Part 5: Why Santa Cruz? Where Do We Go from Here
SCW Note: In this the 5th article of our 6 part series about Santa Cruz's unique work & life style benefits, author Julia Sinn interviews community leaders who are focused on foundation: unifying skills from K12 thru upper education, venture capital, affordable homes and office space. Jason Borgen and Brad Barbeau will be awarded at Titans of Tech on January 8, 2020.
Something Missing?
Jason Borgen, CTO of Santa Cruz County Office of Education, had a choice: work with Cruzio or non-local corporations to bring high-speed connectivity to local schools. Cruzio seemed like a win-win. But one thing was missing.
Cruzio, while ready to help with its broadband and fiber, didn’t quite have the workforce to take on the task. So Borgen’s dream blossomed into something even bigger: what could become a win-win-win for county schools, students, and the local economy.
Skills for A Strong Future
Borgen is now relentlessly and expertly spearheading the Strong Workforce Program to create a supportive and seamless pipeline from K-12 education to tech careers across Santa Cruz County. The COE’s SWP vision for sustainable integration from education directly into a career or into college is three-fold:
Develop and deliver a strong curriculum of relevant computer science and technical education in schools.
Employ a computer science coordinator to serve the entire County.
Engage local partners and businesses to offer shadowing, internships, and opportunities for these students.
As Borgen and the COE build a coalition of partners to support these changes and develop a long-term plan, the project still needs much more participation, particularly from local businesses. Beyond signing a letter of support, businesses need to offer opportunities, develop internships, and provide financial backing.
Borgen notes that some huge tech corporations have voiced their support, but he sees the smaller (yet powerful) local companies as the key to making this work. Smaller companies are nimble and care more about local successes, and their voices and values are crucial to this endeavor.
Higher Education, Down to Earth
At CSUMB, the Institute for Innovation & Economic Development (iiED) is taking action. Led by Brad Barbeau, the iiED is leveraging regional regional educational institutions, successful entrepreneurs, and other resources to ensure that the Monterey Bay entrepreneurial ecosystem is thriving and growing. Their 2020 Startup Weekend is sponsored by Google for Startups. They’ve clearly seen not only the urgent need for a solid entrepreneurial pipeline, but the opportunity such a system presents to the area’s residents.
Jennifer Baszile, recently named UCSC’s Assistant Vice Chancellor of Career Success and the Executive Director of the Career Center, is also boldly taking on the education-entrepreneur pipeline. Speaking to Santa Cruz New Tech attendees last month, Baszile read the stats: 873 undergraduates from the Baskin School of Engineering, 1,013 from physical and biological sciences, and 663 graduate students gained their degrees from UCSC in the 2018-2019 year.
“They’re already here,” Baszile reminded the full room of tech-industry influencers and supporters. “They already know this area. Most of them already love it.”
UCSC is still a young institutional, and while its programs like computer science and biotech are some of the best in the country, it lacks a full-fledged business school and a strong social entrepreneurship program. Hard skills are only one link in the entrepreneurial pipeline. Local young people seeking these backgrounds are likely going elsewhere to explore doors to entrepreneurship.
How many of those bright-minded folks return to Santa Cruz County with their newfound entrepreneurial skills and business know-how?
Cruz with Capital
Just yesterday, Pittsburgh-based Duolingo amassed a $1.5 billion valuation, thanks to a $30 million boost from Google’s late-stage investment machine, CapitalG. Duolingo: the company that leased billboard space along Highway 101 reading:
“Own a home. Work in tech. Move to Pittsburgh.”
Could Santa Cruz make a billboard like that, but replace it with, “Move to Santa Cruz?”
(Sidenote: Other Duolingo investors include Ashton Kutcher and Tim Ferriss. Ashton Kutcher. Venture capital comes in all shapes and sizes, folks...well, really just shapes. One size: extra large. The point is: capital is everywhere, if you welcome it.)
