< Previous58 C A L I F O R N I A I N V E S T M E NT G U I DE t’s long been said that Californians have a love- hate relationship with the automobile. They love their cars; they just don’t enjoy them as much when everyone drives at the same time. If that’s the case, then a new era is about to dawn on the Golden State — one in which electric and autonomous vehicles not only make cars and trucks better to drive, but also solve many of the mobility challenges facing large metropolitan areas. The advanced transportation sector in California is about to enter its golden age, with a plethora of EV (electric vehicle) and AV (autonomous vehicle) companies leading the way. While virtually everyone has heard of Tesla, the Palo Alto-based firm that has become America’s No. 1 seller of electric cars, many other companies are joining the industry in a surge of capital investment never before seen in automotive R&D and manufacturing in the country. “We have a unique cluster that is growing here,” says Judy Kruger, director of strategic initiatives and cluster development for advanced transportation and aerospace for the Los Angeles Economic Development Corp. “No other region in the world has so many innovative companies that are popping up in this sector. No one has as many electric bus manufacturers as we do either.” The roll call of AV companies in California is long and impressive. Names like Tesla, Waymo, General Motors, Cruise, Aptiv, Aurora, Nvidia, Huawei, DiDi, Faraday Future and Xmotors populate the list, among others. In the EV space, Tesla, Canoo, Karma, Fisker, Lucid, Byton, Nissan, Hyundai, Kia, Mitsubishi, Hyperion and Ampere are just some of the firms pursuing electric-powered mobility. Electric bus manufacturers have gravitated to the Golden State as well, propelled by the likes of BYD, Advanced transportation R&D propels California into a new state of mobility. by R O N S TA R N E R I Reaching a Higher Gear A U T O M O T I V E I N D U S TRY More than 580,000 electric vehicles have been sold in California since 20 11 — nearly half of the nationwide total of 1.2 million SO U R C E : VE L O Z HigherHigherHigherHigherHigherHigherHigherHigherHigherHigherHigherHigherHigherHigherHigherHigherHigherHigherHigherHigherHigherHigherHigherHigherHigherHigherHigherHigherHigherHigherHigherHigherHigherHigherHigherHigherHigherProterra, US Hybrid, GreenPower Motor Company, CCW, Executive Coach Builders, ebus and others. “There are literally hundreds of companies in this sector here,” says Kruger. “When you start talking about electric bikes and scooters and all forms of electric-powered mobility ride- sharing companies, the list gets even longer. Santa Monica is the mecca of scooters, Bird employs hundreds of people here and is growing internationally.” When asked why California has become ground zero for the advanced transportation sector, Kruger noted that “California had a climate issue and knew that something had to be done about it. We now have a zero-emissions policy. Tesla put us on the map 10 years ago as a “If you see a delivery robot in public, there is a solid chance it is using our teleoperation software. ” — Elliot Katz, Co-Founder, Phantom Auto Illustration: Getty Images place that can solve the pollution issue.” Marketplace adoption has a lot to do with the growth as well. According to the nonprofit organization VELOZ, more than 580,000 electric vehicles have been sold in California since 2011 — nearly half of the nationwide total of 1.2 million. Last year, 83,804 EVs were sold in the U.S., with California sales accounting for 41,391 of them. On top of that, California boasts more than 20,000 public EV charging stations and 40 hydrogen stations — by far the most of any state in the country. Talent and academia enabled the proliferation of many AV and EV firms in the state, she added. “There is a great talent pool here in LA,” she notes. “The Center for Competitive Workforce works with 19 area community and technical colleges, and we have five community colleges that are looking to assist in the area of electrical systems technical training. The engineering talent, meanwhile, continues to come out of our higher-ed schools like USC, UCLA and others.” The impact does not stop with vehicle production, Kruger says. “There are so many ramifications of EVS — including all aspects of the mobility sector. EV companies are looking at providing shared vehicles. We have to look at that related to traffic congestion,” she adds. “When you talk about EVs, it triggers all kinds of things in the shared mobility space. It is multi-layered.” One of those layers is remote operation of vehicles. Phantom Alley, based in Mountain View, is a startup that is developing technology that allows remote drivers to operate vehicles or robots from thousands of miles away. Since its founding in 2017, the firm has worked with firms that are testing and developing AVs that drive on public roads. The startup is also working with logistics firms to allow remote drivers to control AVs in environments like shopping centers and industrial parks. Phantom Auto announced in April that it had raised about $19 million in Series A financing led by venture capital firm Bessemer Venture