This September, Inventopia celebrates 7 years of helping science-based startups in Davis and, before I go any further in this article, I’d like to extend an invitation: We are having an open house to mark this milestone next Tuesday, September 24, 3-7 PM. Please RSVP Here
Notably: we have an opportunity to double our space at the moment by taking over adjoining suites, and part of what we are planning with that expansion is to open up the engineering side of our incubator to the public, creating a well-equipped makerspace that will serve makers, tinkerers and artists in the local community, as well as provide STEM education opportunities for our kids. In the space we are expanding into, there is the promise of a commercial test kitchen, a sensory facility, pilot food production suites and more.
If that sounds interesting to you or if you want to get involved with a local makerspace, by all means, please come by the open house or reach out to me directly.
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Back to economic development: When I started planning Inventopia, there was a lot of activity happening around the idea of supporting innovation here in Davis. The city was putting out RFPs for innovation parks (we assumed at least one would pass). And there were numerous other programs in town championing entrepreneurship:
- “Jumpstart Davis,” a monthly meetup and low-pressure pitch fest giving visibility to local entrepreneurs and people with business ideas.
- “Davis Roots,” an incubator located in the Hunt-Boyer mansion downtown.
- “Davis Angel Network,” an attempt to organize a local group of angel investors to provide seed capital for our coming wave of innovative startups.
- A new Associate Dean for Innovation created “venture catalyst” —a new model for getting university technology licensed into the free market.
But then it all fell apart:
- The economic director was let go, and his successors had none of the same ambition; the position was functionally left open for years.
- The leader of Venture Catalyst took a job in the Bay Area and his position sat vacant for years as well.
- The innovation parks got shot down by voters at the ballot box.
- Jumpstart Davis, Davis Roots, Davis Angel Network all fizzled out.
Inventopia was all that remained.
I have to say, the time in between has been difficult. The city stepped up with a $100k loan to help Inventopia expand in 2020, but it still felt very much like just me carrying the torch alone. The city’s own economic development policy went on auto-pilot, reverting to echoing: “let’s build an innovation park,” which was rejected by the voters another two times.
After the last innovation park campaign failed, I went to the city council asking to initiate a discussion for a more pragmatic way to move forward. Most of them said, “We are about to hire a new economic development director, let’s wait until that position has been filled,” which made sense to me. But then the next two attempts to recruit for that position came up empty-handed, another year and half passed… and I started to wonder if the waiting was worth it.
The light at the end of the tunnel?
Finally, earlier this spring, these tides started to reverse:
- The city finally hired an Economic Development Director, Katie Yancey.
- The university created a new position of “Chief Economic Development and Innovation Officer,” filled by George Baxter, coming all the way from the U.K. for the role.
- Venture Catalyst hired a new director: Karl Jessen, who has a wealth of experience helping the kind of “tough technology” ventures that we see here in Davis
What is more exciting is that not only are these important roles in our ecosystem no longer vacant, but the people who have filled them are solid. I have met with all of these people, they clearly “get it” and seem to be oriented in the same direction.
This isn’t necessarily the case, mind you—when I say “they get it,” what I mean is that they understand that what needs to be done is “more than talk.”
There are a lot of professionals who work in economic development who see their role as “marketing” and “convening”: basically just putting on events to “drive engagement.”
Our region has had a lot of events like that: the same people in a room talking about what our region needs, without a lot of people doing anything.
This is also the reason why Inventopia survived from this period and those other programs withered away: We focused on providing direct material support and resources—things I knew these startups desperately needed.
It is still early in the tenure of these new players in our ecosystem, but it is clear to me from our preliminary discussions that we are on the same page and have a similar understanding for the opportunity before us; a very hopeful sign indeed.
What does economic development mean for Davis? What should we expect?
For the sake of keeping this article to a digestible size, I am going to save the full strategic breakdown of the plan going forward for another article. But for now, to give you a taste for what is to come, I will provide the summary bullet point version:
- Economic development for a city with a research university in it is very different than other cities—we do not have to attract companies here, as this is one of the few places where technologies and companies naturally start. This is something other communities would kill for… but we have failed to take advantage of.