A couple of weeks ago, we mentioned that local venture capital firms are indeed actively investing in Santa Cruz County companies. While this is true, Santa Cruz needs much more to truly be a long-term competitive marketplace for new tech.
Hope is on the horizon. The recent merger of Santa Cruz County Bank with Lighthouse Bank brought with it a venture division helmed by Dave Apgar. As Eric Johnson detailed in SCW news in October, the new arm of the bank will be able to fund the growth of start-ups in a way that even most individual VCs can’t.
Rich Florida and Charlotta Mellander of CityLab took an enlightening look at why venture capital goes to certain regions. Besides some worrying insights about political division and geographical inequality, Florida and Mellander saw that venture capital doesn’t just flow to the largest, densest, most diverse, and most economically advanced cities. It is also contributes to all those characteristics.
Venture capital is greater in places with a higher-skilled workforce—meaning, workers with higher education and workers in the creative class.
Also from Florida and Mellander’s piece: In 2017, San Francisco actually amassed three times as much venture capital money than Silicon Valley.
Embracing Reality—and Growth
The truth, which is a bitter pill for many locals, is that without support from all sides—institutional, educational, and cultural—Santa Cruz’s current trajectory is leading toward a bedroom community or retirement community. But the very good news is the opportunity is here, and it continues to grow.
Start-ups of all industries—and the money that follows them—are unlikely to try growing roots in a city that doesn’t want them. Understandably, many Santa Cruzans are timid at best, hostile at worst, when it comes to welcoming new tech ventures (just look at Berkeley).
Santa Cruz is a place that, beautifully, fiercely defends localism with all its culture and values. This characteristic of Santa Cruz County is and should continue to be celebrated and preserved. But just walking along Pacific Avenue for a quick glimpse at the empty shells of former local retailers, you can see that something about insular, anti-development localism isn’t quite working the way Santa Cruzans hoped it would.
There are so many multitudinous factors that are causing those downtown storefronts to go dark, but let’s look for a moment at what bringing tech jobs to a city means for the workforce, and what it could mean for Santa Cruz.
For every high-tech job created, five more jobs are created outside of the tech industry. IT services and custom software services jobs created non-tech jobs by a “multiplier” of 4.8. As Edward Jung of Xinova and Intellectual Ventures notes,
“Tech startups are the very companies that can anchor growth in local economies.”
And despite the glitzy media image, tech entrepreneurship isn’t just an opportunity for young post-college types. According to Harvard Business Review analysis, the average age of founders of high-performing, high-growth start-ups is 45 years old. A thriving tech economy is actually a boon for age diversity.
Support from All Sides
But Santa Cruz can’t even be a bedroom community if no one can afford a bedroom. A city that welcomes growing tech must also encourage real estate development—both housing and commercial. As we mentioned last week, Rob McGinnis saw that the only downside is lack of office and commercial space.
The need for affordable housing goes hand-in-hand with the expansion of the tech industry (see: homelessness crisis). Local banks and credit unions like Bay Federal are pitching it to help Santa Cruzians buy homes and pay their mortgages. Organizations like New Way Homes are leading the way in creating affordable housing models.
Can Santa Cruz envision a future with a thriving mix of businesses and families and households of all ages and sizes? Some see opportunity when they look at the expanding tech ecosystem. They see possibility through a holistic, welcoming approach across the city and county: build more housing so that supply is closer to demand, encourage economic entities that bring higher wages, and fix the public issues that make Santa Cruz non-competitive against similar communities.
Initiatives like the County Office of Education’s Strong Workforce Program don’t only benefit those seeking future careers in the tech industry. SWP also helps educators adapt to changing demands of teaching and advising. Santa Cruz County Bank’s venture division will focus not only tech but will also support other local businesses essential to the economy and culture. Embracing tech with a whole-community approach enables everyone to thrive.
Part 1: Lifestyle + Business Sense
Part 2: Room to Grow: Office Space and Wages
Part 3: Housing and Homelessness
Part 4: A Unique Tech Ecosystem
Part 5: Where Do We Go from Here