Specifically, TechAmerica counts San Francisco, San Jose/Silicon Valley, and Oakland as separate cybercities; I’ve recombined them into one. Similarly, the report gives separate statistics for Providence, RI, Worcester, MA, and greater Boston. I’ve put those numbers back together into something more representative of the New England technology cluster. And I’ve combined the Seattle and Portland, OR, statistics into a single Northwest category.

If you do all that, then some of TechAmerica’s rankings begin to make more sense. The report claims, for example, that New York City is the country’s leading center for high-tech employment, with 316,971 people working in areas like computer manufacturing, communications, software, engineering, technical services, and biotech R&D in 2009. But in aggregate, the Bay Area is larger, with 394,290 jobs, and so is the Washington, D.C-Baltimore area, with 369,782.

TechAmerica represents some 1,200 U.S. technology companies and was formed in 2009 from the merger of AeA (the American Electronics Association), the Cyber Security Industry Alliance, the Government Electronics & Information Technology Association, and the Information Technology Association of American. As part of its effort to highlight the importance of high-tech jobs to the overall economy, the organization has long produced an annual “Cyberstates” report contrasting high-tech industry growth in the 50 states. Three years ago, it also began publishing a sister “Cybercities” study focusing on the places within states where innovation is concentrated.

To their credit, TechAmerica’s analysts recognized that high-tech cities often spill across state lines—Boston, for example, extends all the way into southern New Hampshire, by the report’s reckoning, and New York City extends all the way into Pennsylvania. But I’d have argued for an even more liberal interpretation of cybercities, combining neighboring cities that have close ties. There’s obviously enormous interdependence, for example, between innovators and investors in San Francisco, Silicon Valley, and Oakland/Berkeley.

Here’s a look at how the country’s top 15 regions stack up in high-tech employment, after recombining individual cities:

1. Bay Area (Oakland + San Francisco + San Jose/Silicon Valley) 394,290
2. National Capital Area (Washington, DC + Baltimore) 369,782
3. New York City (including Long Island, Westchester County, northern NJ, and Pike County, PA) 316,971
4. Greater Los Angeles (including Orange County, Riverside, and San Bernardino) 289,847
5. New England (Boston + Worcester + Providence) 262,920
6. Northwest (Seattle + Portland) 211,005
7. Dallas-Fort Worth 174,848
8. Chicago 161,799
9. Philadelphia 134,235
10. Houston 127,760
11. Atlanta 123,582
12. San Diego 110,985
13. Minneapolis-St. Paul 98,583
14. Detroit 95,042
15. Denver 88,936

Continue to the next page for selected details on Xconomy’s home regions.

… Next Page »

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In William Gibson’s 1984 cyberpunk masterpiece Neuromancer, the hero Case lives in a near-future place called BAMA—the Boston-Atlanta Metropolitan Axis, aka the Sprawl, a giant city that has spread Coruscant-like across the whole eastern seaboard. (If it had extended to Orlando, maybe Gibson could have called it OBAMA.) But while this part of Gibson’s sci-fi dystopia may have seemed plausible in the 1980s, it’s a little less so today. Yes, cities are still dealing with the consequences of the mid-20th-century’s automobile-driven sprawl—but if anything, the big metropolitan regions in the U.S. today are contracting around the edges, not blurring into one another.

And once the cheap oil runs out, analysts like James Howard Kunstler argue, cities will have to get smaller yet. The future “will be much more about staying where you are than about being mobile,” Kunstler predicts. Unless there’s a miraculous advance in solar-electric vehicle technology, or the government suddenly decides to invest a couple trillion dollars to build a serious passenger rail network, it’s hard to see how he might be wrong.

But that’s just one side of the picture—the physical reality of freeways and suburbs and Wal-Marts. There’s another trend at work that’s erasing what I would call the mental boundaries between cities. That trend, obviously, is digital networking.

It’s a tired cliché to say that telecommunications technology is breaking down the meaning of geographical distance. People have been pointing this out since the advent of telegraphy in the 1840s. What I’m saying is a little more radical. Given today’s work styles and networking tools, information workers can be anywhere. It makes very little difference whether your software engineers or QA testers or telesales representatives are in Boston or Burlingame or Bangalore. In fact, it’s easier to send an e-mail or an instant message to a colleague 3,000 miles away than it is to get up and walk a hundred feet across your office.

Which means distributed teams can get the same amount of work done as concentrated ones—probably more, thanks to the planet’s rotation and the single most important invention of 1883-84, the division of the globe into 24 standard time zones based on Greenwich Mean Time. In effect, the world’s information workers all live in one giant city—a mental space where Gmail and Twitter are more important than parking garages and subway tunnels.