Partners. The company said it will use the new funding to expand development its technology. “If you see a delivery robot in public, there is a solid chance it is using our teleoperation software,” said Phantom Auto co-founder Elliot Katz in a statement announcing the funding. C A L I F O R N I A I N V E S T M E NT G U I DE 5960 C A L I F O R N I A I N V E S T M E NT G U I DE here’s no shortage of innovation under way to harness technology in the service of California’s $54 billion agriculture economy. But what if you could harness the plants themselves in the service of an even bigger endeavor? Giant goals are nothing new at the Salk Institute in La Jolla, where it was announced in early 2019 that its Harnessing Plants Initiative to combat climate change will receive funding of more than $35 million from over 10 individuals and organizations through The Audacious Project, a highly competitive program housed at California-based nonprofit TED, known for its TED talks and events. “Plants have evolved over Home to the world’s salad bowl and to the hungriest of the world’s venture capital, California is the logical place for agtech to thrive. by A DA M B RU N S T Grow With Care AG T E C H Photo courtesy of Iron OxC A L I F O R N I A I N V E S T M E NT G U I DE 61 time to be an ideal vehicle for carbon capture and storage,” said Joanne Chory, director of Salk’s Plant Molecular and Cellular Biology Laboratory and executive director of the Harnessing Plants Initiative. “If we can optimize plants’ natural ability to capture and store carbon, we can develop plants that not only have the potential to reduce carbon dioxide in the atmosphere, but that can also help enrich soils and increase crop yields.” Salk explains the key to the plan lies in a substance called suberin, a naturally occurring carbon-rich substance found in plant roots that resists decomposition. “By understanding and improving several genetic pathways in plants, the Salk team will develop plants that grow bigger, more robust root systems containing an increased amount of suberin to absorb larger amounts of carbon from the atmosphere, and bury the carbon-rich suberin deep in the soil,” says the Institute. The work growing Salk Ideal Plants™will take place in a facility at Salk that can mimic environmental conditions almost anywhere on Earth. Once model plants have been developed, the team will transfer these genetic traits to six prevalent crop plants, while also pursuing a separate project that focuses on restoration of coastal plants (e.g., mangroves, marsh grasses and wetland plants) that constitute some of the most powerful carbon sinks on the planet. Asked which areas and crops in California offer the most promise for implementation of this technology, Joseph Noel, professor and director of Salk’s Jack H. Skirball Center for Chemical Biology and Proteomics and a Howard Hughes Medical Institute investigator, says, “Soybean and corn are two of our high-priority crops, both of which grow in California. At this point we are focused on high-acreage crops globally, to best achieve an effect against climate change.” California’s coast, marshes and river deltas, such as in the Bay Area, will also be examined in the context of the separate coastal restoration project. Noel says the team has engaged with local growers in preliminary discussions. He also says the Salk plant biology team receives philanthropic support from many generous individual local donors based in California, and is open to ways to partner with other local organizations or government entities. Other aspects of Salk’s biological research have been funded by CIRM (California Institute for Regenerative Medicine). All Eyes Look to California First How much momentum is there in California ag-tech? Enough to spawn startups everywhere you look, backed by institutional infrastructure and talent from places such as University of California Agriculture and Natural Resources; the University of California at Davis, where the Smart Farm Initiative is headquartered; and the Western Growers Center for Innovation and Technology ag-tech incubator program; and SVG Partners’ Thrive ag-tech accelerator and venture fund, based in Silicon Valley. Thrive’s April 2019 list of Top 50 ag- and food-tech startups globally included firms in the six main tech categories of Biotechnology, Connected Devices, Cloud Services/Saas, Robotics & Automation, Next-Gen Farms, and Big Data & Analytics; and seven problem areas: Health & Nutrition, Labor, Farm Management, Environmental Sustainability, Food Safety, Traceability, and E-Commerce. Given California’s leadership in the arena, it’s no surprise that THRIVE’s latest cohort of nine finalists for its seed (as in seed capital, not plant seeds) accelerator — chosen from 275 firms across 67 countries — had locations in the state. Silicon Valley itself is not only home to the venture capitalists pouring funds into ag-tech innovation, but to some of the startups themselves, including autonomous farm Iron Ox and Blue River Technology (purchased by John Deere in 2017), which among other inventions has created a robotic lettuce-thinner. The Iron Ox operation grew out of the well-known Y Combinator incubator in