Entrepreneurship

How Are We Doing?

The entrepreneurship indicator received a thumbs-up because San Diego County’s total venture capital investments saw a 94% increase from 2017 to 2018, with total investments of $2.5 billion. The number of jobs created by the innovation economy (which includes sectors on the leading edge of research, innovation and development of technologies) stayed broadly constant, while the software sector continued to account for the majority of San Diego County's innovation startups in 2017. Want to know more about what we're measuring?

thumbs up

Improved more than 1 percent from 2017 to 2018

Data Source: PwC/CB Insights MoneyTree Report, 2019

San Diego County's venture capital investments in 2018 totaled $2.5 billion, a $1.2 billion increase from 2017 to 2018. This is the highest level since 2000, just prior to the burst of the dot-com bubble. The number of individual deals decreased from 134 in 2017 to 108 in 2018, indicating an increase in the individual value of these deals. The San Francisco and Silicon Valley areas continued to lead the way with the highest level of venture capital investment.

Why is it Important?

High quality of life means a clean environment, a thriving economy, and an equitable place for all to enjoy.

  • The Kauffman Foundation's State of Entrepreneurship 2017 Report highlights the lack of diversity in the entrepreneurial population in the United States which is predominantly white (80%) and male (65%). Despite the increasing ethnic diversity of the U.S. population, people of color own fewer businesses and these businesses are smaller. The report estimates that the U.S. would gain over 1 million employer businesses and up to 9.5 million jobs if people of color started businesses at the same rate as their white counterparts.
  • According to the latest San Diego Innovation Report in 2017, 25% ($55 billion) of the San Diego region's total economic activity is generated in the innovation economy.

Data Source: CONNECT, San Diego Innovation Report, 2018

Among San Diego County's innovation startups created in 2017, software remains the leading industry with 58.7%, or 271 new companies, and the pharma/biotech/medical devices sector came in second with 20.1% of new startups. Overall, there has not been a significant change in the total number of new innovation companies established in San Diego from 2016 to 2017.

Data Source: CONNECT, San Diego Innovation Report, 2018

Among San Diego County's innovation startups created in 2017, software remains the leading industry with 58.7%, or 271 new companies, and the pharma/biotech/medical devices sector came in second with 20.1% of new startups. Overall, there has not been a significant change in the total number of new innovation companies established in San Diego from 2016 to 2017.

Data Source: CONNECT, San Diego Innovation Report, 2018

San Diego County innovation startups created 1,705 new jobs in 2017. This is similar to 2016 levels. The software industry provided the largest share of these new jobs. Comparing 2017 to 2016, the communications industry had the largest percentage change, increasing by 6%.

Data Source: CONNECT, San Diego Innovation Report, 2018

San Diego County innovation startups created 1,705 new jobs in 2017. This is similar to 2016 levels. The software industry provided the largest share of these new jobs. Comparing 2017 to 2016, the communications industry had the largest percentage change, increasing by 6%.

Data Source: US Patent & Trademark Office, Patent Full Text and Image Database, 2019

In 2018 there were just under 6,000 patents issued to applicants residing within San Diego County, an 11% decrease from 2017. This decrease continues the steady decline in patents that has occurred since 2014. 

Regional Response

Partnerships

The Southern California Energy Innovation Network (SCEIN), a program led by Cleantech San Diego, is a California Energy Commission-funded program to support startups with electric energy-focused technologies in San Diego, Imperial, Riverside and San Bernardino counties. The program provides free resources through a consortium of partner organizations to help entrepreneurs successfully bring their innovations to market. To date, the program has worked with 35 companies who employ more than 172 people, and have raised approximately $46.5 million of private capital and $2.2 million in public (grant) funds.

Projects

At the start of 2019, Nuvve closed a $10 million Series A round with strategic investors Toyota Tsusho and EDF Renewable Energy. This clean transportation startup focused on enabling electric vehicle (EV) batteries to provide additional storage capacity for the grid and was also accepted into the San Diego International Airport's Innovation Lab.

In one example of companies working to break through equity barriers, Aquacycl, a female-led wastewater treatment startup, took home the grand prize at the University of San Diego's 2019 San Diego Angel Conference which aims to connect investors and entrepreneurs in San Diego.


 

What Are We Measuring?

We measure entrepreneurship by tracking year-over-year change in total venture capital raised in the region as reported in the PwC/CB Insights MoneyTree Report. This report captures cash-for-equity investments by the professional venture capital community in private emerging companies in the U.S. It includes the investment activity of professional venture capital firms with or without a U.S. office, small business investment companies, venture arms of corporations, institutions, investment banks and similar entities whose primary activity is financial investing. The report tracks the total jobs created by innovation startups and the number of innovation startups created by sector each year. The innovation economy includes sectors on the leading edge of research, innovation and development of technologies. For more information on these sectors see Connect's Innovation Report. We also track the number of patents issued to applicants residing in San Diego County over time.