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Big Picture San Diego Blog

January 29, 2019

In 2018, San Diego saw nearly 84,000 unique job postings for STEM-related occupations (EMSI, Job Posting Analytics). While tech heavyweights such as Illumina, Viasat, and now Apple all cite talent as a major reason for their San Diego presence, the region must continuously strive to attract, retain, and develop skilled workers to remain competitive.

As part of San Diego: Life. Changing. – EDC’s talent attraction and retention program – we have launched the ‘Just Say No to Winter’ campaign. The campaign targets three markets – Boston, Chicago, and New York – in the throes of winter via video, subway (Boston T), and social media advertising.

In an attempt to bring top-tier STEM talent to San Diego to fill open positions at the region’s many tech and life sciences companies, the campaign juxtaposes San Diego’s (nearly) year-round sunshine with the harsh winters in markets across the country, while also communicating the focus on the mission-driven companies that call this place home. More at justsaynotowinter.com.

Just Say No To Winter. from San Diego on Vimeo.

EDC is running the campaign in coordination with its Inclusive Growth initiative, which seeks to find employer-driven strategies to build a stronger local talent pipeline, help small businesses compete and address affordability issues in San Diego.

Ad on Boston T (red and orange lines)

January 24, 2019

As part of EDC's Inclusive Growth initiative, we're gathering best practices to help uncover unique approaches to inclusion that can be replicated or scaled locally - including actions from employers and regions outside of San Diego. We hope that sharing these best practices will help inspire San Diego companies/organizations to take on their own. Read The New York Times article below to learn how Microsoft is contributing to affordable housing in the Seattle area:

SEATTLE — The Seattle area, home to both Microsoft and Amazon, is a potent symbol of the affordable housing crisis that has followed the explosive growth of tech hubs. Now Microsoft, arguing that the industry has an interest and responsibility to help people left behind in communities transformed by the boom, is putting up $500 million to help address the problem.

Microsoft’s money represents the most ambitious effort by a tech company to directly address the inequality that has spread in areas where the industry is concentrated, particularly on the West Coast. It will fund construction for homes affordable not only to the company’s own non-tech workers, but also for teachers, firefighters and other middle- and low-income residents.

Microsoft’s move comes less than a year after Amazon successfully pushed to block a new tax in Seattle that would have made large businesses pay a per-employee tax to fund homeless services and the construction of affordable housing. The company said the tax created a disincentive to create jobs. Microsoft, which is based in nearby Redmond, Wash., and has few employees who work in the city, did not take a position on the tax.

The debate about the rapid growth of the tech industry and the inequality that often follows has spilled across the country, particularly as Amazon, with billions of taxpayer subsidies, announced plans to build major campuses in Long Island City, Queens, and Arlington, Va., that would employ a total of at least 50,000 people. In New York, elected officials and residents have raised concerns that Amazon has not made commitments to support affordable housing.

Microsoft has been at the vanguard of warning about the potential negative effects of technology, like privacy or the unintended consequences of artificial intelligence. Executives hope the housing efforts will spur other companies to follow its lead.

“We believe everybody has a role to play, and everybody needs to play their role,” said Brad Smith, Microsoft’s president and chief legal officer.

The company’s strong finances, a sign of its resurgence under Satya Nadella as chief executive, have given it resources to deploy, Mr. Smith said. In October, the company reported net income of $8.8 billion in its most recent quarter, up 34 percent, and it had almost $136 billion in cash and short-term investments on its balance sheet. The company’s stock has risen steadily under Mr. Nadella, and Microsoft is now valued at over $800 billion.

A number of other tech businesses have tried to address the homeless crisis. Amazon’s chief executive, Jeff Bezos, has supported homeless service providers through his personal foundation, and the Salesforce chief executive, Marc Benioff, helped fund a proposition in San Francisco to tax businesses to pay for homeless services. Voters approved the tax in November, rejecting opposition from some tech leaders, including Twitter’s chief executive, Jack Dorsey.

Others plan to build housing for their own employees. Such housing may help with demand, but it has also reinforced the impression that the companies are focused too closely on their own backyards.

“This is long-range thinking by a company that has been around for a long time, and plans to be around for a long time,” said Margaret O’Mara, a professor at the University of Washington who studies the history of tech companies.

Microsoft began researching the region’s housing last summer, after the nasty tax fight in Seattle and around a peak of the housing market. The company analyzed data and hired a consultant to decide how to focus its work. The area’s home prices have almost doubled in the past eight years, and Mr. Smith said he learned that “the region has counterintuitively done less to build middle-income housing than low-income housing, especially in the suburbs.”

That squeeze hits a range of workers. “Of course, we have lots of software engineers, but the reality is that a lot of people work for Microsoft. Cafeteria workers, shuttle drivers,” Mr. Nadella said this week at a meeting with editors at the company’s headquarters. “It is a supply problem, a market failure.”