- Our number-one competitive advantage is not the university, it is the TALENT in our city… it is our educated population. University intellectual property and the companies emerging from it for commercialization is number two.
- We can retain locally-generated startups and entice other startups to start here through providing early-stage resources that they need: lab space, agricultural land, greenhouses, pilot-scale process facilities, etc., in addition to access to our workforce.
- We don’t have to try to serve every industry and we don’t have to try to be Silicon Valley either. Davis is the world’s preeminent agricultural research university, and is a world leader in other fields that generally cluster around the theme of “sustainability.” It isn’t rocket science to figure out what kinds of technologies we should be expecting to support.
- An “Innovation Park” cannot be the centerpiece of our strategy. But it is part of it; we certainly need a place for companies to grow into as they mature, but there is an entire continuum of properties and facilities that are needed on the path from concept to mature company. We need to make sure we are providing all of those property types and filling the development pipeline with growing companies before we worry too much about the DiSC property again. The new general plan will come in time for that.
- We can expect 3 or 4 billion-dollar valuation (“unicorn”) companies, especially in the genetics /croptech/agtech/sector every decade… (!)
- We need to keep in mind that even though we in Davis have been ignoring the tremendous economic potential of the innovation happening here in Davis, other communities have not. We are, in fact, competing with neighboring cities to realize/capture the economic benefits of UC Davis. Woodland is way ahead of us in this respect. (They are “drinking our milkshake” —if you get the reference.)
- Because our biggest competitive advantage is talent, housing is actually a critical issue in our economic development strategy. We already have 23,000 young workers, university staff, and students commuting in every day.
Tell me: If our “local talent” can only afford to live in Woodland, where will companies seeking to hire that talent choose to set up shop?
I will write a more comprehensive narrative about what an integrated economic development strategy will look like for Davis in the coming weeks, for now, I want to leave you with this one thought:
Economic development is something that all cities need to engage in for the sake of their own fiscal solvency, but for Davis it is something more: Because of the nature of the research being done at UC Davis, the companies we are spawning are giving us far more than just a robust economy. They are developing the technologies that our species needs in order to thrive in the future: new varieties of crops, new tools for farmers to keep feeding our nation, new alternatives to chemical pesticides, new ways to create green energy, and use the energy, water, and land we do have more efficiently.
Our university invests over a billion dollars into creating this technology every year, and a shocking amount of that research struggles to make an impact on society because of the challenges of commercialization we are dealing with here. Even if it weren’t an amazing opportunity for us economically, it would be worth doing for its own sake.
I hope this has inspired you to be a little more excited about economic development than you were when you started reading. If you can’t wait to hear more, please feel free to track me down at our open house on Tuesday. I’ll see you there!
I think you’re again conflating UCD economic development and the City of Davis economic development. Yes, I’m well aware that the two are connected but not to the degree that most of us wish (right now the best the city can hope for are secondary benefits). But I look at economic development not for it’s own sake but how it improves the CURRENT residents of the city of Davis.
>”The university created a new position of “Chief Economic Development and Innovation Officer,” filled by George Baxter, coming all the way from the U.K. for the role.”
>”Venture Catalyst hired a new director: Karl Jessen, who has a wealth of experience helping the kind of “tough technology” ventures that we see here in Davis”
Are there any plans from this positions or people on working with the city in some way that will directly help the city in terms of tax revenue or some other type of infrastructure help (maybe increased UNITRANS routes in the city for example?)
I mean right now the best the city can hope for is that this kind of UCD economic growth brings in more professionals that will eventually spend money somewhere. Most likely somewhere else because of the city of Davis’ wretched commercial retail offerings. I mean the only hope is that after 10 or so years of growth the city decays enough to realize that it needs to open up more to development/redevelopment for new and better retail space/offerings to serve all these professionals. And that IF most of these new businesses don’t just end up in Sacramento (or Woodland, Elk Grove…etc…).