Which makes one particular strain of inter-city bickering all the more inane. Over the last few years, I’ve listened to endless arguments about whether New York or Silicon Valley or Boston or insert-your-favorite-city- here is the best place to be an innovator, find investors, hire engineers and salespeople, and grow a technology company. In Boston, people still wring their hands over why Mark Zuckerberg moved Facebook to Palo Alto. In Silicon Valley, meanwhile, people glance nervously over their shoulders at New York. Recently, in fact, there’s been an extended and entertaining kerfuffle over New York’s merits as a startup hub, involving, at various points, SpeakerText CEO Matt Mireles, Hunch and Founder Collective co-founder Chris Dixon, Flickr and Hunch co-founder Caterina Fake, Y Combinator founder Paul Graham (see 2:30 in this video), and AdGrok co-founder Antonio Garcia-Martinez. Dixon, Fake, and Graham think New York’s tech scene is exploding with cool startups and “ambitious ass-kickers,” and that it’s becoming an easier place to find angel or venture financing and engineering talent. Mireles and Garcia-Martinez, on the other hand, think that New York is expensive and elitist, that the angels and tech-focused venture firms are still few and far between, that Wall Street sucks up all the talent, that the city lacks decent engineering schools, and that New Yorkers are generally hustlers rather than builders.

It’s all beside the point. Regions have their distinct flavors, of course, but in the end, none of this affects the global pace of innovation, which depends on people and their ideas much more than their locations. Does anyone seriously want to argue that Google would not exist if … Next Page »

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Last week was another busy one for venture fundraising and acquisitions in San Francisco and Silicon Valley. Fortunately, I got a lot of help this week from my San Diego colleague Bruce Bigelow, who reported on several stories affecting the Bay Area.

—On Friday, Google confirmed earlier press reports that it had acquired San Francisco-based Slide, which makes social applications for Facebook, MySpace, and other social networks. Google didn’t say how much it had paid for Slide, which was founded by Paypal co-founder Max Levchin; reports put the price tag at $182 million to $228 million.

—I profiled Zendesk, the San Francisco-based help desk software maker that has bounced back from a user revolt this spring over price increases and is busy rolling out new features that make it easier for companies to stay engaged with their customers.

—In the second part of a long conversation with Kate Mitchell and Rory O’Driscoll, general partners at Foster City, CA-based Scale Venture Partners, I explored how the firm works with mid-stage ventures that have a proven idea but need to scale up their operations.

—The IPO market for venture-backed startups is slowly strengthening, according to data from Menlo Park, CA-based VentureDeal. As Bruce reported, nine Bay Area companies have gone public in 2010, as have four more in Xconomy’s other home cities of Boston, San Diego, and Seattle.

—For folks interested in Silicon Valley’s booming angel investing culture, I shared a two-part report from Y Combinator’s July 29 AngelConf event. In Part 1 I excerpted some of the best quotes from Jeff Clavier, Greg McAdoo, Mitch Kapor, Andrea Zurek, and Paul Graham, and in Part 2, I quoted Naval Ravikant, Joshua Schachter, Mike Maples, Paul Buchheit, and Sam Altman. We’ve also got an essay today from leading angel investor Ron Conway, based on his AngelConf talk.

—San Francisco-based Ecotality unveiled a plan to install thousands of charging stations for electric vehicles in the San Diego area, as Bruce reported. San Diego is the first of 16 cities where Ecotality is installing EV charging stations over the next two years.

—I took a look at the digital options for getting business cards out of your life, including—my favorite—an iPhone and Android app called Bump, from the Mountain View, CA-based startup of the same name.

—Erin Kutz followed up on news that ThredUP, a swap site for children’s clothing, is packing its bags in Cambridge, MA, and moving to San Francisco’s Union Square.

… Next Page »

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SAIC’s plans to move its corporate headquarters from San Diego, where the company was founded in 1969, to McLean, VA, may rank as one of the defense contractor’s worst-kept secrets. Today the company also known as Science Applications International Corp. made it official. In a statement issued by the company, new CEO Walt Havenstein says, “This move will formally relocate the corporate executive leadership team closer to our federal government customers enabling us to better respond quickly and efficiently to their critical needs, while maintaining a significant presence in San Diego.”

SAIC spokeswoman Laura Luke tells me by email that the relocation only affects corporate functions, and that roughly 20 corporate positions are being considered for relocation to McLean. These moves would take place by next summer, and operational units directly supporting customers in San Diego will not be affected, Luke says.