Microsoft plans to lend $225 million at subsidized rates to preserve and build middle-income housing in six cities near its Redmond headquarters. It will put an additional $250 million into low-income housing across the region. Some of those loans may be made through the federal programs that provide tax breaks for low-income housing.

The company plans to invest the money within three years, and expects most of it to go to Seattle’s suburbs.

The loans could go to private or nonprofit developers, or to governmental groups like the King County Housing Authority. As the loans are repaid, Mr. Smith said, Microsoft plans to lend the money out again to support additional projects.

The remaining $25 million will be grants to local organizations that work with the homeless, including legal aid for people fighting eviction. The Seattle Times reported Wednesday that if the $500 million were put into one project, it would create only about 1,000 units, so instead Microsoft will most likely put smaller amounts in many projects to help build “tens of thousands of units.”

The initial reaction to the company’s announcement was positive.

“There is almost no level of housing that isn’t direly needed,” said Claudia Balducci, a member of the King County Council who helps lead the Regional Affordable Housing Task Force.

report in December by the task force said that the region needs 156,000 more affordable housing units, and will need 88,000 more units by 2040 to accommodate future growth.

A growing body of research has tied the lack of affordable housing to increasing homelessness. A December study from the real estate website Zillow said that was particularly true when households pay more than a third of their income in rent. The New York, Boston, Los Angeles, San Francisco and Seattle regions — the country’s largest tech hubs — have all already crossed that threshold.

“The idea that you can live in your bubble and put your fingers in your ears just doesn’t work anymore,” said Steve Schwartz, head of public affairs at Tableau Software, which is based in Seattle.

Amazon in recent years has worked closely with Mary’s Place, a homeless shelter for women and children in Seattle, and is integrating a shelter for about 65 families into one of its new buildings. Amazon has paid tens of millions of dollars to the city’s affordable housing trust fund as fees to build in the core of Seattle.

Amazon declined to comment.

Google supported the City of Mountain View’s plan to add 10,000 housing units in an area it’s developing, with 20 percent designated for lower-income residents. And Facebook has planned to build 1,500 apartments near its Menlo Park headquarters, with 15 percent to be affordable.

Microsoft has begun a major overhaul of its main campus in Redmond, committing billions of dollars in renovations and connecting it to a light rail station under construction. The company helped finance a successful campaign for voters to approve more property taxes to pay for transportation. This new investment in housing takes its commitments a step further.

“This is where Microsoft is going to be, and the region needs to work,” Ms. Balducci said. “I don’t think this is wholly altruism.”

January 22, 2019

Small businesses are the backbone of the San Diego economy, representing 98 percent of local businesses and employing roughly 59 percent of the workforce. According to a new study by San Diego Regional EDC, in partnership with the San Diego & Imperial Small Business Development Center, small businesses are one of the primary drivers of local economic growth, with 41 percent of the region’s small businesses intending to hire more employees in the next two years.

Based on a survey of more than 500 respondents, “An In-Depth Look at San Diego's Small Business Ecosystem” uncovers insight about the region’s small businesses – those with fewer than 100 employees – and quantifies the number of firms, workforce, demographic and industry breakdown, business outlook and more across San Diego and Imperial counties.

The study found 36 percent of small businesses are women-owned, 20 percent are minority-owned, and 10 percent are veteran-owned.

 “This study helps reinforce what we already know: San Diego’s small businesses are the cornerstone of our economy, employing nearly 700,000 San Diegans and driving innovation across the world,” said Kirby Brady, Research Director, San Diego Regional EDC.

Encompassing industries from healthcare, finance, food and beverage, education, construction and real estate, San Diego’s small businesses are driving the local economy – representing two-thirds of current regional employment.

KEY FINDINGS

  • Small businesses employ 697,000 workers, making up 59 percent of San Diego’s total workforce. 
  • 27 percent of the region’s workers are in businesses with fewer than 20 employees; while more than 64 percent of firms employ fewer than five people.
  • 69 percent of small businesses reported financial growth in the past two years.
  • 59 percent of the region’s small businesses have local customers.
  • Of firms surveyed, roughly 43 percent expect to grow in terms of workforce and 81 percent expect to grow in terms of financial performance.
  • The majority of companies who have been operating less than two years generate less than $100K in annual revenue, while more than half of established companies (10 years or longer) generate more than $1M in revenue annually.
  • Small business growth challenges:
    • Eighty-five percent of locally-serving small business said ‘sales and new business’ is a challenge, including 25 percent who said it is the most significant challenge.
    • Fourteen percent of small businesses said that ‘financial stability and cash flow’ is the most significant challenge.

