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

Xconomy San Francisco — 

Every economic development official in the country knows the story. In 1951, Frederick Terman, then the dean of engineering at Stanford University, decided to set aside 200 acres of Stanford-owned fruit orchards in Palo Alto for the new Stanford Industrial Park. The park was soon home to Varian Associates, Shockley Transistor, and Hewlett-Packard, as well as regional offices of General Electric, Eastman Kodak, Lockheed, and Xerox. Today, what’s called the Stanford Research Park has expanded to 700 acres and is home to more than 150 companies, including Vivek Ranadivé’s TIBCO and a variety of law firms and venture-capital firms. It was, in effect, the birthplace of Silicon Valley.

Meanwhile, the University of California, Davis, wasn’t chartered as an independent university until 1959. But if early officials there had been as prescient as Terman, the larger community of Davis, CA, might not be stuck in its current paradox: bursting with great technology ideas and surrounded by undeveloped land, but unable to grow.

UC Davis never managed to set aside much land for new businesses or new workers, and neither did the city government. In the 1970s and 1980s, a number of factors—a distaste for sprawl, reluctance to impinge on the prime agricultural land around the city, fear that city services would be overrun by the rapidly growing student body, and a certain dose of NIMBYism—combined to foster strict growth controls in Davis. They’re still in place today.

“Palo Alto has clearly recovered economically [from the Great Recession] because Terman laid down that industrial park 60 years ago,” says Rob White, chief innovation officer for the City of Davis. “Here, the university-town tension wasn’t resulting in collaborative outcomes. Town and gown in Davis has been an on-and-off love affair, mostly driven by who is in leadership at all levels.”

What that means, at the moment, is that Davis is losing high-tech employers as fast as it’s gaining them. I talked to one entrepreneur, Bret Kugelmass, who founded his unmanned aerial vehicle startup, Airphrame, in Davis because it was close to the farm fields where the company needed to test its prototypes. Kugelmass decided this spring to move the startup to Silicon Valley, in part because he couldn’t find industrial space in Davis to work on the startup’s aircraft, and in part because there weren’t enough other companies in town to talk to and work with. “You have access to the university, which is nice,” Kugelmass says. “But in order to get business done, that’s not all you need.”

Davis (outlined in white) is surrounded by prime agricultural land; a ballot measure passed in 2000 prevents the city from annexing it without the backing of a majority of voters. UC Davis owns more than 5,000 acres of land to the city's southwest. Google Map.

The City of Davis (outlined in white) is surrounded by prime agricultural land; a ballot measure passed in 2000 prevents the city from annexing any of it without the backing of a majority of voters. UC Davis, abutting the city on the southwest, owns more than 5,000 acres of land, but that, too, is protected. Source: Google Maps.

Then there’s Bayer CropScience. In 2012, the German agribusiness giant bought Davis-based AgraQuest, which makes pesticides from naturally occurring microorganisms, for $425 million. Nearly 100 researchers work at the company’s offices on the south side of town. But they’ll all be departing soon for West Sacramento, in search of more space for research facilities.

“While we would have loved to stay in Davis, we couldn’t find a large enough facility that we could get ready quickly,” says Denise Manker, the company’s director of agronomic development for biologics. “It’s always been a little bit difficult for us to expand our greenhouse or those kinds of things. Davis hasn’t been thinking along those lines. It would be helpful for them to keep companies like this here, but we are hiring at a rate such that we can’t wait for them to take two or three years to sort that out.” (Natural pesticide maker Marrone Bio Innovations, which is still growing fast in its post-IPO phase, plans to move into the space Bayer is vacating.)

If Davis can’t find ways to accommodate growing companies, it will never be much more than an incubator for businesses that eventually move elsewhere, city official White predicts. “What Davis lacks is move-up space for corporations that have shown success,” he says. “You can do a great job of telling everyone how much is going on in your town, but if you have no place for them to go…you aren’t going to have the growth you want.”