Virginia Gov. Tim Kaine hailed the move, calling SAIC a “technology and defense powerhouse” and disclosing that the company plans to invest $25 million and add 1,200 new jobs in the Northern Virginia area over the next three years. About 17,500 of SAIC’s estimated 45,000-employee workforce already works in the metropolitan Washington, D.C., area.

SAIC ranks among a handful of Fortune 500 companies in San Diego. The company had annual revenues of $10.1 billion for its fiscal year that ended Jan. 31.

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We’re happy to announce that there’s now an easier to way to read Xconomy on your mobile phone. Go to http://m.xconomy.com for the new mobile-friendly version of our site, which we’ve simplified for easy navigation on small screens.

All the usual content is there: our Boston, San Diego, and Seattle news stories, along with Xconomist Forum posts from all three cities, not to mention subject-specific pages for our infotech, life science, startups, energy, and deals stories. But it’s all designed to look super-clean and load quickly on a mobile device.

The truth is that no website designed with desktop browsing in mind fares well on the screen of a mobile phone. iPhone owners might demur, but even with the iPhone’s Safari browser, you have to do a bunch of zooming and panning to make your way around a regular Web page. If you’re on the go and you just want to catch a few blog posts, you don’t want to mess with all that, or with the nifty tabs, menus, and image maps that make many sites more functional in full Web browsers but just get in the way on mobile devices.

That’s why there’s a crop of companies—some of them in Xconomy’s own home towns—devoted to helping publishers optimize their content for mobile devices. We found a great one in Providence, RI, called Mofuse. Funded in part by the Slater Technology Fund, which uses money appropriated by the Rhode Island legislature to help promote technology entrepreneurship in the Ocean State, Mofuse is already helping thousands of organizations go mobile, including Fox News, Harvard Business School, Chicago Public Radio, as well as great blogs like Mashable and ReadWriteWeb. (See Mofuse’s press release about our partnership.)

We hope you enjoy the mobile site, and welcome your feedback, suggestions, and bug notes. Because our office mobile armory is limited to a few iPhones and Blackberrys, we’re especially eager to hear how the site looks and functions on other platforms. Please post a comment below, or write me at wroush@xconomy.com.

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San Diego-based Sequenom said today it’s laying off 30 employees, or 12 percent of its workforce, as part of a broader cost-cutting initiative in the company’s genetic analysis business. The company, which has developed a proprietary, high-performance system for precisely analyzing genetic material, says the restructuring was necessitated by the “continuing weak outlook in 2009 for capital equipment sales, particularly in the USA.”

The company remains on schedule in developing noninvasive prenatal genetic tests for use with its genetic analysis system, and still expects to launch one such test, for Down syndrome, in June, Sequenom spokesman Ian Clements said. Luke described Sequenom’s development of the diagnostic technology in January.

Sequenom had about 250 employees before the layoffs, which are effective immediately. (Check Xconomy’s San Diego layoff tracker here for our running tally of layoffs in the local tech sector.) The firm says it also is repositioning its genetic analysis business by focusing on developing new methods and assays for translational research and patient profiling in clinical trials. Sequenom’s business, which originally focused on developing genetic analysis equipment for sale to laboratories, has been shifting to providing analytical services. Clements says the cutbacks represent more of a reallocation of available resources in a soft market than a wholesale change in Sequenom’s genetic analysis business.

The restructuring is expected to decrease Sequenom’s costs by $8 million this year, and the company says it will provide additional details regarding its cost reductions with the release of its first quarter financial results, which is set for next Thursday.

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Venture investors like to talk about transformative change. But it’s becoming increasingly evident that San Diego’s venture capital community is itself in a period of transformative change.

The figures we reported this week on local venture investments for the first three months of 2009 were gloomy enough, with $194.6 million going into 15 deals, according to Dow Jones VentureSource. But local data released this week from another survey done by the National Venture Capital Association and Thomson Reuters are shocking: it counts just $87.4 million invested in that same number of deals.

While the deal count is identical, the disparity of dollars invested is so enormous that I called Brian Caisman at PricewaterhouseCoopers’ San Diego office, who helped compile the NVCA’s regional data.

“Obviously we’re aware of it,” Caisman told me by telephone last night. “I can’t tell you the reason for the difference, but we think we do more data validation.”

While the difference is huge, both numbers reflect anemic levels of venture funding unseen in San Diego since the 1990s. Whichever survey proves to be more accurate, though, it’s clear that San Diego’s homegrown venture community is ailing.