“In order to better serve the needs of our small businesses and entrepreneurs, it’s important that we understand their perceptions and experiences," said Danny Fitzgerald, Associate Regional Director of San Diego & Imperial SBDC Network. “This study will enable us to create new and enhance existing programming to support small business growth across the region.”

Furthermore, with a commitment to lifting up San Diego small businesses, EDC has launched an Inclusive Growth initiative in order to develop measurable targets and actionable recommendations to promote small business growth, talent development and affordability.

The SBDC has become our trusted 'go to' resource for just about everything. They have connected us to the vast networks in San Diego that has brought us new customers and important industry connections. We wouldn't be where we are today without them,” said Nic Halverson, Founder/CEO of Waitz App.

The report was produced by San Diego Regional EDC, with support from the San Diego & Imperial Small Business Development Center. Read the full study here.

For more research from San Diego Regional EDC, visit sandiegobusiness.org/research-center.

 

January 18, 2019

Each month the California Employment Development Department (EDD) releases employment data for the prior month. This edition of San Diego's Economic Pulse covers December 2018. Check out EDC's research bureau for more data and stats about San Diego's economy. 

Highlights include:

  • The region’s unemployment rate was 3.2 percent in December, unchanged from a revised 3.2 percent in November, and below the year-ago estimate of 3.3 percent.
  • San Diego’s unemployment rate remains below both the state rate of 4.1 percent and the national rate of 3.7 percent.
  • The labor force shrunk by 3,000 workers during the month and is now up 37,100 compared to a year ago.
  • Total nonfarm employment is down 900 in December and up 28,400 over the year.
  • The largest employment gain over the year occurred in professional and business services, which added 12,600 jobs. Professional, scientific, and technical services were responsible for 46 percent of the increase – up 5,800 jobs.

 

San Diego's Economic Pulse - January 2019 from San Diego Regional EDC on Vimeo.

January 8, 2019

In late November 2018, EDC released a new study, San Diego's Precision HealthEcosystem,” which explores the impact of the region’s precision health cluster and quantifies the number of firms, venture capital, and patents, as well the broader cluster across California. The web-based study  precisionhealthSD.org – includes a historic timeline, cluster map, local and state overviews, and a series of video testimonials from local business leaders at CBRE and Rady Children's Institute for Genomic Medicine.

Hear how precision medicine changed the lives of Baby Maverick and Bill Bacon below:

Precision Health: Baby Maverick's Story from San Diego Regional EDC on Vimeo.

 

Precision Health: Bill Bacon's Story from San Diego Regional EDC on Vimeo.

Learn more at precisionhealthSD.org and #precisionhealthSD. Executive summary available here.

January 7, 2019
This op-ed was originally published in the San Diego Union-Tribune, authored by Nikia Clarke, Cynthia Curiel, and Patricia Prado-Olmos.
 
As high school seniors throughout the country complete final exams and eagerly await college acceptance letters, only 37 percent of Hispanic and black students in San Diego will be college-ready when they finish high school. This lack of preparedness significantly affects San Diego’s competitiveness since these groups already represent a large (and growing) part of our population. And while talent attraction efforts are an important facet of economic growth, the nationwide competition for skilled talent combined with San Diego’s high cost of living make relocating talent from elsewhere increasingly difficult. Now more than ever, San Diego employers must focus on building a strong local talent pipeline, or we — as a region — simply won’t survive.
 
The success of San Diego’s innovation economy is inextricably linked to the region’s talent pool. In fact, projections indicate that San Diego will need to double its annual production of high-skilled college graduates by the year 2030 in order to meet the demands of the future economy, ultimately developing interventions that impact today’s seventh-graders. Though this can only happen through extensive systemic changes, we can rest assured knowing that we don’t have to look far to access a viable workforce. San Diego doesn’t have a talent supply problem; it has a talent development problem.
 
San Diego is home to a large pool of untapped talent that is vastly underrepresented in the innovation economy. Hispanics represent San Diego’s fastest growing population and will become the region’s largest demographic group by 2030; yet 85 percent of Hispanics in the region do not hold a bachelor’s degree. This presents an opportunity for employers to develop this local talent and create sustainable inflows of new employees directly from their surrounding communities.
 
To address these regional challenges, the San Diego Regional Economic Development Corp. (EDC) launched an Inclusive Growth initiative this year, and convened an employer-led steering committee to help develop and drive an agenda that maximizes economic growth through inclusion. Informing this work, EDC recently released an interactive web study — talent.inclusivesd.org — indicating that talent shortages pose a significant threat to San Diego’s economic sustainability.
 
The 40-company steering committee is encouraging other employers to focus efforts on talent development programs that directly equip the local workforce with the skills they seek in employees. The committee has endorsed “20,000 skilled workers by 2030” as a regional goal, along with a set of employer-focused recommendations around transparency, engagement and investment. These recommendations serve to build a platform in which people can track the region’s progress, as well as provide employers with programs they can adopt and implement at their own organizations.
 