Ranking American Research Universities
Selected U.S. universities and their national rank as measured by outside research funding; dollars in millions; 2010 data from the Center for Measuring University Performance
1Johns Hopkins University1,997
2University of Michigan, Ann Arbor1,129
3University of Washington, Seattle995
4Duke University980
5University of Wisconsin, Madison940
6University of California, San Diego938
8University of California, Los Angeles900
9Stanford University810
10University of Pittsburgh806
11University of Pennsylvania794
12Columbia University771
13University of Minnesota, Twin Cities761
14University of North Carolina, Chapel Hill747
15Ohio State University, Columbus720
16Washington University, St. Louis694
17Pennsylvania State University675
18University of California, Davis669
19Texas A&M University667
20University of California, Berkeley660
21Massachusetts Institute of Technology646
28Harvard University561

Another problem holding back innovation in Davis, until recently, was the university bureaucracy, which made technology transfer—the process of licensing researchers’ discoveries for commercialization—slow and difficult. The university collects an enormous amount of public and private research funding—more than UC Berkeley, MIT, or Harvard—but has had comparatively little to show for it; in the 2000s, UC Davis managed to spin out only three to six companies per year. Compare that to Stanford, which has a student-founded accelerator, StartX, that by itself churns out 20 to 30 companies per year.

“Davis has historically been a pretty conservative, play-by-the-rules kind of place, and that doesn’t always sit well with entrepreneurs,” says Cleve Justis, executive director of UC Davis’s Child Family Institute for Innovation and Entrepreneurship, which offers training programs to would-be entrepreneurs on campus. “Rule breaking is something they enjoy doing.”

But today, the rules in Davis are gradually changing, both at the university and at city hall. The arrival of a new UC Davis chancellor five years ago sparked a series of changes designed to make it easier for inventors and entrepreneurs to work with the university on spinoffs. There’s a new array of programs to support entrepreneurs, both on campus and off. And the city government, by hiring White as its first-ever chief innovation officer, has begun to demonstrate to the local business community that it’s serious about making the changes needed to accommodate growth.

The stakes in these efforts are, in some eyes, quite high. “My personal bias is that Davis has to prosper for the region to prosper,” says David Morris, a former faculty member at the UC Davis School of Medicine and managing director of TechDavis, a local business association that’s underwriting half of White’s salary. Sacramento without a thriving Davis, Morris suggests, would be a little like Silicon Valley without Stanford, Manhattan without Brooklyn, or Boston without Cambridge.

“It can’t be like a donut, where Davis is a wasteland and the rest of the region prospers,” Morris says. “As Davis goes, so goes the region.”

Chancellor of Entrepreneurship

Sacramento was born as a supply base for gold-seekers, but Davis’s origins are a little more prosaic. It started off as Davisville, a Southern Pacific depot named after a local farmer. The town’s big break came in 1905. California’s new governor, a physician named George Pardee who won fame for stopping an outbreak of bubonic plague in San Francisco and then turned down Theodore Roosevelt’s offer of the vice-presidential slot on the 1904 Republican ticket, picked Davisville as the spot for a new state agricultural school. “University Farm” opened to students in 1909 as an extension of UC Berkeley. Fifty years later, it was spun off as an independent campus, the seventh in the University of California system.

Today Davis is a leafy, Midwestern-style city with 65,000 residents, not counting the 32,000 students at the university. (That makes it about one-eighth the size of Sacramento proper, which has 477,000 people.) The topography is completely flat, which makes it a good place to get around on a bike; in fact, in 2010 the city became home to the U.S. Bicycling Hall of Fame.

UC Davis, whose campus is technically outside the city limits, is most famous for its programs in agricultural and environmental sciences and veterinary medicine. But it’s also a leader in areas like renewable energy, manufacturing technologies, and business management. It has been rising up the ranks of the nation’s leading universities in terms of outside research funding; it collected $681 million in 2009-10 and $754 million in 2012-13, an amount that put it in the top 20 U.S. research universities.