Mountain View. It’s just one sprout of many in the fertile crop of ag-tech firms that are part of California’s next ag generation, as the 1.4 million acres known as the “salad bowl of the world” in Salinas meet up with the globe-leading tech ecosystem based just over an hour away. Boston Properties and AvalonBay begin to apply best practices from regulated states like California across their entire portfolio.” It makes sense that a state whose economic heft is routinely trotted out as larger than that of so many nations would also have the power to move the needle on sustainability. The state’s progressive environmental and energy policies have drawn acclaim worldwide for decades. Businesses at one time reflexively fought such policies and the costs they entailed (some still do). But today many are seeing business development opportunities in green fields, not to mention a handy convergence with corporate sustainability goals. And renewable energy is a big reason why. Policy and Practice According to the California Energy Commission’s latest update, California installed renewable elec- tricity capacity totaled an estimated 30,759 MW as of December 31, 2018. This total includes nearly 7,955 MW of solar BTM capacity from homes and businesses throughout the state. (A BTM solar system allows an owner to have dibs on energy gener- ated by that owner’s solar system, before having to use energy supplied from the grid.) Large-scale renewables make up about 57% of total statewide capacity, or about 17,470 MW, the CEC reports. Solar represents the majority of renewable capacity installed in the state, and its growth goes back to supportive state policy, such as the 2010 Clean Energy Jobs Plan from former California Governor Edmund G. “Jerry” Brown Jr. It called for adding 20,000 MW of renewable capacity by 2020, composed of R E NE W A B L E E NE R G Y ite Selection magazine’s annual Sustainability Rankings Index takes into account a wide range of factors from LEED-certified buildings to renewable energy generation to overall well-being and investment by “green industry.” In 2018, those rankings placed California No. 1 nationally, and Greater San Diego and Los Angeles No. 5 and No. 6, respectively, among the nation’s metro areas. “We continue to see three factors drive building efficiency and sustain- ability in the U.S. specifically — (1) regulation, (2) investor pressure (3) tenant demand,” Scott Knox, chief data scientist for San Diego-based en- ergy efficient buildings firm Measur- abl, told us. “For the first time, regu- lation has eclipsed investor pressure as the number one driver of sustain- ability in the U.S., thanks in par- ticular to California’s benchmarking law, AB 802, finally coming online. California is a vast market, so regula- tion here not only compels buildings within the state to act, but it has a knock-on effect where owners of multi-state real estate portfolios like CBRE Global Investors, BlackRock, S Think you’re ahead of the clean energy curve? Chances are California’s already lapped you. 62 C A L I F O R N I A I N V E S T M E NT G U I DE Apple announced in April 2019 it will exceed its goal of bringing 4 gigawatts of renewable energy into its supply chain by 2020. Apple’s new HQ in Cupertino is powered by 100% renewable energy, in part from a 17-megawatt onsite rooftop solar installation. Photo courtesy of Apple by A DA M B RU N S Further Along as larger than that of so many nations would also have the power to move the needle on sustainability. The state’s progressive environmental and energy policies have drawn acclaim Boston Properties and AvalonBay begin to apply best practices from regulated states like California across their entire portfolio.” It makes sense that a state whose economic heft is routinely trotted out as larger than that of so many nations would also have the power to move the needle on sustainability. The state’s progressive environmental and It makes sense that a state whose economic heft is routinely trotted out as larger than that of so many nations would also have the power to move the needle on sustainability. The Boston Properties and AvalonBay begin to apply best practices from regulated states like California across It makes sense that a state whose economic heft is routinely trotted out as larger than that of so many nations would also have the power to move the needle on sustainability. The state’s progressive environmental and state’s progressive environmental and supportive state policy, such as the Clean Energy Jobs Plan from former California Governor Edmund G. “Jerry” Brown Jr. It called for MW of renewable supportive state policy, such as the Clean Energy Jobs Plan from former California Governor Edmund G. “Jerry” Brown Jr. It called for MW of renewable , composed of supportive state policy, such as the Clean Energy Jobs Plan from former California Governor Edmund G. “Jerry” Brown Jr. It called for 20,000 MW of renewable capacity by 2020 state, and its growth goes back to supportive state policy, such as the 2010 Clean Energy Jobs Plan from former California Governor Edmund G. “Jerry” Brown Jr. It called for adding renewable capacity installed in the state, and its growth goes back to