Monday, Oct. 19, 2009 | Like so many CEOs of emerging start-ups, Scott Thacher spends most of his waking hours ensuring that Orphagen Pharmaceuticals, his tiny biotech, makes it through each day.

But he has still found time during the past year to help establish SBIR San Diego, an association of small biotechs with the primary goal of lobbying Washington D.C. policymakers on how the federal government doles out Small Business Innovation Research grants.

Thacher feels it is imperative that small operations like his have a voice in the nation’s capitol, and has said as much during visits he has made to the local offices of U.S. Reps. Brian Bilbray and Susan Davis. “I will tell anyone who will listen that this is significant,” he said.

But when it comes to having a voice in his own backyard, Thacher is ambivalent. “I haven’t thought about using my position as a business owner to address local issues,” he said.

Neither have many of his peers. San Diego is home to hundreds of high-technology and biotechnology companies that collectively employ close to 150,000 people, and have an overall economic impact on the region of more than $10 billion.

Despite these big numbers the tech industry does very little to push the agenda at San Diego City Hall. In fact, among the hundreds of lobbyists registered with the city, only about a half-dozen organizations represent the tech and biotech industry. Scores of lobbyists, on the other hand, represent the tourism and building industries.

Consider that San Diego Bike & Kayak is represented by a lobbyist, but Connect, the tech industry’s most high-profile industry organization, is not.

“That is telling,” said Duane Roth, the CEO of Connect. “It shows how little cause we’ve had to be down there.”

And it shows, perhaps, why the big public projects that tend to gain traction among politicians and other city policymakers are things like convention centers, stadiums and City Hall complexes that are currently on the table. These are things that matter most to tourism, development and other more downtown-centric industries that are commonly referred to as old San Diego.

Meanwhile, big ideas that would be of greater benefit to the tech and biotech industries that make up new San Diego — such as light rail, reservoirs or large-scale education initiatives — might be talked about at City Hall, but they don’t dominate the discussion.

There are good reasons for this status quo. A long-standing and symbiotic relationship exists among the builders, hoteliers and other businesses that operate downtown and the local officials who regulate land use, taxes and development subsidies. City halls have been approving big downtown building projects for hundreds of years — it’s what they do.

Conversely, the tech and biotech industries are an amalgamation of businesses with a wide array of interests located miles from the city’s downtown core. And the businesses are often run by scientists and engineers who are transplants to San Diego and don’t have a sense for local politics. Their focus is on Washington, D.C., where their funders and regulators live.

Nonetheless, during the past two decades the tech industry has become crucial to San Diego’s future. It is largely credited with pulling the region out of the 1990s recession, and current hopes for an economic recovery are being pinned on the burgeoning clean technology sector and other tech clusters.

And the industries have needs. Biotech companies, for example, use a tremendous amount of water in their laboratories and production facilities, so a large water storage project would benefit that industry. More public transportation in and around Sorrento Valley and the UTC area would be a selling point to companies considering moving their operations here. A large publicly funded education endowment could create more homegrown scientists.

These realities and possibilities have led some in and around tech to question whether the industry is missing an opportunity to assert itself in the local sphere and direct public dollars in ways that will help it create jobs and lure companies to the region.

“We have trouble here moving away from the industries we are most comfortable supporting,” said Marney Cox, chief economist for the San Diego Association of Governments. “There is nothing wrong with those industries; they have been very good to San Diego. But there are opportunities out there that we could move forward on — alternatives to what is on the table today that could benefit the emerging technology businesses.”

‘The Tech Community Stands Up There With Anyone’

For example, Cox said, San Diego officials did not make a hard push to be a first-tier city in the state’s plans for a multi-billion-dollar light rail system. If such a system is ever built, San Diego won’t get it until after it is established in Los Angeles and the Bay Area, he said.

Kevin Carroll, who heads the San Diego chapter of the nationwide industry organization TechAmerica, said he has long been frustrated by what he sees as the tech industry’s pint-sized influence in City Hall.

“If you look at impact on the economy, the tech community stands up there with anyone,” Carroll said. “But tourism grabs a lot more mindshare of our elected officials; they are not thinking, ‘How is this going to affect the tech community.’”

The Mayor’s Office bristles at any suggestion that the tech community is getting the short shrift in Jerry Sanders’ San Diego. Officials point to the mayor’s role in establishing CleanTECH San Diego, which promotes the city as a hub for clean tech industries like biofuels and solar power.

