Many people recognize the importance of the defense sector in protecting us internationally, but fail to recognize that it also protects the local economy. From Qualcomm to essential innovation research, the defense sector has been instrumental in jump-starting many economic facets that make us proud to call San Diego home.

Not only do recent DoD cuts mean thousands of jobs at stake in various industries in the local economy, but also mean that this ‘quality of life’ that we have worked so hard to build is in jeopardy.

Please read Mark’s column in the U-T  to learn about some of the steps EDC and regional partners are taking to defend this vital facet of our economy.

San Diego's nonstop flight to Tokyo has resumed service with an alternate aircraft, a Boeing 777. Japan Airlines (JAL) has announced they are resuming Mon/Wed/Fri service through February 17.  Schedules thereafter will be announced as soon as they are confirmed. Additional information can be found at http://www.ar.jal.com/arl/cms/contents/en/special_news_003178.html.

San Diego venture capitalist and entrepreneur Greg Horowitt took the EDC board of directors on a virtual zip line tour of his new book “The Rainforest: The Secret to Building the Next Silicon Valley” at a recent meeting. San Diego has served as a living lab for Horowitt, who is one of the founders of Global CONNECT, a San Diego-based network committed to growing new technology clusters worldwide.

Horowitt asks a provocative question: Can we engineer serendipity through design? The answer is yes – if we are designing a culture and a system for innovation. Using the contrast between a plantation and a rainforest, he illustrates the prized attributes of a plantation: order, precision, accuracy, productivity, and (to make the comparison work) no weeds. Then imagine a rainforest: it mixes diverse elements together that encourage the development of new species and allows weeds to grow unchecked.

In San Diego, we talk about an ecosystem of innovation.  According to Horowitt, the roots of an ecosystem are smart policies, supportive infrastructure, flexible but strong intellectual property frameworks, enterprise and entrepreneurial support, and a robust capital “food chain.” It also includes an informed and engaged private sector, proactive innovation leadership development, responsive and responsible workforce development that includes skill-building initiatives, active youth engagement, and university – industry linkages. A quick scan of the San Diego innovation landscape reveals that, as a region, many of these roots are well established and are growing branches that expand our economy and prosperity.

Horowitt’s Rules of the Rainforest are straightforward and time-tested:

Rule #1: Break rules and dream.

Rule #2: Open doors and listen.

Rule #3: Trust and be trustworthy.

Rule #4: Experiment and iterate together.

Rule #5: Seek fairness, not advantage.

Rule #6: Err, fail, and persist.

Rule #7: Pay it forward.

The living lab of San Diego has given Horowitt insights that he and his Rainforest co-author Victor Hwang hope will lead to a focus on the development of innovation systems rather than the more traditional emphasis on innovation at the micro level of individuals and teams. Horowitt and Hwang have given San Diego a thoughtful, well-researched look at what it takes to build innovation capacity.

A message from our President & CEO:

With 2013 already under way, and some elements of the fiscal cliff addressed and/or postponed through last minute actions in Washington D.C., we wanted to take a moment to share what we still foresee as significant challenges for San Diego’s economy in the months ahead.

While both chambers of Congress did eventually approve a deal to fend off certain elements of the fiscal cliff, their plan postpones decisions about sequestration; the $110 billion in spending cuts that would deeply affect the military and many other sectors of the economy that receive funding from the federal government. As we have been noting over the past year with our colleagues at the San Diego Military Advisory Council (SDMAC), here in San Diego this could most notably impact our military/defense sectors as well as the research that is the backbone of our technology industries.

According to today’s Washington Post, “The legislation, which President Obama supports but had not signed as of Tuesday night, would delay across-the-board budget reductions known as sequestration for two months, setting up likely fights in Congress over the federal debt ceiling over the same period. The fiscal-cliff deal would offset half the cost of a delayed sequestration with cuts to discretionary spending split evenly across defense and non-defense programs. The other half would come by way of new revenue raised.” 

Even when a deal is reached regarding sequestration we will still see significant reductions in funding that will have big implications for our region. These reductions could have far reaching impacts to workforce, infrastructure, and research.  In the days ahead we will continue to provide you with the best and most up-to-date analysis we can on what all this will mean for our economy. In the meantime, we wanted to remind you all of the layoff support and aversion services that EDC, Manpower, San Diego Workforce Partnership and all of the sub-regional EDCs (North, South and East) can provide to companies that are faced with staffing reductions.  All of these services are free to the business community and are available year-round.