supportive state policy, such as the ticular to California’s benchmarking , finally coming online. California is a vast market, so regula- tion here not only compels buildings within the state to act, but it has a knock-on effect where owners of multi-state real estate portfolios like CBRE Global Investors, BlackRock, lation has eclipsed investor pressure as the number one driver of sustain- ability in the U.S., thanks in par- ticular to California’s benchmarking , finally coming online. data scientist for San Diego-based en- ergy efficient buildings firm Measur- abl, told us. “For the first time, regu- lation has eclipsed investor pressure as the number one driver of sustain- ability in the U.S., thanks in par- ticular to California’s benchmarking law, AB 802 California is a vast market, so regula- ability in the U.S. specifically — ( ) investor pressure ( tenant demand,” Scott Knox, chief data scientist for San Diego-based en- the nation’s metro areas. “We continue to see three factors drive building efficiency and sustain- ability in the U.S. specifically — ( ) investor pressure ( California No. 1 nationally, and Greater San Diego and Los Angeles and No. 6, respectively, among buildings to renewable energy generation to overall well-being and investment by “green industry.” , those rankings placed Rankings Index takes into account a wide range of factors from LEED-certified buildings to renewable energy Site Selection magazine’s annual Sustainability Rankings Index takes into the needle on sustainability. The state’s progressive environmental and energy policies have drawn acclaim worldwide for decades. Businesses at one time reflexively fought such or about Solar represents the majority of renewable capacity installed in the state, and its growth goes back to supportive state policy, such as the ite Selection magazine’s annual Sustainability Rankings Index takes into account a wide range of factors from LEED-certified buildings to renewable energy generation to overall well-being and investment by “green industry.” , those rankings placed nationally, and Greater San Diego and Los Angeles , respectively, among the nation’s metro areas. “We continue to see three factors drive building efficiency and sustain- ability in the U.S. specifically — ( ) investor pressure ( tenant demand,” Scott Knox, chief data scientist for San Diego-based en- ergy efficient buildings firm Measur- abl, told us. “For the first time, regu- lation has eclipsed investor pressure as the number one driver of sustain- energy policies have drawn acclaim worldwide for decades. Businesses at one time reflexively fought such policies and the costs they entailed (some still do). But today many are seeing business development opportunities in green fields, not to mention a handy convergence with corporate sustainability goals. And renewable energy is a big reason why. Policy and Practice According to the California Energy Commission’s latest update, California installed renewable elec- tricity capacity totaled an estimated 30,759 MW as of December 31, 2018. This total includes nearly 7,7,7955 MW of solar BTM capacity from homes and businesses throughout the state. (A BTM solar system allows an owner to have dibs on energy gener- ated by that owner’s solar system, before having to use energy supplied from the grid.) Large-scale renewables make up about 57% of total statewide capacity, or about 17,17,17470 MW, the CEC reports. Solar represents the majority of renewable capacity installed in the ite Selection magazine’s annual Sustainability Rankings Index takes into account a wide range of factors from LEED-certified buildings to renewable energy generation to overall well-being and investment by “green industry.” , those rankings placed nationally, and Greater San Diego and Los Angeles , respectively, among the nation’s metro areas. “We continue to see three factors drive building efficiency and sustain- ability in the U.S. specifically — (1ability in the U.S. specifically — (1ability in the U.S. specifically — ( ) 1) 1 ) investor pressure (3) investor pressure (3) investor pressure ( ) 3) 3 tenant demand,” Scott Knox, chief data scientist for San Diego-based en- ergy efficient buildings firm Measur- abl, told us. “For the first time, regu- lation has eclipsed investor pressure C A L I F O R N I A I N V E S T M E NT G U I DE 63 8,000 MW of large-scale renewable generation and 12,000 MW of renewable distributed generation. The 8,000 MW goal was met in 2011, and the 12,000 MW goal was met in 2018. California now has more than doubled the 8,000 MW large-scale renewables capacity goal. Going back further, the Million Solar Roofs Initiative established the goal it describes: solar PV systems on 1 million roofs by 2018, aided by a suite of incentives broadly grouped under the California Solar Initiative. CEC staff estimated that by the end of 2018, over 958,000 solar systems were to be installed across California — a trend aided by a rapid decline in the costs to install solar on homes and businesses. Lawrence Berkeley National Laboratory reports the median installed prices for solar energy systems from 2010 to 2017 declined by 6% per year for residential, 8% for small