But for a long time, the lavish R&D spending at UC Davis wasn’t translating into much new business creation, either in Davis or in the larger Sacramento region. The reasons for this disconnect are complex. For one thing, the UC Davis Office of Research, which handles the process, was historically understaffed, according to Dushyant Pathak, who joined the university as associate vice chancellor for technology management and corporate relations in 2012. Outside critics have also said the office imposed too many layers of bureaucracy. Deals to license university-owned technologies to outside companies could take months or years to negotiate, even when the companies were led by UC Davis faculty members.

Mrak Hall is home to the UC Davis administration, including Chancellor Linda Katehi and the newly beefed up Office of Research.

Mrak Hall is home to the UC Davis administration, including Chancellor Linda Katehi and the newly beefed-up Office of Research.

Things started to change in 2009, when Linda Katehi, an electrical engineer and circuit designer by training, was named as UC Davis’s sixth chancellor (and its first female chief). Katehi—it’s pronounced kah-TAY-hee—holds 19 patents, and among her earliest actions were creating a blue ribbon committee to review tech transfer and commercialization at the university and setting up a privately funded Engineering Translational Technology Center within the School of Engineering. The center has spun off at least two startups, a network management company and an audiophile headphone maker. “We envision a much larger role for the university as an enterprise for innovation and an economic driver,” Katehi told the university’s board of regents in 2011.

While Katehi has been a successful rainmaker, bringing hundreds of millions of dollars in new research funding to campus, she has been equally busy overhauling the way the university shares the resulting intellectual property and connects faculty and students with entrepreneurs and investors.

“She came in with the right kind of background and a complete understanding and appreciation for what we need to do,” David McGee, the executive director of UC Davis’s Innovation Access office, told me when I visited Mrak Hall, a white brick-and-concrete edifice that serves as the university’s administrative hub. (Innovation Access is UC Davis’s label for technology licensing.) “When you have a top-down driver, it sets a tone that is infectious throughout the campus.”

Dramatis Personae
A few of the Davis- and Sacramento-area business and university officials and entrepreneurs mentioned in this story
Bob AdamsDirector, UC Davis Sustainable AgTech Innovation Center
Meg ArnoldCEO, Sacramento Area Regional Technology Alliance (SARTA)
Jack CrawfordGeneral Partner, Velocity Venture Capital
Cleve JustisExecutive Director, Child Family Institute for Innovation and Entrepreneurship
Oleg KaganovichCo-founder, Black Emerald Capital Partners, Chair, SARTA AgStart
Linda KatehiChancellor, UC Davis
Bret KugelmassFounder, Airphrame
Denise MankerDirector Global Agronomic Development, Biologics, Bayer CropScience
David McGeeExecutive Director, Innovation Access, UC Davis
David MorrisManaging Director, TechDavis
Dushyant PathakAssociate Vice Chancellor for Technology Management and Corporate Relations, UC Davis
Graham RylandCEO, Barobo
Peter Van DeventerCo-founder, SynapsSense, Board Chair, SARTA
Rob WhiteChief Innovation Officer, City of Davis

Katehi directed new resources to the Office of Research and brought in Harris Lewin, a genomics expert from the University of Illinois, to run it as vice chancellor. Lewin hired several associate vice chancellors, including Pathak, who was formerly an entrepreneur-in-residence at QB3, a UCSF-based operation known for its startup incubator programs.

With its expanded staff, the office has come up with an array of cleverly named programs intended to boost spinoff activity. There’s STAIR, for Science Translation And Innovative Research, which will provide proof-of-concept grants of $25,000 to $50,000 to help faculty show that their ideas have commercial feasibility; DRIVE, the Distributed Research, Incubation, and Venture Engine, a project to create a collection of business incubation spaces around campus; the Office of Corporate Relations, which Pathak calls “a concierge service for companies seeking to engage with the research enterprise on campus”; and Venture Catalyst, which is intended to train UC Davis researchers to think and act more like entrepreneurs (it’s partly modeled on QB3’s “startup in a box” program). The Office of Research also created a way for McGee’s Innovation Access office to waive the up-front patent filing fees, often $15,000 or more, that would-be entrepreneurs must pay if they hope to spin out a company around technology developed at the university.

