Author: Eric Eide, Director, Alliance for Southern California Innovation
The Southern California Innovation Ecosystem is rapidly rising. Our diverse communities are taking huge strides in making the world a better place and helping people in a multitude of ways. We want the world to know what we are building so they can join in the co-creation.
Our Canadian neighbors to the north are a natural place to turn to build these global partnerships given our proximity, similarities, and shared values. Southern California’s (SoCal) and Canada both have increasingly vibrant innovation economies spanning media and consumer tech, aerospace, Artificial Intelligence (AI), and more; we are diverse and becoming more so; and have strong people-to-people connections anchored by one of the largest Canadian diasporas[1] in the country. In the newsletter below, I highlight SoCal’s assets, our diversity,and describe the role the Alliance for SoCal Innovation plays in helping to connect the dots across the fertile landscape.
This is SoCal
SoCal is an amazing region rich with innovation assets and eager entrepreneurs. SoCal is also huge! The region is massive and spread out across more than 20,000 square miles, with over 20 million people, and a $1.2 trillion economy that ranks as the 13th largest economy in the world if SoCal was a country[2]. SoCal stretches from Santa Barbara down to San Diego, from the Silicon Beach inland to Riverside.
The SoCal region has the critical ingredients to be the next great tech hub
SoCal is a top global and national innovation hub, ranking among the top three tech ecosystems in the US. Only the Bay Area and Boston rank higher. Below are a few highlights on the SoCal ecosystem gathered by our strategic partner Boston Consulting Group (BCG). Please check out the BCG report for additional background.
Startups:
Over 3,700
Top investment destination:
$82B in venture funding ('15-'19)
Despite fewer investment deals in 2020, LA trended up nearly 40% to match New York City in deal value at $19.3B
Deep talent pool:
More tech-based employment than any other region (almost 500k)
SoCal ranks #1 for tech PhDs and ranks #2 for engineer grads
SoCal’s universities rank first in the US in tech PhDs awarded each year—about 600—and they are second only to New York State’s universities in tech graduates (more than 13,000 annually)
The talent pool has robust expertise across a diverse set of sector verticals including deep technology
2nd largest higher education student population (approximately 1m) on the heels of New York and 3.5 times bigger than the Bay Area
Top universities:
Largest concentration of research universities with Caltech, UCLA, UC–Irvine, UC–Riverside, UC–Santa Barbara (UCSB), UC–San Diego (UCSD), the University of San Diego, the University of Southern California (USC), and the Claremont Colleges, among others
World-class IP with around 1,000 patents issued annually
80+ Nobel Prize winners
SoCal is diverse
The SoCal region’s diversity makes it difficult to characterize and distill, but is an incredible asset that buoys our innovation potential, creating endless opportunities for novel combinations. In short, our diversity is our region’s superpower! This diversity is multidimensional and applies to multiple areas including geographic diversity, industrial diversity, technology diversity, and individual diversity.
Geographic diversity: The region is a diverse and dispersed network of 14 innovation nodes or clusters that have unique competencies and achieved varying levels of activation. The maps and tables displayed on our website show startup, investor, talent, and corporate density that aggregates an overall innovation index score for each geographic community. The Alliance is also empowering local innovation communities, from downtown LA to Ventura, and SoCal-based vertical industry groups, such as in aerospace, to develop websites that showcase the communities’ unique assets and narratives about what their community can build and produce for the world.
Industrial diversity: SoCal contains deep expertise across many industries represented by strong startup network and global corporate leaders. The largest SoCal technology sectors include:
Software & Technology
Health
Media
Consumer
Aerospace
Diversity of deep technologies: Innovations cover a range of technology platforms, which cut across sectors, driven by R&D and startups. Over 40% of US Deep Tech companies are headquartered in California. What distinguishes deep tech in SoCal is our breadth across domains, with the largest category -- AI -- having less than 30% market share. This stands in stark contrast to the other top US tech hubs, which tend to dominate in a single category.
In SoCal, the top 5 tech categories for "deep tech" are:
Artificial Intelligence (AI) - 29%
Synthetic Biology - 24%
Photonics & Electronics - 19%
Advanced Materials - 16%
Drones & Robotics - 11%
Individual diversity: SoCal’s population is among the most diverse in the US in terms of breadth of ethnicities and origins. SoCal leads in ethnic and professional diversity, which fosters diverse approaches to solving problems, thereby increasing our ability to innovate. Nonetheless, we recognize that there is much more work to do before our innovation and VCs communities more closely reflect the diversity in our local population.
The Alliance for SoCal Innovation: A Super Connector
With so much here, how do we connect the dots? According to our Executive Director, Andy Wilson, by having a high-level architectural view of the entire region, the Alliance will have its greatest impact by acting as a strategic convener and matchmaker; putting players together who have complementary capabilities but share common objectives. It is only by having a holistic and broad view of the region and its strengths that we can facilitate the alignment of assets and players across the ecosystem.
The Alliance helps weave the rich innovation fabric that defines this amazing region: aligning the vertical threads within key stakeholder groups (academia, corporate, VC and community organizations) and then interconnecting them across these groups in hopes of instigating important collaborations. This strategy only works once you have assembled critical mass in each stakeholder group; at the Alliance are now reaching that critical tipping point with more than 75 partnerships/formal collaborators where our impact can be felt across a significant population of the innovation ecosystem. Here’s a brief summary of the collaborations we have formed:
20 leading corporations including Disney, Warner, Amgen, Edwards, Lilly, Edison, Verizon, Cubic, etc.
30 not for profit & community organizations with 15 in our SoCal Leadership Council including CLA-OC, BioSciencesLA, Biocom, Octane, Connect, LAEDC, CoMotion, etc.
10 Top Academic Research institutions: all the UC’s, USC, Caltech, Claremont Colleges, ASU & USD.
15 VCs/CVC including Upfront, March, TenOneTen, M13, Bonfire, Calibrate, Smash, NEA, CAA, City National Bank, and others.
How can the Alliance help?
The SoCal region is large, but the opportunities are immense. If you are an innovation oriented organization, are based in SoCal, have operations here, or are considering making the move, we’d love to hear from you. The Alliance, along with the Southern California Chapter of MAPLE Business Council®, can connect you with people and organizations that can help you realize your innovation goals. We are pleased to have recently signed a MOU with MAPLE Business Council to collaborate on opportunities to connect Canada’s and Southern California’s innovation communities more closely together.
If you are unclear where to start, we can point you to resources, assets, and partners that might help drive your business. We continuously work to provide fuller transparency on what is here to support innovation and have pulled together a number of resources, ranging from research institutions and wet labs to partners and event organizers to help you get started.
Please get in touch directly if you’d like to learn more about SoCal’s innovation potential and how to engage locally (Eric@AllianceSoCal.org).
Notes
[1] As of 2017, California had the largest concentration of Canadians in the United States, totalling 131,200. The largest portion of these Canadian Californians live in Southern California, with the Greater Los Angeles area being home to the second largest single population of Canadians after only New York City. Source: LAEDC (2017) CANADA & SOUTHERN CALIFORNIA: United through collaboration, defined by partnership, sustained by friendship.
[2] For perspective, Canada has 37.6 million people and a $1.6 trillion economy, making it the 9th largest economy in 2020.
[3] Compared to 40% across the USA. Includes Hipspanic and Latino. Source: US Census Bureau; Pitchbook; BCG Analysis
[4] Compared to 13.5% across the USA. Source: US Census Bureau; Pitchbook; BCG Analysis