non- residential systems, and 11% for large (>500 kW) non-residential systems. A key mandate has been the state’s Renewables Portfolio Standard, which requires load-serving enti- ties to increase their procurement of eligible renewable energy resources to 33% of retail sales by 2020 and 60% by 2030. “Based on an approxi- mation of electric generation from RPS-eligible sources divided by fore- casted electricity retail sales for the year 2018, the Energy Commission estimates that 34% of California’s retail electricity sales in 2018 will be provided by RPS-eligible renew- able resources,” the CEC reported in December, up from 22% in 2012. In other words, the state remains firmly ahead of schedule. In 2018, the CEC pushed the pol- icy envelope further, adopting 2019 Building Energy Efficiency Standards requiring the installation of solar photovoltaic systems on the majority of new homes, starting on January 1, 2020. And an executive order called for the state to achieve carbon net neutrality by no later than 2045. At the end of 2018, California was estimated to have more than 22,804 MW of wholesale renewable capacity, of which more than 455 MW came on-line in 2018. This includes nearly 280 MW of new large-scale solar PV and over 130 MW of new wind facilities. There are also roughly 8,400 MW of renewable energy projects that have received permits to build in California but were not yet operational at that time, said the CEC. Most sought to interconnect to the California ISO-controlled grid. And that doesn’t even count large-scale hydroelectric (30 MW or larger), which in 2017 supplied nearly 15% of total power generation in the state, but does not fall under the definition of renewables at the state or federal level. Forward Thinking The push is on for organizations to lead the way in renewables purchasing, backed by initiatives such as RE100, uniting companies committed to using 100% renewable electricity to power their operations. “RE100 members include some of California’s largest companies, such as Apple, Google, and Salesforce, and membership has diversified in recent years to include more than just technology companies,” reports the CEC, noting that the Business Renewables Center reports that corporations purchased 6.43 GW of clean energy nationally through December 14, 2018. The public sector continues to do its part too: The University of California system announced in September 2018 that it is committing to 100% clean electricity supplies by 2025, across all 10 of its campuses and related facilities. Recent corporate procurements in California include Kaiser Permanente, which announced in September 2018 that it finalized a power purchase agreement that will enable construction of 180 MW of utility-scale renewable capacity, including a 131-MW solar integrated with storage facility in Riverside County. The National Renewable Energy Laboratory (NREL) reports that California had 822 MW of renewable energy purchased by corporations as of September 2017. “The demand for renewable generation from corporate off-takers is expected to increase as corporations look to decarbonize their full supply chains and support the use of renewables to fuel energy- intensive operations, such as data centers,” the CEC reports. California companies such as Google and Facebook are prominent members of another new organization launched in March 2019, as more than 300 companies unveiled the Renewable Energy Buyers Alliance (REBA) — the largest group of corporate renewable energy buyers in the United States. By working to unlock the marketplace for organizations to buy renewable energy, REBA hopes to bring more than 60 GW of new renewables online in the United States by 2025. “Every enterprise — whether it’s a bakery, a big-box retailer, or a data center — should have an easy and direct path to buy clean energy,” said Michael Terrell, REBA’s first board chair and head of Energy Market Strategy for Google, whose own Project Sunroof and Environmental Insights Explorer tools help regions examine emissions and solar potential data. “Ultimately, sourcing clean energy should be as simple as clicking a button.” In California, that vision is close to reality. California’s Renewables Portfolio Standard requires load-serving entities to increase their procurement of eligible renewable energy resources to 33% of retail sales by 2020 and 60% by 2030. goal it describes: solar PV systems on suite of incentives broadly grouped under the California Solar Initiative. CEC staff estimated that by the systems were to be installed across California — a trend aided by a rapid decline in the costs to install solar on homes and businesses. Lawrence Berkeley National Laboratory Building Energy Efficiency Standards requiring the installation of solar photovoltaic systems on the majority of new homes, starting on January 2020. And an executive order called for the state to achieve carbon net 958, systems were to be installed across California — a trend aided by a rapid decline in the costs to install solar on homes and businesses. Lawrence Berkeley National Laboratory reports the median installed prices for solar energy systems from 2017 declined by for residential, declined by 6% per year for