One person who has been monitoring the vital signs is Hans Swildens, a principal and founder of Industry Ventures, a San Francisco firm that specializes in acquiring the distressed assets of venture firms and their investors. Swildens says Industry Ventures buys out VC investments in startups, angels’ stakes, and even founders’ shares. It also acquires the limited partners’ interests in venture funds—the stakes held by wealthy individuals, pensions, and college endowments who turn over their money to venture capitalists to invest.

Investments in venture capital funds tend to be high-risk, long-term plays for buy-and-hold investors. But a burgeoning secondary market has emerged for firms like Industry Ventures that acquire stakes throughout the spectrum of VC activity, from VC funds and their portfolio companies to the LPs, including any remaining unfunded commitments such investors might have. Other firms active in the secondary market include Paul Capital Partners, Pantheon Ventures, and Saints Capital, which all have offices in San Francisco.

Swildens wouldn’t discuss any specific deals involving San Diego VCs, but he says the nature of Industry Ventures’ business “gives us a unique vantage point on the market.”

In general, Swildens says, “What’s happening is the venture funds are triaging their portfolios, shutting down about a third of their portfolio companies so they can preserve some funds for the remaining companies.”

As Swildens put it, “The market in San Diego is actually kind of interesting, because it’s going through a transition.” While the region remains strong for entrepreneurs and technology companies—and out-of-town VC firms remain active here—he says only a handful of San Diego-based VCs have raised capital for new funds and that once-dominant players such as Enterprise Partners Venture Capital and Forward Ventures are not doing much investing anymore. “It represents an opportunity for some other funds,” Swildens says. “I think it will all play out in the next five years.”

While many of San Diego’s homegrown VCs are not doing much investing, Swildens says Industry Ventures has been doing lots of deals—buying out general partnerships, for example, at discounts ranging from 30 cents to 70 cents on the dollar. But even if he’s acquiring a VC’s stake for less than 50 cents on the dollar, Swildens says market conditions have eroded the worth of many portfolios to the point it’s not particularly meaningful to compare them to their original valuations.

“Even if we’re paying 50 cents on the dollar, those account values may be down 30 percent from the end of December,” Swildens says. As a result, he contends the discount his firm is paying is actually less than it might appear to be.

“I suspect the discounts to be huge,” says Peter Shaw, board president of the San Diego Venture Group. He agreed that many San Diego-based VCs are no longer making new investments, but he said quantifying the numbers could be difficult. “The VCs don’t want you to know the numbers, because it reflects the ill health of their industry,” he said.

In the meantime, Swildens has seen his business boom over the past year, as credit markets dried up and the global financial crisis dramatically increased the pressure on institutional investors. Last month, Industry Ventures announced fundraising for its fifth fund was oversubscribed at $265 million. When the firm set out to raise the fund, its original target was $200 million.

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One of the distinguishing characteristics about algae is that it grows fast, and it seems that may be true as well for the algae biomass industry in San Diego.

After reporting last month about a push to establish a multimillion-dollar hub for algae-based biofuels research in San Diego, I learned of a related effort with a broader focus that is known simply as “the regional algae initiative.”

While the initiative includes San Diego’s growing mini-cluster of algae-based biofuels startups, project manager Rick Halperin told me yesterday the concept extends beyond biofuels to all things algal. Halperin says the effort also plans to rely on a recent macro-economic study on “mega-region” economic development that identifies ways in which groups in San Diego and Imperial Counties can collaborate.

Imperial County, which borders Mexico between San Diego County and Arizona, consists of 4,597 square miles of mostly parched terrain. Agriculture has traditionally dominated the Imperial Valley’s economy, but close to 20 percent of the county’s 145,000 residents live near poverty and the December unemployment rate of 22.6 percent is likely the highest in California. Yet Halperin and others see the sun-baked county, which is increasingly being viewed as a paradise for renewable energy, as an ideal hotbed for growing algae in all its multipurpose forms.

“The idea for a regional algae initiative is relatively virtual,” Halperin told me. The initiative is not intended to become a formal entity, or as Halperin put it, “A Roman slave ship where everybody has to grab an oar and pull in the same direction.”

Rather, the initiative is intended to encourage collaboration, for example, by developing and sharing information on sources of government grants and other public funding for algae-based projects that span the continuum from laboratory to construction of large-scale plants. “We’re trying to be very cross-disciplinary in our approach to all this,” Halperin says. “The regional algae initiative is part cheerleading and part figuring out what needs to get done and what needs to get cleared out of our path.”