>”Economic development for a city with a research university in it is very different than other cities—we do not have to attract companies here, as this is one of the few places where technologies and companies naturally start. This is something other communities would kill for… but we have failed to take advantage of.”
To create any type of viable long term sustainable economic growth; a region needs a variety of industries (while featuring some prominent ones….like in Davis’ case Ag, Bio-Science…etc…). The other thing you need is a variety of size/stage of companies. Or in other words yes you do need to lure big companies to Davis…ones in the same fields as those start ups. They help stabilize the local economy by providing jobs to workers in the same fields as the startups…that provides 2 way movement for workers who want to work for a big more stable company or a fast paced rising (and potentially much more lucrative) start up. Also, ideas and companies also spin out of big companies and create startup companies or partner with startups to develop those ideas.
>”We are, in fact, competing with neighboring cities to realize/capture the economic benefits of UC Davis. Woodland is way ahead of us in this respect. (They are “drinking our milkshake” —if you get the reference.)”
You got that right. Though I’m not sure referencing Daniel Plainview who is part of the force of capitalism that will destroy everything around it is the greatest idea when promoting economic development. But yes Woodland and Vacaville are going to lap Davis very soon and other places like Elk Grove are joining in too.
>”Because our biggest competitive advantage is talent, housing is actually a critical issue in our economic development strategy. We already have 23,000 young workers, university staff, and students commuting in every day. Tell me: If our “local talent” can only afford to live in Woodland, where will companies seeking to hire that talent choose to set up shop?”
I don’t think companies choosing their location really care if their employees are actually in Davis or Woodland. I think they’ll go wherever they get the best deal for the business in terms of facilities, infrastructure and support. In fact it’s been my experience that small companies and startups end up located where the owner or executive chooses to live or do business. So maybe Davis should plan for more executive homes to lure more businesses.
Keith, Thank you for the comment.
The University is indeed not capable of being involved in many things “to the degree that most of us wish” and in this case, it is more difficult than most people appreciate: Things like the Bayh-Dole act from 1980 mean that if the university directly (monetariliy) supports the development of a technology, the university owns the IP rights everything developed… which kills any incentive for outside investment.
There are other “handcuffs” on what the university can and cannot do which I wish were not present.
But the university CAN make things happen in a number of ways, and specific to my my case, trying to build an incubator to help commercialize university IP is near impossible if the university itself is not at the table. Having two new leaders on campus hungry to make their mark is in fact going to be extremely helpful.
Regarding diversity in the economy, you are correct, and that is already happening, both locally and regionally. We have established companies, and even publicly traded companies that are sprinkled around town which people generaly don’t notice. “recruiting” large established companies isnt going to be a thing however. Companies like BASF / Mars-Wrigley / ConAgra that have set up operations here are making that decision based on wanting to collaborate with someone on campus, or access our talent pool. They don’t need to be “recruited” by anyone…. and we really cant drive that process either. We can only mess up that natural opportunity by not having available real estate.
My larger point is that the typical approach to economic development: luring in of established companies to set up shop here, is not a game we can compete in for Davis. You need cheap land, you need to be willing to provide tax incentives… its a game that surrounding cities are much better equipped to play than we are.
Where we CAN put in some effort and see some ROI is in the recruiting of the earliest stage startups. THAT is a game where we have an unfair competitive advantage, so that is where we need to put our efforts.
This was the case with Inventopia’s biggest success story so far Innerplant: (full discosure I work for them now). The CEO of that company set up shop here in Davis because she needed plant geneticists. That CEO still lives in SF, but the CSO and the entire research team (45+ employees) are here in Davis because the talent is here. The same is true for most of the other science-based startups that we see here.
The largest danger for us really is in housing. At innerplant, and at many of the other startups I have seen, there is a split: More senior researchers who are 45+ years old tend to live in davis because they got in early, and the more junior staff are all commuting in from outside. The “key early hires” are those veteran operators, people who had careers in town working for the previous generation AgTech companies: CalGene / Monsanto / AgraQuest / Maronne / Novozymes / Arcadia etc. But those younger people who are incredibly important to this sector, and we are absolutely failing in being able to house them.