residential, 8% for small non- residential systems, and kW) non-residential systems. % for large kW) non-residential systems. A key mandate has been the state’s Renewables Portfolio Standard, which requires load-serving enti- ties to increase their procurement of ties to increase their procurement of eligible renewable energy resources % of retail sales by 2030. “Based on an approxi- mation of electric generation from RPS-eligible sources divided by fore- casted electricity retail sales for the casted electricity retail sales for the 2018, the Energy Commission estimates that 34% of California’s retail electricity sales in be provided by RPS-eligible renew-be provided by RPS-eligible renew- able resources,” the CEC reported in December, up from In other words, the state remains firmly ahead of schedule. December, up from firmly ahead of schedule. In 2018 icy envelope further, adopting Building Energy Efficiency Standards reports the median installed prices for solar energy systems from to 2017 for residential, residential systems, and (>500 kW) non-residential systems. A key mandate has been the state’s Renewables Portfolio Standard, which requires load-serving enti- ties to increase their procurement of eligible renewable energy resources % of retail sales by % by 2030 mation of electric generation from RPS-eligible sources divided by fore- casted electricity retail sales for the year 2018 estimates that retail electricity sales in be provided by RPS-eligible renew- able resources,” the CEC reported in December, up from residential systems, and (>500 A key mandate has been the state’s Renewables Portfolio Standard, which requires load-serving enti- ties to increase their procurement of eligible renewable energy resources to 33% of retail sales by 60% by mation of electric generation from RPS-eligible sources divided by fore- casted electricity retail sales for the year estimates that retail electricity sales in 64 C A L I F O R N I A I N V E S T M E NT G U I DE n a clear day in mid-April, a freakish flying machine slowly gained lift and groaned into the sky above California’s Mojave Desert. The twin-fuselage behemoth fitted with six Boeing 747 engines circled for more than 90 minutes above the Mojave Air and Space Port (MASP), hitting a top speed of 189 miles per hour. Stratolaunch, it is called, is the biggest airplane ever to fly. Its wingspan is wider than a football field. The odd duck of an aircraft was built to fire satellites into Earth orbit by a cutting-edge engineering company known as Scaled Composites, one of more than 60 companies engaged in flight development and advanced aerospace design at MASP. “This was a huge accomplishment,” says Bob Withrow, Scaled Composites’ vice president of engineering. “A bunch of us were out there watching, and you can hear people screaming in the videos. Just seven years ago, the place where that airplane was designed and built was just dirt. Mojave dirt.” Founded in 1982 by Burt Rutan, the legendary aerospace engineer, “Scaled” was one of the port’s first tenants and now an exemplar of its renegade bent. Rutan designed the Voyager, the first plane to fly around the world without re- fueling, and the rocket-powered SpaceShipOne, which won the Mojave Air and Space Port is a place where dreams take flight. by G A R Y DAU G H T E R S O Up, Up and Away A E R O S P A C E MASP witnessed another world record with the flight of Stratolaunch in April. Photo courtesy StratolaunchC A L I F O R N I A I N V E S T M E NT G U I DE 65 $10 million Ansari X-Prize after completing the first manned private space flight in 2004. “He was a revolutionary in several different dimensions,” says Withrow of Rutan. “None of his aircraft really look the same. We’re not confined to traditional design methodologies. We can design the aircraft to meet the mission. Like Stratolaunch, a lot of the airplanes look really unusual.” More than a mere oddity, the now-retired Rutan was an aerospace pioneer, an early champion of building aircraft bodies from lightweight carbon fiber, a design scheme the wider industry has only recently adopted. “He is pretty much the person who brought composite materials to the aircraft industry,” says Withrow. “We’ve been building complete carbon fiber aircraft for so many years that it’s kind of interesting to see the Boeings of the world start to catch up.” Sprawled across 3,300 acres about a hundred miles north of Los Angeles, Mojave belongs to the pantheon of aerospace test grounds where exotic, secretive designs can be constructed and tested largely free of prying eyes. Its tenants include small, entrepreneurial players with quirky visions that have made it a hotbed of rebel aerospace. It is the first facility in the United States to be licensed for horizontal launches of reusable aircraft capable of entry into space. “We have a very unique environment of innovation and entrepreneurship here,” says Karina Drees, Mojave Air and Space Port manager. “We give our companies permission to test freely, and we’re here to provide the support necessary to make sure their businesses are successful.” Interorbital Systems, founded at MASP by a husband-and-wife team that once formed an industrial new wave