Apart from using algae to produce biofuels, Halperin says the potential uses for algae are legion. New technologies are being developed in San Diego that use algae to produce methane gas for electric power plants—and as algal pond filters capable of absorbing carbon dioxide emissions from the same power plants. New technologies that use algae to process and cleanse sewage wastewater also could prove helpful to the City of San Diego, which is currently operating its wastewater treatment plant under an EPA waiver.

“The more you can combine your industry initiatives with solutions that address some other problems, the better your chance of getting funding,” Halperin says.

Groups supporting the intiative include San Diego startups like Sapphire Energy that are focused on developing algae-based technologies, government contractors, as well as industry groups like Cleantech San Diego, and economic development organizations in San Diego and Imperial Valley. Halperin says financial support from Bank of America’s “sustainability initiative” launched the effort last year. Halperin, a San Diego consultant who has worked for the Nature Conservancy, American Wind Energy Association and Renewable Energy Institute was hired as project manager.

Part of the regional algae initiative calls for local companies to share information about their research and development efforts as part of a regular “commercialization of algae seminars.” For example, Kent BioEnergy is scheduled to make a noon presentation in Hubbs Hall today at UCSD’s Scripps Institution of Oceanography about its work with Clemson University in developing microalgal-based water treatment techniques. The San Diego company says it has progressed from using algae in finfish aquaculture to increasingly complex technologies, such as using algal biomass to fuel power plants.

“For all the excitement we feel about this,” Halperin says, “We’re also really committed to trying to keep the hype level down.”

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In a move to preserve cash and reduce expenses, San Diego’s Metabasis (NASDAQ: MBRX) announced plans to close its facility in Ann Arbor, MI, and eliminate about 35 jobs there, almost a third of the company’s staff. After the cutbacks, the company will have about 90 employees.

The biotech, which is developing novel small molecule drugs for treating high blood pressure and Type 2 diabetes, also noted two San Diego executives will leave the company as part of the cuts. They are Dr. Howard Foyt, vice president for clinical development, and Connie Bienfait, vice president for investor relations and corporate communications.

Metabasis CEO Paul Laikind called the cutbacks “a very difficult and disappointing necessity.” He says the company has adjusted its strategic objectives, including outsourcing some work to third parties. Metabasis also may pursue partnerships “on certain programs at an earlier stage of development than originally planned.”

Metabasis said most of the costs associated with the cutbacks would be recognized in the fourth quarter, and the company anticipates incurring restructuring charges of approximately $1.7 million. Most of that was associated with the layoffs.

The company disclosed the cutbacks as part of its third quarter financial results, which showed Metabasis has $32.8 million in available cash to fund its ongoing operations at the end of September. It didn’t say how long its cash will last, but it used about $10 million of those reserves to fund operations in the first nine months of the year.

We’ve updated the San Diego layoffs tracker with this news. The full list is here.

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It’s a reality of life in the risky high-tech world: even in good times, many startups go extinct. But when the economic environment turns harsh, as it certainly has this autumn, natural selection starts to speed up—with smaller, less established ventures as the first casualties. Even the companies fit enough to survive tough times find that cutting staff is the quickest way to conserve cash.

While Silicon Valley has probably suffered the most job losses so far, Xconomy’s home cities of Boston, Seattle, and San Diego are definitely feeling the pain. So we decided it was time to start tallying up the damage in each of those regions—1,363 layoffs in Boston, 1,382 in San Diego, and 920 in Seattle just since June. But those totals are just today’s snapshot—as we hear about additional company shutdowns and reductions-in-force, we will keep updating our Layoff Litany lists, and we’ll provide a running total at the bottom of each list.

We aren’t the first tech blog to weigh in with layoff trackers—TechCrunch and CNET are both doing a good job—but they’re attempting to track the entire high-tech universe. Here at Xconomy we wanted to focus on the economic picture in our own communities. A tip of the hat, however, to CNET’s Rafe Needleman for giving us the idea to publish these lists using Google Spreadsheets.

Please click on the links below for the city-specific layoff lists. Somewhat arbitrarily, we have limited our lists to layoffs announced in or after June, 2008. If you have corrections or additions for the Xconomy layoff trackers, please contact us at editors@xconomy.com.

Boston Tech Layoffs

San Diego Tech Layoffs

Seattle Tech Layoffs

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Cash is king. It’s an old adage. But in good times, people seem to take it as meaning that spending cash is king. In hard times like the present, it’s all about conservation of cash. And as the economic woes from Wall Street spill out into the tech sector, companies are announcing widespread layoffs as they seek to reduce their burn rate, focus, and hunker down to ride out the storm.