For any companies you may know of that are currently filing WARN notices, informing staff of possible layoffs and/or in the midst of downsizing, please forward them to our website to learn more about the Rapid Response services available to them.

In all ways we look forward to a strong and productive 2013 for our region. Together, by being informed and prepared, we can stand strong in minimizing the impact of sequestration to our economy and in developing new plans for job creation, industry growth and economic prosperity.

“Good News of the Week” was born out of a casual conversation in the conference room. Someone mentioned the positive headlines the region was getting and before we knew it we’d been around the room and everyone had something to contribute. We live in one of the greatest places in the world and it seems like we don’t spend enough time recognizing our regional accomplishments. So we started pulling together the good news of the week and sending it out to our stakeholders. Now, people from around the region send us their news and week by week we have seen the readership grow.

This week, we thought we’d mix things up a bit: we present to you “Good News of the Year,” a collection of the top 10 stories that came out of the region in 2012.

Here’s to many more positive headlines in 2013.

Wishing you the best,
San Diego Regional EDC Team

P.s. If you don't subscribe to our newsletter now, you can do it here.

1. Clinton lauds San Diego's model of collaboration In September, the region gained national attention when Former President Bill Clinton made an appearance on Jon Stewart’s "The Daily Show." When asked about how public and private entities could work together, he immediately jumped to San Diego as a model of collaboration, citing Qualcomm, UC San Diego , and Craig Venter as innovative partners in the region. That wasn't the first time Clinton praised the region. In June, he made similar remarks on CNBC's "Closing Bell." You can watch the complete clip of Clinton's "The Daily Show" appearance here:http://www.thedailyshow.com/watch/thu-september-20-2012/exclusive---bill-clinton-extended-interview-pt--2/ (3:30 is where he begins talking about the region.)
	2. Operation San Diego in full force San Diego is home to the largest concentration of military in the world. With a quarter of the jobs in the region linked to the military, sequestration (automatic spending cuts that will be triggered if a budget resolution is not passed), threatens to ripple through every sector of San Diego's economy. Recognizing the threat to the local economy, business and community leaders have worked together on a collaboration known as "Operation San Diego," an initiative to protect the region's military assets. lt has been widely successful: regional leaders have helped establish a full-time presence in Washington and were invited to speak at a White House Business Council meeting. Numerous community and business related educational panels have also been held. On a state level, San Diego has been looked to provide leadership in this area, proving that San Diego has the resources to mobilize not only the region, but the state.
	3. Filner becomes SD's 35th Mayor On Dec. 3, crowds from around the Mega-Region gathered  to watch Bob Filner become the 35th mayor of City of San Diego. Filner proposes to bring new voices to City Hall to reflect our more ethnically diverse city, improve relationships with municipal employee unions, make the port an engine for job growth, and to focus additional attention on individual neighborhoods.
	4. Forbes names Debra Reed a 'power woman' There are now 20 female CEOs running America's largest companies; one of them is right here in San Diego. In August, Former EDC Chair and CEO of Sempra Energy Debra Reed was recognized by Forbes as one of the nation’s most influential female CEOs. Also recognized as one of Fortune's "50 most powerful women in business" for the second straight year, Reed became chairman of Sempra in December.
	5. Brookings mentors San Diego to create International Export Plan The world renowned Brookings institution  selected San Diego to participate in its Metro Export Initiative, a project that helps regions implement customized Metropolitan Export Plans. As the eighth largest city in the U.S., San Diego ranks 17th among the top 100 largest U.S. metro areas in international exports. The plan, which will be formulated in 2013, will help expand San Diego's exports and increase job creation throughout the Mega-Region.
	6. SD establishes a direct link to Asia On Dec. 2, a 787 Dreamliner aircraft  left Lindbergh Field for Narita International Airport in Tokyo, establishing San Diego's first direct flight to Asia. The new service provided by Japan Airlines is expected to have a huge economic payoff for San Diego due to a forecasted 67 percent spike in visitors to the U.S. from Asia over the next five years. With nonstop service to both Asia and the United Kingdom, San Diego is joining its big-city rivals as a player in the growing market for international travel.
	7. Soitec opens plant in SD It's no surprise that San Diego is leading the way in renewable and solar energy. If the region were a nation unto itself, it would rank among the top 25 nations in the world in terms of solar capacity. Solar Giant Soitec helped the region uphold this ranking when it chose San Diego as its new North American home, creating 450 jobs in the region. The Rancho Bernardo facility, which opened on Dec. 19, is located in a newly expanded enterprise zone.
	8. SD quenches thirst with new desalination plant The region recently made national headlines when the San Diego County Water Authority voted to utlize the largest water desalination plant in the Western Hemisphere with the recent approval of Poseidon Resources' Carlsbad Desalination Project. The project provides 50 million gallons of water to the city per day, enough to quench the thirst of 450,000 residents, as well as reduce its reliance on outside sources. The construction of the plant will provide more than 2,300 jobs and will sustain 575 jobs when it is completed in 2016.
	9. California's economy on rebound When the global economy started to collapse in 2007, out-of-state politicians, the media and others painted California as the poster child of the economic downturn. It was a long slog but in 2012, there have been more positive indicators that things are continuing to improve: tourism and manufacturing have seen steady upticks, companies are not only staying in the region, they're moving here. We've seen that San Diego, with its superb quality of life and tremendous talent pool, has proven that it has the unique ability to be where California begins again.
	10. Community funds public market Seattle has Pike Place. London has Borough Market. San Diego will soon have its own permanent fixture to add to this list: The San Diego Public Market in Barrio Logan. What is most remarkable about this projects is the fact that it was initially funded entirely through the community with kickstarter, a platform for funding creative projects. In six short days, the community came through, raising more than $100,000 via 1,379 backers. The market will permanently open in spring 2013.

