LOS ANGELES, CA, March 22, 2018 – The Alliance for Southern California Innovation [Alliance] today announced study results from over 100 interviews with technology leaders and an analysis of venture capital funding data to examine Southern California’s potential to become the next major global technology hub.
The Alliance, a nonprofit founded by Steve Poizner in 2017 to nurture and accelerate the growth of an entrepreneurial ecosystem in Southern California, commissioned Boston Consulting Group [BCG] to produce the study titled “How Southern California Could Be the Next Great Tech Ecosystem” to evaluate leading tech ecosystems in an effort to advance Southern California as a global technology and innovation epicenter. The findings show that despite optimism that Southern California is primed to emerge as a tech hub as robust as Silicon Valley, there are key factors that need to be addressed, including regional fragmentation and the lack of a compelling geographic center.
According to Eric Schmidt, former Chairman of Google, who serves on the Alliance’s Advisory Council, “Southern California has a compelling opportunity for leading technology firms that are looking beyond Silicon Valley to access top talent and a greater diversity of ideas and perspectives.”
By analyzing the correlation between venture funding, wages, and both direct and indirect job creation the study finds that Southern California can reach one third of Silicon Valley’s level of venture capital investment by 2025 by pulling six strategic levers to solidify the regional ecosystem. The potential economic impact of this achievement would lead to an additional 200,000 new, high-paying jobs, along with nearly one million indirect service jobs. This growth would represent $100 billion dollars in increased economic value to the Southern California region.
“Over the past several years we have observed a significant decrease in startups leaving SoCal,” said Greg Becker, CEO of Silicon Valley Bank. “We’ve also seen a substantial inflow of venture capital from all over the world.”
As a next step, the Alliance will hold two technology innovation showcase events, sponsored by Goldman Sachs, Google, and Silicon Valley Bank. The first event will take place on Thursday, May 24 in Silicon Valley at the Computer History Museum, and the second on Wednesday, June 20 at the Luskin Center at UCLA in Los Angeles. Both events will feature Southern California’s most prominent thought-leaders and best technology and life sciences innovators working to commercialize their latest discoveries in an effort to connect them with over 200 top investors and serial entrepreneurs from around the state and country.
Additionally, the report identified the following growth signals for Southern California, including:
- SoCal’s talent advantage:
- The region produces more tech PhDs per year than any other region in the country.
- Caltech generates more patents than any university in the U.S. and UCLA more startups.
- UCSD has a renowned life sciences research program along with the nearby Sanford Consortium for Regenerative Medicine which includes the Sanford Burnham Prebys Medical Discovery Institute (SBP), the Scripps Research Institute, and the Salk Institute, all of them in San Diego.
- 54% of CalTech’s 2017 alumni chose to stay in SoCal vs 31% of grads from 2012.
- SoCal’s demonstrated potential:
- Recent high-profile relocations to SoCal by Meg Whitman (eBay, HP) and Peter Thiel (PayPal, Founders Fund, Thiel Capital).
- SpaceX, Snap (Snapchat) and Cornerstone OnDemand are among the heavy hitters calling Southern California home.
- Tech giants such as Google, Yahoo! and Facebook have expanded their footprint in Silicon Beach, increasing the density of tech employees and engineers in the area.
- SoCal’s entrepreneurial density: Santa Monica and West Hollywood already have an “entrepreneurial density” on par with many Silicon Valley cities, including Palo Alto and Menlo Park.
The BCG study provides six recommendations for strengthening the region which are the centerpiece of the Alliance’s strategic plan. These include growing the amount of local venture capital; diagnosing and strengthening SoCal’s emerging innovation nodes; increasing inter-node connectivity; raising the collective ambitions of SoCal founders; marketing the region’s commitment to diversity and inclusion; and highlighting SoCal’s strengths locally and beyond.
“Southern California is a region of extreme innovation; however, it is so spread-out, making it hard to navigate,” said Steve Poizner founder and board chair of the Alliance. “We believe by finding, filtering and aggregating exciting startups from top universities, research institutes, and incubators/accelerators, we can demonstrate the combined strength of SoCal in a compelling way to top investors and thought leaders.”
“Our comprehensive analysis of a half dozen global contenders shows with the right influence applied strategically, SoCal can become the next major global tech ecosystem resulting in significant economic and societal impact,” said Jody Foldesy, Boston Consulting Group [BCG] Partner charged with leading the study.
For more information, a complete list of the Alliance board and strategic partners, and Alliance invitation-only events, please visit https://www.alliancesocal.org/.
About the Alliance for Southern California Innovation (Alliance)
The Alliance for Southern California Innovation (the “Alliance”), formed in 2017 by serial entrepreneur and public servant Steve Poizner, has successfully brought together the heft of Southern California’s top research institutions, local business leaders, and world-class advisors to focus on bridging critical gaps in the SoCal ecosystem. The goal of the Alliance is to nurture and accelerate the growth of Southern California’s technology and life sciences innovation ecosystem. As a first step, the Alliance will host two technology innovation showcase events: the first on May 24th in the heart of Silicon Valley and the second one on June 20th on the campus of UCLA in SoCal. A complete list of the Alliance board and strategic partners can be found at www.alliancesocal.org.
About the Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm and the world’s leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with offices in more than 90 cities in 50 countries.