It’s no different in the San Diego region. As the layoffs began to increase, capped by Monday’s announcement by Amylin Pharmaceuticals that it would trim back 25 percent of its staff, or 340 workers, we decided it was time to start tracking the fallout.

Below you’ll find our San Diego Layoff Litany (we’ve also done it for our other cities of Seattle and Boston, and you can find an overview of all our layoff trackers here). We are tracking layoffs in both technology and life sciences firms in the region since June 2008—with the count so far at 1,382. That number is sure to grow over time—and you can find the running total by scrolling to the bottom of the spreadsheet, which lists layoffs in reverse chronological order.

One note: To explore the “More Info” links in the table below, please right-click or command-click on the links, then select “Open Link in New Tab” or “Open Link in New Window.” Due to a quirk in Google Spreadsheets, clicking on these links directly will cause a new Web page to open inside the spreadsheet window.

If you have corrections or additions to the list, please let us know by writing to editors@xconomy.com.

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If it seems as if San Diego sprang to sudden prominence as a global capital for innovation, at least part of the explanation can be found atop the oceanside bluff known as Torrey Pines Mesa.

This perch has one of the most prestigious zip codes in the world, 92037, used by the Burnham Institute for Medical Research, The Scripps Research Institute, and The Salk Institute for Biological Studies. Across the street from the Salk is the University of California, San Diego, with its own zip code, 92093. Just down the road are General Atomics and the San Diego headquarters of SAIC, Science Applications International Corp., both government contractors that operate as R&D conglomerates.

Torrey Pines Mesa also may be the most stunningly scenic vista in a city renowned for its Mediterranean-like views of coastal cliffs and beaches, sun-splashed bays, and urban skyline.

The mesa encompasses a 2,000-acre wildlands park, with trails that drop 300 feet through deep ravines to the Pacific Ocean. Coastal fog and rain occasionally sweep through the partly wooded bluff, which is usually bathed in sunshine. The zip code includes the Torrey Pines Golf Course, which hosted the U.S. Open earlier this year, and parts of fabled La Jolla, the affluent seaside resort. As it turns, 92037 also includes the latest office for Xconomy, on North Torrey Pines Road.

Leading researchers who relocate to San Diego often cite the combined allure of this scenic landscape and scientific firepower as a major reason for making the move.

It was part of the reason why K. Barry Sharpless, who shared the 2001 Nobel Prize in chemistry, moved to San Diego from MIT 17 years ago. Sharpless told me years ago he particularly enjoyed the ocean swim from La Jolla shores to La Jolla Cove, a roundtrip distance of roughly 2 miles.

Ron Evans, a professor in the gene expression lab at Salk (and a San Diego Xconomist), described the research institute where he works as “an architectural masterpiece” designed by Louis Kahn on a bluff selected personally by Jonas Salk, best known for his development of a killed-virus polio vaccine.

“It was meant to be symbolic of the movement of Americans from East to West,” Evans told me last week. “This is the last West Coast outpost overlooking the Pacific, constructed by Salk at the peak of his fame. Not only does it have magnificent views of the ocean and cliffs, but it is an uncluttered landscape. One never gets tired of that.”

Still, the emergence of Torrey Pines Mesa as a scientific powerhouse did not happen by chance, says Mary Walshok, a UCSD Associate Vice Chancellor and sociologist who has studied Silicon Valley and other technology clusters.

San Diego has a 100-year history of courting the U.S. Navy and relying on the military for its economic development, Walshok says. The Navy and Marine Corps continue to maintain major military bases in the region today.

Yet Walshok credits John J. Hopkins, president of General Dynamics Corp. … Next Page »

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Just over three months ago, Xconomy took its model of hyperlocal coverage of key innovation clusters—which we launched here in Boston in June 2007—to Seattle. This morning, I am pleased to announce, marks the official debut of Xconomy San Diego.

The editor of Xconomy San Diego is Bruce Bigelow, an award-winning business and technology journalist who spent the last 18 years with the San Diego Union-Tribune and was part of the team that won a 2006 Pulitzer Prize in National Reporting for uncovering bribes paid to Republican U.S. Representative Randy “Duke” Cunningham. Bruce over his career has covered life sciences, information technology, venture capital, energy, and defense, among other fields—many of the same core areas Xconomy covers. We’re extremely fortunate to have him, and his presence gets us off to a running start in one of the country’s most important, and, we think, unappreciated innovation clusters.