Sanders also lobbied hard for Assembly Bill 811, a state law passed last year that allows for generous subsidies of individuals and businesses that spend money on things such as solar panels and other renewable energy generation. And just in the past few months the mayor has toured the facilities of nearly 20 tech companies, according to his staff.

Julie Dubick, Sanders’ director of policy, said she and technology policy advisor Erik Caldwell spend about half their time on tech issues, but that they don’t get the attention that convention centers and stadiums get.

“There is no tech community Mel Shapiro,” said mayoral spokeswoman Rachel Laing, referring to one of City Hall’s most vocal and frequent critics.

Former Councilman Scott Peters, who represented District 1 where most of the tech companies are located, said there is not a natural interaction between the city and the tech economy.

“Whether the city is doing a good job is a question that the tech community could assist the city with,” Peters said. “I believe that the elected officials are eager to hear what they could do.”

Carroll acknowledges that Sanders has been especially eager, and deserves an “honorary pocket protector.” He said blame for the lack of engagement rests as much on officials in the tech community as it does on the politicians at City Hall.

“They don’t see themselves as necessarily wanting to flex their political muscle,” Carroll said of tech industry executives. “I can’t get 150 of them to show up at a City Council meeting, like the unions can.”

D.C Is What Matters

Roth and Joe Panetta, the CEO of the biotech industry group Biocom, say they spend nearly all of their lobbying efforts in Washington D.C., because that is where the rules that affect the bottom lines of local companies are made, and where the money comes from.

Hundreds of millions in federal grants flow to San Diego companies, research institutions and universities. And key issues, such as Food and Drug Administration regulations, trade, visa programs and product liability, are all under federal purview.

It is also important to note, they say, that within the overall tech communities there are several industry clusters that have very little in common, and so they don’t have the same incentives, as for example hoteliers do, to band together.

However, while they won’t deny that local politics is typically low on their priority lists, Roth and Panetta say the industry will flex its muscle when it has too. “We did go to City Hall 50 years ago, that is how we got the Torrey Mesa zoned for technology businesses,” Roth said.

During the 1960s a few industry visionaries were able to persuade city officials to relax some of its historically strict coastal-area zoning regulations so research and industrial facilities could be built. And last year, a collaboration of local tech industry executives won a battle against residential developers who wanted zoning laws changed so industrial land in Sorrento Valley could be converted into residential neighborhoods.

“I think it is fair to say that there was a point in time when we had to put in the extra effort to school the downtown crowd on the biotech cluster,” Panetta said.

And they echo the Mayor’s Office’s assertion that they stay in regular contact with City Hall policymakers, especially regarding common issues like education, water, transportation and clean air. “We also like convention centers that hold the Bio International convention. … We understand that we are part of the ecosystem,” Roth said.

But, Cox says, both tech executives and policymakers could be more imaginative. He cites the successful statewide effort in 2004 to pass the $3 billion initiative that established California’s stem cell institute, which in addition to working to cure disease, has created jobs and boosted research spending.

“The public can see that the investment in something like the institute — just like investment in visitor industry — can pay tangible benefits,” Cox said.

Kleanthis Xanthopoulus, CEO of Regulus Therapheutics, a biotech that is developing RNA-based therapies, laments the disconnect between “the massive (downtown) projects that have been announced and intent to facilitate better business environment for industries like tech industry that drives the local economy.”

But in the same breath he acknowledges that industry leaders could do a better job of connecting such issues as water use to the health of the tech and biotech industries.

Making that connection can be difficult for a few reasons, say industry insiders. It’s tough because in reality the high tech community isn’t all throughout San Diego, said Faith Picking, Biocom’s public policy manager. “Each council member looks out for the needs of their own district.”

And the tech industry doesn’t have the ingrained connection that the old San Diego industries with the players and institutions that make City Hall work. Biotech executives tend to be transplants, said Jason Spark, of the public relations firm Porter Novelli.

“You don’t necessarily have to have roots in San Diego,” Spark said. “But it helps to have those contacts when it comes to working with local policymakers.”

Please contact David Washburn directly at david.washburn@voiceofsandiego.org and follow him on Twitter: twitter.com/davidwash. And set the tone of the debate with a letter to the editor.

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