If we cared about our bottom line, about traffic etc, then our largest housing priority would be missing-middle adult housing as well as additional student housing so that the students who rent houses could clear up some availability there as well. That really does need to be our priority.
Tim, as far the city goes the only major DIRECT benefit it would get from UCD economic development is from sales tax generated by workers retail spending. Of course Davis completely lacks the kind of retail offering to capture that sales tax.
>”My larger point is that the typical approach to economic development: luring in of established companies to set up shop here, is not a game we can compete in for Davis. You need cheap land, you need to be willing to provide tax incentives… its a game that surrounding cities are much better equipped to play than we are.”
Yes and that kind of land is needed for retail development as well. The kind of retail development that will capture sales tax revenue from UCD’s economic development efforts. So for now the city of Davis is screwed until it fixes this problem. Adding housing beyond the state requirements is a drain on the local economy. So from a city resident’s perspective, is it really that bad to have workers commute here from Woodland, West Sac…etc…? IMO until the embargo on peripheral development and size limitations on retail are lifted; we’re pretty much spinning our wheels and going nowhere.
>”If we cared about our bottom line, about traffic etc, then our largest housing priority would be missing-middle adult housing as well as additional student housing so that the students who rent houses could clear up some availability there as well. That really does need to be our priority.”
What exactly is “missing middle adult housing”. I’ve always considered that a cute YIMBY term. From a home sales and development perspective; that just means homes priced lower than the higher ones (pick the cut off point, 10%, 20% lower…). There’s usually some cute idea about urban or new urban densities and people living in town homes and such. But here’s the thing; those things work where people are forced to live in higher density situations. Here? Nope…Most people would rather live in a bigger home with a yard at Spring Lake in Woodland….heck their kids can still enjoy the Davis school system. Building smaller cuter houses are still expensive on a cost per square foot basis and again only work if you don’t have alternatives for more square footage for the same or lower in price. So you want more “missing middle homes” build what the market demands and the older existing homes become your “missing middle homes”.
As for students? If we keep things as they are they’re going to get priced out of town anyway so they won’t be taking up housing in the city for much longer. I don’t find that to be a problem; it worked well in Palo Alto. BUT I do believe there is an opportunity for the city to plan for housing for students with a dedicated student quarter that has an integrated retail and entertainment retail offering for students with the goal of luring other out of town people in the same targeted demographic to come and spend their money….or in other words; come listen to live music, catch a performance buy some food and drink with other young social adults.
So “if we care about the bottom line” means we need to plan for retail expansion if we want more housing beyond what the state mandates. Otherwise we’re just inviting more people, more traffic and more maintenance without the tax revenue to support it and benefit the city.
Matt Williams along with me and my wife Anya presented a brief summary of our 2018 proposal for a cohesive theme for economic development that focuses on food technology. We wrote about it here: https://davisvanguard.org/2018/10/guest-commentary-make-sustainable-food-economic-engine-downtown-davis/. We also highlighted that the 2019 Food & Economic Development Report that Anya participated in: https://davisvanguard.org/2019/10/council-to-finalize-food-and-economic-development-report/
We met the next day with Katie Yancey to discuss this further and we see promise for moving forward again. It’s going to take a multipronged effort–the City isn’t going to just focus on Inventopia’s start ups, but there is a renewed effort to coordinate with UCD. The plan needs to be multi-sector because we need to enhance the attractiveness of Davis and boost tourism to make this a go to place: part of the reason that San Francisco has become a tech hub is that its a world class city.
And we see the evidence that Davis is much more attractive to employees, and therefor employers, in our house prices. We enjoy a 50% price premium over all of the neighboring Yolo and Solano communities. The market is telling us that they want to live here.