But Bruce will hardly be alone. He will be teamed with National Biotech Editor Luke Timmerman, who, although based in Seattle, will be covering San Diego life sciences companies as part of his beat. And, of course, the rest of Xconomy’s editors will also be contributing to our San Diego site when circumstances warrant.

As our regular readers know, Xconomy was founded on the simple tenet that growth in the economy is driven by high-tech innovation—and that therefore a great need exists for timely, credible, authoritative coverage of this arena. We believe, too, that innovations often take rise at the boundaries of different fields, and from the interplay of people in startups, large companies, research universities, investment firms, government, and so on—which is why our coverage spans a host of industries and institutions, rather than focusing just on life sciences companies or Internet startups, say.

Most importantly, we believe that the best stories and insights come from being close to the areas and people we cover—hence our strategy of putting first-class journalists like Bruce on the ground in key innovation clusters around the country and concentrating our efforts on those clusters, rather than trying to cover all aspects of innovation all across the country or world. Smart, in-depth local coverage of an innovation community is, we think, central to the health and vitality of that community. But we also believe that good local stories—the ones we aim to tell in each of the three cities we now cover—can yield important insights into national and global trends. So far, our readers seem to agree on both scores. Despite being barely a year old, Xconomy has some 100,000 unique visitors each month. And while 75 percent of our traffic comes from inside the U.S., we are read in more than 200 nations around the world.

If you’re not one of the readers who’s visited us before, welcome. You’ll find that we’re not quite like any blog, daily newspaper, or magazine you’ve read before (though we try to combine the best elements of all three). The one thing about us that is utterly traditional, however, is our respect for and adherence to the highest journalistic principles and practices (more on our ethics policy, as well as our mission and team, can be found on our About page). With one exception, all the stories you find on our site are written by highly accomplished professional journalists. The exception: our Xconomist Forum, where we feature guest articles, essays, and sometimes just musings from some of the world’s leading innovators and business leaders—many of whom are supporting our efforts by serving as advisors, or “Xconomists.”

We are extremely pleased to have assembled a distinguished group of Xconomists … Next Page »

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My last memory of Andrew Chien might be wrestling with him on the living room floor circa 1981. Growing up in Champaign-Urbana, Illinois, his family and mine were friends. Chien grew up to be a professor of computer science at his hometown University of Illinois, then a professor of computer science and engineering at the University of California, San Diego, and now a vice president and director of research at Intel. Our meeting yesterday, at the 2008 Intel Research Seattle open house, was much more civilized than our last encounter (when I was about 10 and he was a teenager).

Besides his expertise in distributed computing and corporate research, Chien is interesting to Xconomy because of his connections to various innovation communities, on the West Coast and elsewhere. He has lived in San Diego for the past 10 years or so, but his Intel office is in Hillsboro, OR, and he also spends a fair bit of time at corporate headquarters in Santa Clara, CA. “Intel is very distributed,” he says. “I have global responsibilities, including in China and India.” When we talked, he was getting ready for a business trip to Taiwan.

From his global perspective, Chien has some keen insights into East Coast and West Coast innovation. “The Boston community was built on the backs of Route 128 defense contractors, which gave birth to the Digitals of the world, and then biotechs came out of universities,” he says. San Diego has some similarities to that model, Chien points out. “I’m amazed by Qualcomm and the wirelesss diaspora that came out of it. Qualcomm came out of the defense industry—Route 15 companies, which were heavily defense contractors—and there’s materials and radio expertise which is quite different from what you see in Silicon Valley.”

“The other interesting thing in San Diego,” he continues, “is there’s been really interesting crossover between information theory and communications, with life sciences. All that [information theory] methodology is spilling into the bio space…Bioinformatics really started at the level of blueprints. Then it moved rapidly to gene regulation, control loops, and systems. Those systems don’t operate in the traditional way that systems operate in electrical or mechanical engineering, because they’re statistical. Bringing those [mathematical] techniques to bear on biological systems to understand how they work, that synergy is powerful…The number of information theorists per capita in San Diego is high.”

I asked Chien what Intel Research is doing in the field, and he mentioned nucleic acid sequencing (e.g., DNA and RNA). “It’s all in the broad vein of the ‘X-dollar genome,’ which is getting cheaper and cheaper. Most techniques today, like 23andMe and Affymetrix, are based on optical sensing,” he says. “For Intel, optical is interesting, but it’s not the sweet spot for our interest…The grand dream is, can you move to a basis of electrical sensing.” If so, he says, you could do a huge amount of scaling up that’s possible because of the infrastructure built up around silicon chips. “The very broad vision of where this goes is not for medical or scientific research, but for sequencing as broad-based sensing—for instance, environmental sensing [e.g., food or water testing for safety] at low cost. It’s a long-range research effort.”