Despite tumultuous times for the industry, 2012 marked a banner year for clean technology in San Diego. Numerous organizations within the region’s cleantech cluster – from startups to multinational brands- made significant strides in continuing San Diego’s leadership in the global advanced energy economy. SDREDC Partner CleanTECH San Diego, a regional non-profit member organization dedicated to advancing cleantech innovation and adoption, picked a few of the highlights from a long list of local achievements as we say goodbye to 2012.

1. US Defense Department Awards $30 Million to San Diego Companies to Install Cluster of Three Microgrids

In November, the Department of Defense Environmental Security Technology Certification Program (ESTCP) awarded Power Analytics, OSIsoft and Viridity Energy a $30 million grant to create a secure cluster of microgrids at three San Diego military bases. These best-in-class pioneers will install smart grid technology systems creating the first centrally managed microgrid cluster in a US military environment. This project was selected by the ESTCP and stands out as one of only five technology awards out of more than 750 submitted nationally. The proposal submitted by these three companies was cited as a "must-fund" demonstration for its ability to significantly reduce energy consumption and improving the security of electrical supply for the all three naval facilities. This esteemed selection by the DoD is an illustration of the proven “gold standard” microgrid solution from these technology partners, which is currently deployed at UC San Diego's world-renowned microgrid.

2.San Diego Approves Development of Tule Wind Project and Signals Leadership in Renewables

On August 8, the San Diego County Board of Supervisors voted in favor of Iberdrola's Tule Wind Power Project, a wind farm proposed on federal, county, state and Ewiiaapaayp Band of Kumeyaay tribal land in wind-rich McCain Valley. The Board’s supportive vote shows the region’s commitment to local renewable energy generation and represents a significant stance in welcoming utility-scale renewable energy development in the County. The Tule Wind Power Project will generate up to 200 megawatts (MW) of clean power, enough to serve approximately 60,000 local homes, and reduce carbon emissions by nearly 250,000 metric tons per year. The project will also provide the County with approximately $3.5 million in annual property tax revenue – totaling $105 million over the project’s 30-year life –as well as supporting more than 915 jobs in the San Diego economy and $30 million in sales and use tax during the year of construction, and roughly $1 million per year in lease payments to local landowners.

3.San Diego Accelerates Electric Vehicle Adoption and Charging Station Infrastructure

Today more than 2,000 privately-owned electric vehicles (EVs) are passing you on the roads of San Diego County. The city launched in early 2012 the nation’s first all-electric EV car sharing service through car2go, a Daimler subsidiary. The program boasts more than 12,500 members and more than 200,000 trips in the smartfortwo electric vehicles. Additionally, the California Energy Commission awarded UC San Diego a grant with charging manufacturers RWE and ABB to build the world’s largest and most diverse campus EV infrastructure. The grant provides for 26 Level Two chargers and three DC fast chargers and will further complement both the car2go and private electric vehicle footprint and uptake.