Part of our current problem is that 65% of workers living here commute outside of Davis/UCD and 76% of those working in Davis/UCD commute from elsewhere. This is not a good balance for economic, social and environmental reasons. It’s not just the City’s fiscal books that we need to be concerned about. We also want a vibrant community with more choices for amenities beyond what sells to college kids. Right now only 17% of our total Davis/UCD labor force resides and works here. No wonder retailers aren’t interested in opening here. We need more housing for those commuting in and more jobs attractive to those commuting out.
If you want to house those commuters to UCD then you’re going to have significantly ramp up the retail offerings in the city of Davis. Otherwise Davis becomes a zombie bedroom community that continues to struggle to pay for it’s infrastructure and quality of life. So to me all this planning is spinning your wheels and going nowhere (or even possibly backwards) until the city can figure out a way to capture more sales tax revenue.
Becomes?
I think we agree that better retail has to be part of the future.
This place I would disagree with Keith is that he seems to think that ALL housing is negative for the city, and to my knowledge that is only true of single-family housing.
The work from StrongTowns showed that denser, mixed use neighborhoods in the cities they studied were net positive and were in fact effectively subsidizing the net-negative single family tract homes. I don’t know where the transition point is between housing that helps our economy vs housing that hurts it is though.
The point is that the best practices dont say “housing versus commercial” The best practices call for housing designed ALONG WITH retail AND transit. Its a yes-and kind of thing.
How realistic is New Urbanism with respect to retail?
https://www.cnu.org/publicsquare/principles-urban-retail-planning-and-development
Review of: Principles of urban retail planning and development
by Bob Gibbs.
In a preface, Yaromir Steiner, founder and CEO of Steiner + Associates, which developed Easton Town Center in Columbus, Ohio, argues that too much of the new urbanist approach has been “based on romantic and outdated notions of retail” — including “retail concepts that do not exist, store sizes that are not feasible, and commercial and mixed-use centers that lack critical mass.”
Gibbs, who has consulted on more than 500 public and private town centers, is experienced in avoiding such pitfalls. He starts this book with an unexpected observation: “People do not need to shop.” They can postpone many purchases, often for a very long time. As a result, retailers have to be certain that they’re offering what the customers are looking for, with the right image, at an acceptable price, and in formats that take into account how much time people are willing to devote to shopping.
In recent years, retailing has settled into seven main formats: convenience centers, neighborhoods centers, community centers, regional centers, lifestyle centers, town centers, and outlet centers. Gibbs describes the size, siting, drawing power, and other characteristics of these seven, plus an older format that’s been tried in a number of new urban developments: the corner store.
As an economic realist, Gibbs doesn’t advocate the mom-and-pop corner stores that dotted urban neighborhoods 60 or 80 years ago. Many of those couldn’t make a go of it once most Americans acquired wheels. Corner stores are hard to support in a brand-new development except when specific conditions are met.
“In densely populated traditional neighborhood developments (TNDs), a corner store can be economically sustainable within the neighborhood when sited on its primary street,” Gibbs advises. But it will typically need about 800 to 1,000 households — as many households as a typical 160-acre TND contains. Some factors can make the corner store viable with fewer households close by. A location on a road carrying 10,000 or more cars a day is one such factor. Specialization in niche products such as wines, liquors, or baked goods is another. Even so, the store will have to operate long hours, opening early and closing late, to offset its expenses.
Convenience centers — typically 10,000 to 30,000 square feet of gross leasable area, including a chief tenant such as a small specialty food market or pharmacy, plus others such as a bagel store, bakery, bank, coffee shop, deli, or dry cleaner — need about 2,000 households, the equivalent of two TNDs, Gibbs calculates. Convenience centers often are freestanding, linear buildings behind surface parking — a physical form that produces little sense of place. Gibbs shows how these centers can assume more appealing forms, such as an “L,” a “U,” or a “market square” — shops facing three sides of an open area. (The fourth side is a street or lane with on-street parking.)
“Convenience centers cannot be supported by transit stops alone,” he cautions. “The typical commuter tends to be in too much of a hurry or simply unwilling to carry purchases to or from work.”