On that note, I asked Chien about his broader vision for Intel Research. “We call it ‘Essential Computing,’” he says. “About two and a half years ago, when I started at Intel, we took a hard look at where computing is going. The big change is that computing is moving from work-oriented tasks to social and communication-oriented applications, including health and well-being.” Essential computing, as Chien explains, will “simplify and enrich our lives.”

The effort rests on two main pillars or technological thrusts, he says. The first is “new functionality” that will allow computing devices to sense and be aware of everything from your emotional state to who your friends are. To some extent, that’s happening already. The second pillar is motivated by what Chien calls “the dirty secret of the IT industry—our technology is hard to use. It often lets us down. We need to make technology something you’d depend on” for sensitive communications with people important to you, he says. In the end, it’s about making computing devices simpler and easier to use. “It’s like your wristwatch,” Chien says. “It’s got to become that integrated and that reliable.”

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Private Equity Hub reported yesterday that San Diego-based Active Network has raised $80 million in a sixth round of funding led by existing investors North Bridge Venture Partners of Waltham, MA, Canaan Partners of Westport, CT, and ESPN. Existing investor Charles River Ventures of Waltham did not return for this round, which brings the firm’s total venture funding to $275 million, PE Hub reported. Active Network runs a number of Web communites related to sports and active lifestyles, including Active.com and CoolRunning.com, and provides software tools that community organizations can use to manage administrivia such as online registrations, reservations, payments, donations and fundraising, and memberships.

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Massachusetts Gov. Deval Patrick stole the show at last year’s gathering of the Biotechnology Industry Organization. In front of a crowd of 20,000 global biotechies meeting on home turf in Boston, he broke news that he planned to invest $1 billion over 10 years to strengthen the state’s position as a leading hub for life sciences companies. Tomorrow, he reports back at this year’s BIO conference, in San Diego. The headline: his life sciences plan has been officially signed into law.

Patrick will use a keynote speech Tuesday to discuss the plan in more detail. He’s sure to get an adoring reception from a pro-industry crowd, which loves to hear the words “cures” and “jobs” listed as payoffs in the same sentence. In fact, the organization is expected to recognize Patrick as “Governor of the Year.”

It took a while for the Patrick administration to agree on specifics of the life sciences bill with the Massachusetts Legislature, although the House ultimately voted 134-13 in favor of it and the Senate gave the final go-ahead in a 31-7 vote last week.

“This is a big deal for Massachusetts and for the country,” said Cyndi Roy, a spokeswoman for Patrick. “The Governor is absolutely excited about this. It’s been a long time coming.”

The final bill contains $500 million for infrastructure to support the industry, $250 million in science grants and small business assistance and another $250 million in tax credits, according to a summary on the Massachusetts Biotechnology Council’s website. The plan is designed to help the state remain strong versus the likes of California, which is sinking $3 billion into a stem cell research plan, and hungry competitors from overseas, such as Singapore and Ireland.

Besides Patrick’s appearance at BIO, the state hopes to impress conventioneers with a pavilion on the trade show floor. The goal will be to recruit new companies to the Bay State, and convince others to expand operations they already have, Roy said. The state’s economic development boosters say they can’t afford to skimp on marketing this year, or any year.

“Since it’s not in Boston, we won’t have the same kind of presence we had last year, but the state understands that to attract business to Massachusetts and show it is a place to grow your business, as with any marketing effort, there needs to be money for it,” said John Heffernan, vice president, policy and external affairs for the Massachusetts Biotechnology Council. “This isn’t Massachusetts versus just any state. This is a global economy. We need to demonstrate we have the talented people.”

The Massachusetts plan has sparked curiosity from officials around the world, said Linda McGoldrick, worldwide director of the Drug Information Association, a non-profit group of 30,000 regulators, scientists and industry officials based outside Philadelphia. It’s likely that other regions will want to form collaborations with Massachusetts institutions now, rather than try to build from scratch what has been growing in Massachusetts for decades, she said.

“Boston has been in the sights of the U.K. and Western Europe for some time, and in Japan and across Asia, the appetite is growing for more life sciences investment,” McGoldrick says. “China is building facilities fast, and they have been shopping, if you will, for opportunities and resources.”

While it may take years for the payoffs to show up, it will be interesting to watch whether Patrick’s investment sparks further investments and collaborations with other governments and institutions from around the world. You can bet some of those discussions will be happening this week at BIO.

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