4.California Votes for Proposition 39; Enabling Statewide Energy Efficiency Upgrades

Last election day, Californians overwhelmingly voted to pass Proposition 39, an initiative that will close a corporate tax loophole for out-of-state companies that generated an annual $1 billion revenue loss for the state. Proposition 39 will boost San Diego’s economy, creating thousands of  quality jobs with half of the revenues generated by closing the loophole dedicated to funding energy efficiency and clean energy programs at schools and municipal buildings. By upgrading old heating/cooling systems, replacing old windows, inefficient lighting and other energy solutions, this investment will dramatically lower public energy costs, saving cities and taxpayer money for years to come. It will also reinvigorate the local construction and contracting industries performing these retrofits.

5.Smart City San Diego Unveils Solar-to-EV Project at San Diego Zoo

On November 27, San Diego Mayor Sanders joined Smart City San Diego – a collaboration between GE, SDG&E, UC San Diego, City of San Diego and CleanTECH San Diego –  to dedicate the historic Solar-to-EV Project in the San Diego Zoo parking lot. The nation’s first system of its kind, harnesses energy from the sun to charge plug-in electric vehicles (PEVs,) store solar power and provide renewable energy to the electrical grid. This project features 10 solar canopies producing 90 kilowatts (kW) of electricity (enough energy at peak capacity to power 59 homes) powering five EV charging stations, with one station located in a nearby ADA-accessible parking space. Utilizing new battery technology, the Solar-to-EV project’s 100-kW energy storage system is charged by the solar canopies and used to offset power demands on the grid to charge the electric vehicles. When the battery is at full capacity, the excess solar energy is distributed onto the grid to improve reliability and benefit the surrounding community.  With more than 3.5 million annual visitors at the Zoo, this project serves as an example of the Zoo’s commitment to sustainability and the region’s excellence in collaboration.

6.SDG&E Energizes Sunrise Powerlink

On June 18, SDG&E flipped the switch to its Sunrise Powerlink, a 500,000-volt, 117-mile transmission line linking San Diego to Imperial Valley. The Sunrise Powerlink Project, a $1.9 billion investment chiefly designed to transport renewable energy from the solar and wind-rich Imperial Valley region, will bring more than 1,000 megawatts (MW) of additional imported power to San Diego, enough energy to serve more than 650,000 homes. The project – characterized as one of the most complex and challenging in SDG&E's history – is a result of more than five years of environmental review and permitting as well as 18 months of construction. With the nearby San Onofre Nuclear Generating Station shut down through the year, the Sunrise Powerlink proved timely and invaluable as it provides essential support in maintaining electrical reliability during heat waves.

7.San Diego ‘s Solar Adoption and Cluster Unparalleled

In 2012, San Diego County solar installation exceeds 132 megawatts (MW), with the City of San Diego’s total installations nearing 50 MW. The region is home to more than 200 solar companies, ranging from panel manufacturers like Kyocera and Soitec to installer and leasing firms such as Sullivan Solar Power and OneRoof Energy. Kyocera announces it surpassed production of 2 million solar panels while Soitec opened its utility-scale concentrated photovoltaic (CPV) manufacturing facility in Rancho Bernardo. The Soitec plant will have a 200-MW annual production capacity and create 450 direct jobs and 1,000 indirect regional jobs.  

OneRoof Energy – the nations’ first residential solar company to work directly with roofers to sell and install its systems – launched in San Diego and hires more than 100 people as it expands operations. Sullivan Solar Power enjoyed tremendous growth in the, completing large-scale solar projects across military bases, university campuses, commercial sites, and residences. Its CEO, Daniel Sullivan voted San Diego Business Journal’s Most Admired CEO and made the finalist list for Ernst & Young’s Entrepreneur of the Year. Meanwhile, global companies like Everest Solar Systems and KACO New Energy have entered the San Diego solar scene to provide solar equipment supplies to this frothy marketplace.

8.Consortium Expands Curricula and Training Program to Support Local Biofuels Industry

The EDGE (Educating and Developing Workers for the Green Economy) Initiative – a regional consortium developed to help meet current employment needs in the growing biofuels industry – completed two years of workforce training and placing hundreds of workers in internships and permanent jobs. The EDGE Initiative created both curriculum and career-focused tools aimed specifically at unemployed, underemployed and transitioning workers looking to make the move to a high-growth industry. Since 2010, the program trained more than 300 participants and placed more than 100 in permanent positions. Currently, the curricula developed for EDGE is being expanded to other industry associations and academic institutions across California, and potentially the globe.