All of these programs are new (though not unique among universities), and it’s too early to say what kind of long-term impact they might have. But the university is already spinning off new companies at an increased rate: 11 companies using UC Davis technology have been launched in this fiscal year, says McGee.

“We are a land grant university and our mission is about education, research, and bringing about public benefit in as many ways as we can leverage—not just paying lip service, but putting our money where our mouth is,” Pathak says. “All the folks in our office believe that. They just haven’t had the resources to act on that belief,” he says, until Katehi’s appointment.

Putting Down Roots in Davis

One important stop for anyone at UC Davis who has an idea for a commercial product is the Graduate School of Management’s Child Family Institute for Innovation and Entrepreneurship. Despite its name, the Institute has nothing to do with children or families: it was established in 2011 with a $5 million gift from Mike and Renee Child, residents of Atherton, CA, who were both members of the UC Davis Class of 1976. (Mike Child trained as an electrical engineer, but made his fortune as a managing director at the private equity firm TA Associates.)

With the endowment, the management school was able to formalize and expand earlier startup incubation efforts led by Andy Hargadon, who is now the institute’s faculty director. Hargadon had found that “there was so much great innovation happening on campus that wasn’t really getting a great outlet,” says Justis, the executive director. The organization’s mission is to work with entrepreneurially minded faculty, staff, and students and help them decide whether their business ideas are viable. Says Justis, “We bring in VCs, lawyers, businesspeople, mentors, and a support system, and help them evaluate their idea and figure out if it can be commercialized; if so, how; and if not now, when.”

That’s standard stuff at big universities trying to boost their business profiles. But Davis was late to the game, and what’s noteworthy is that at a school with twice the enrollment of Stanford, nothing like the Child Family Institute existed until three years ago. The institute runs a popular business plan competition called Big Bang, but its longest-running program is the Entrepreneurship Academy series: three- to five-day “mini-MBAs” with 40 to 50 participants each. The academies are held three times a year and usually focus on a single sector such as biomedical innovation or cleantech. All told, more than 1,000 people have participated, Justis says.

Teams participating in the academies have gone on to start more than 50 companies. One is a Davis-based robotics startup called Barobo. Co-founder and CEO Graham Ryland had devoted his master’s thesis work at UC Davis’s Integration Engineering Laboratory to building a modular robot called Linkbot for STEM education. It’s a versatile, cube-shaped device that can connect with other modules to form larger, more complex robots.

Barobo's Linkbot modular robots are used in classrooms to teach concepts in mathematics and programming. The 12-employee company, based in downtown Davis, was the first to graduate from local startup accelerator Davis Roots. Photo: Palvinder Jagait.

Barobo’s Linkbot modular robots are used in classrooms to teach concepts in mathematics and programming. The 12-employee company, based in downtown Davis, was the first to graduate from local startup accelerator Davis Roots. Photo: Palvinder Jagait.

“I’ve wanted to work with robots and start my own robot company since I was eight years old,” Ryland says. But running a startup can be a hazardous ordeal as much as a fun adventure. The entrepreneurship academy was “a kind of bootcamp for understanding all that went into starting a company,” Ryland says. “It really took a lot of the haze or lack of definition out of the process.”

Barobo has ended up as a kind of poster child for startup innovation in Davis. Its next important stop after the Entrepreneurship Academy was Davis Roots, a non-profit startup accelerator co-founded by Hargadon and Anthony Costello, a serial biomedical entrepreneur. Companies selected for the Davis Roots program get office space in 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 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.”

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One response to “The Davis Dilemma: New Energy for Innovation, But Where to Grow?”

  1. Michael Fitzgeraldmffitzgerald says:

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