band, is designing a modular rocket, Neptune 1, conceived to be fired into space from a portable launch pad. Current mission destinations, the company says, include low Earth Orbit, the Moon, Mars and Venus. Another MASP tenant that’s shooting for the Moon is Masten Space Systems, which recently was awarded a contract from NASA for lunar supply flights beginning in 2021. The company’s XL-1 spacecraft features two payload bays and has the capacity to deliver some 220 pounds of payload to the lunar surface. Other MASP firms have included Virgin Galactic, XCOR Aerospace, Space Port, SpaceX and Orbital Sciences Corporation. Scaled Composites has designed, built and tested prototypes for a number of its Mojave neighbors. “Having our customers in close proximity really helps us build our aircraft quickly,” says Withrow. “You can make decisions faster. The resources you need are available to you very quickly.” For test flights, MASP offers three runways, including one that measures 12,500 feet. “It’s got this great infrastructure,” says Virgin Galactic Test Pilot Mark Stucky. “It’s got multiple runways, and the caliber of people you would only expect in the big cities. But it’s not a big city. It’s out in a rural, small-town environment with just the attitude of getting things done.” Sprawled across 3,300 acres about a hundred miles north of Los Angeles, Mojave belongs to the pantheon of aerospace test grounds where exotic, secretive designs can be constructed and tested largely free of prying eyes. n a brightly lit warehouse on a military base in California, dozens of harried individuals are hunched behind computers and working the phones. Their movements are hurried, their conversations cryptic. A loudspeaker booms, escalating the level of tension: a new message has come from an anonymous hacker, the one who’s threatened a ransomware attack on a hospital. It all seems real. But that cyber defender there? She’s wearing bright green braces. Welcome to the California Cyber Innovation Challenge (CCIC), a two- day competition among high school teams at a former National Guard installation on the state’s central coast. Sponsored by corporate partners including Boeing and Cisco, it is a project of the California Cybersecurity Institute at Cal Poly in San Luis Obispo. Over a weekend each June, youthful competitors employ state-of-the-art tools to extract and collect digital evidence to understand and disrupt a simulated attack. “What makes our competition different is that we put it in a live, immersive set design environment,” says Jimmy Baker, Cal Poly’s interim director for industry outreach. “One of our mottoes is that you learn by doing.” Launched in 2016, the Cyber Innovation Challenge is the cybersecurity championship of the state that leads the nation in technological know-how. The 2019 edition featured 30 teams of up to six members each from schools across the state, quadruple the number of the inaugural competition in 2016. Day One of the challenge tasks students with collecting and analyzing evidence to understand the nature of the “emergency.” “It’s a 21st century version of the game of ‘Clue,’” says Bruce Burton, CCIC Program Director. “You’re trying to figure out who did it, how did they do it, and what kind of digital evidence was there.” The second day features team presentations of evidence to a panel of judges from the military, law enforcement, academia and industry. By attracting youth to cybersecurity careers, Cal Poly is tackling a nationwide threat. by G A R Y DAU G H T E R S I 66 C A L I F O R N I A I N V E S T M E NT G U I DEC A L I F O R N I A I N V E S T M E NT G U I DE 67 This year’s judges included representatives of the California National Guard, Dignity Health, Disney Land Security, Adobe and the U.S. Air Force. “It allows students to ask questions of the industry experts,” says Burton. “This is the closest that a lot of these students will get to be able to see what it’s like to be in the industry while they’re still in high school.” After investigating the hospital scenario, most participating teams uncovered the fact that the perpetrator was a disgruntled IT staffer. Several that looked even deeper learned that the attacker, himself, was being manipulated by a terrorist organization. “That demonstrated to them that it’s not always what it seems, that sometimes you need to gather more information to see the full picture,” says Danielle Borelli, the Cyber Institute’s business services coordinator. The Cyber Innovation Challenge is not just for fun. Surveys show that the worldwide shortage of cybersecurity workers deepens every year. California leads the nation with more than 36,000 unfilled cybersecurity job openings, according to in the industry group, Cyber Seek. “You can’t start early enough to educate on cybersecurity,” says Bill Britton, Cal Poly CIO and vice president of information technology. “Being a part of the Innovation Challenge is a big step toward realizing that goal of strengthening cybersecurity.” “You can’t start early enough to educate on cybersecurity. ” — Bill Britton, CIO, Cal Poly Students from 30 schools took part in the 2019 California Cyber Innovation Challenge. Photo courtesy of Cal PolyNext >