9.City Launches Competitive Market for Commercial Property Retrofits

This fall, San Diego City Council voted to allow several Property Assessed Clean Energy (PACE) financing program options for commercial property owners, making San Diego one of the most robust commercial-scale energy retrofit markets in California. The programs – administered by vendors including CaliforniaFIRST, Figtree Energy Resource, Ygrene Energy Fund and Renovate America – allow commercial property owners to use municipal bonds to finance energy efficiency improvement projects, using their properties as collateral. Owners then pay off the retrofits through assessments added to their annual property tax bill. Private financing is used to supply the upfront capital for the retrofits so that local government budgets are unburdened while property owners benefit through no up-front costs for improvements, increased building values and efficiencies, and reduced energy costs.

10.Honeywell Moves Its International Green Boot Camp to San Diego

This summer, Honeywell broke from tradition and moved its annual Green Boot Camp from New Jersey to San Diego, bringing 70 internationally selected middle school teachers to San Diego. The Green Boot Camp is a five-day workshop that focuses on best practices for teaching environmental and sustainability concepts. This workshop, part of a partnership with CleanTECH San Diego, SDG&E, California Center for Sustainable Energy and the Urban Corps of San Diego County, engaged teachers in a variety of interactive experiences such as designing and building a solar house and wind turbine, which equipped them with new teaching methods and sustainability concepts to share with their students and incorporate in their school curriculum for the next generation of sustainability leaders.

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Jeff Harris of TrellisWare Technologies shows off his Cheetah CUB Mobile Ad Hoc Networking unit. (Photo courtesy of CONNECT)

CONNECT’s Most Innovative New Products Awards celebrated 25 years of well-deserved recognition for San Diego companies on Friday. MIP has survived numerous economic cycles including the dot.com juggernaut and the great recession. Throughout its long run, the awards have remained relevant and fresh; changing with the times (and technology) and still coveted by companies big and small. In future posts, Big Picture San Diego will profile the winning companies listed below and also some of the finalist companies that are also very watchable.

The winners this year:

Action and Sport Technologies: PEAR Sports for PEAR Square One
PEAR Square One acts as a personal trainer, delivering real-time coaching and feedback while users listen to music. Users can then view results, track progress, and share performance with friends post-workout.

Aerospace and Security Technologies: Cubic Defense Application for DCID-TALON
DCID (Dismounted Combat Identification) is a rifle-mounted laser system that allows users to instantly identify their friends in the fog of war, using a technology that modulates reflected laser energy with a secure "Friend" code when interrogated.

Clean Technology: Atlantis Technologies for RDI desalination system
The Radial Deionizing super capacitor technology platform (RDI) system can desalinate industrial waste water from oil, gas, and mining operations for 40 – 70 percent less cost than state-of-the-art technologies.

Communications & IT: TrellisWare Technologies for Cheetah CUB
TrellisWare's TW-400 'CUB' unit is the world's smallest and most capable Tactical Mobile Ad-Hoc Network (T-MANET) product – an all-in-one transmitter/receiver/relay offering multi-channel push to talk voice, IP data and streaming video services, and position location services.

Hardware and General Technology: Logic PD for DM3730 Torpedo + Wireless System on Module (SOM)
The ultra-compact DM3730 Torpedo + Wireless SOM is an ideal off-the-shelf solution for applications in markets where network connectivity is required and space is at a premium, including point-of-care medical products to handheld communication devices.

Life Sciences — Diagnostics and Research Tools: Life Technologies for Ion Proton Sequencer
The Ion Proton™ System is a high-throughput bench-top sequencing system that will enable the $1000 genome. The system utilizes semiconductor technology to sequence DNA and RNA bases in a massively paralleled manner.

Life Sciences — Medical Products: Amylin Pharmaceuticals for BYDUREON®
BYDUREON® is the first once-weekly medicine approved by the FDA for the treatment of adults with type 2 diabetes. Biodegradable microspheres provide controlled release of the medicine into the body throughout the week, working whenever blood sugar levels are elevated.

Software: Independa, Inc. for Independa Integrated CloudCare
The CloudCare platform for caregivers enables the elderly to continue living at the residence of their choice longer, more safely and more comfortably. Independa’s "Senior TV," enabling critical yet easy to use care management through the viewer's TV.

Mobile Apps: LIA: Liberated Intelligence for LIA
LIA is an enterprise mobile sales enablement platform. Its innovation utilizes a combination of cloud computing power, mobile device capability, and proprietary sales enablement software to replace outdated legacy tools.

Congratulations to the 2012 Most Innovative New Products Awards winners!