As a key leader in EDC’s Inclusive Growth Steering Committee, defense technology company Northrop Grumman plans to pilot a talent pipeline program in 2019 that will link STEM education opportunities from K-12 through college. The company is creating a new pathway for high school students to obtain STEM-focused degrees through close collaboration with local community colleges and practical on-the-job experience. By helping reduce the barriers many face when considering college, Northrop seeks to empower students and their families to pursue both educational and career opportunities, while creating a sustainable source of high-skilled talent.
 
Cal State San Marcos, another steering committee leader, has collaborated with Northrop Grumman to ensure that local education systems and curriculum are equipping students with the skills required to fill these higher-paying jobs. Cal State San Marcos works closely with a range of industries to design academic programs connected to workforce needs, such as a master’s of science in cybersecurity and the university’s newly launched engineering program.
 
Inclusive growth is not just about “doing the right thing” — it’s about economics, and making sure our community is set up for success. In 2019, EDC will continue to work with its steering committee to develop employer-focused recommendations around two other inclusive growth goals: equipping small businesses to compete and addressing the affordability crisis.
 
This process is complex and will take time; San Diego’s continued growth and success will largely depend on collaboration among companies, universities, philanthropic organizations and local government to ensure that inclusive growth practices are integrated into future decision-making. As a region, and especially as an economic development organization, if we are not doing this right, we should not be doing anything at all. Our hope is that when we tell San Diego’s story in the not-too-distant future, we can tell the story of a region that not only excels in technology and innovation, but also one that includes and uplifts all of its residents — a place where everyone can thrive, no matter your ZIP code.
 
Clarke is vice president of economic development at San Diego Regional Economic Development Corp. Curiel is vice president of communications at Northrop Grumman Corp., Aerospace Systems. Prado-Olmos is vice president of community engagement at Cal State San Marcos.
 
Follow along and learn more at InclusiveSD.org.
December 19, 2018

Every quarter San Diego Regional EDC analyzes key economic indicators that are important to understanding the regional economy and the region’s standing relative to the 25 most populous metropolitan areas in the U.S. This issue covers data from Q3 2018.

Following an increase in employment in Q2, San Diego and 12 of the most populous metros, experienced a decline in total nonfarm employment in Q3. Winding down from the summer season, the region shed 4,700 jobs - a 0.3 percent decrease in employment during the quarter. Compared to a year ago, nonfarm employment was up 28,800 jobs, or 2 percent.

Meanwhile, San Diego’s unemployment rate was 3.2 percent in Q3, down from 3.7 percent in Q2.

Key findings from the snapshot:

  • San Diego closed Q3 with an unemployment rate of 3.2 percent and the tenth lowest among the 25 most populous metros.
  • With the summer tourist season coming to an end, the leisure and hospitality sector recorded the largest quarterly loss, shedding 2,300 jobs in Q3. Other contributors to quarterly employment loss were trade, transportation, and utilities, together losing 2,100 jobs. 
  • Year-over-year, the region’s median home price continued to climb, growing by 7.1 percent.
  • VC dollars in the region increased 63.5 percent compared to a year ago.

The Quarterly Economic Snapshot analyzes key economic indicators that are important to understanding the regional economy and the region’s standing relative to the 25 most populous metropolitan areas in the U.S. This releases includes data from July to September (Q3) 2018.

December 17, 2018

At the end of each year, we like to look back on all the good this year brought with it. And with San Diego as our home, there's much to be thankful for - from an influx of startup growth, to top rankings and thriving educational systems. Read on below to see the top themes we saw come out of 2018.

From Team EDC, thank you for being part of our #SDlifechanging story.

Not a HQ town, but now we have these....
Qualcomm aside, San Diego is not often thought of as a headquarter town; but that doesn't mean large companies don't see value in setting up operations in the region. This year, we saw these tech heavyweights plant roots in San Diego:

  • Data analytics company Teradata relocated its headquarters to San Diego from Dayton, Ohio
  • Amazon to hire up to 350 at its new UTC campus
  • Walmart Labs opened 30,000 sqft in Carlsbad; to double tech workforce
  • WrikeCloudbeds, and Vertex Pharmaceuticals made significant investments in local expansions
  • And most recently, Apple announced it will be expanding to San Diego, supporting up to 1,000 jobs

SD leads charge in the healthcare revolution
Home to more than 1,200 life sciences companies and more than 80 research institutes, the San Diego region is on the brink of scientific breakthrough each and every day. This year, we saw Rady Children's Institute for Genomic Medicine and Illumina set the Guinness world record for fastest genetic diagnoses in newborns; Scripps Translational Science Institute was awarded a $34+ million grant for its work in digital health; Salk scientist Janelle Ayres received $1 million to fund her microbial research; Sanford Burnham Prebys Medical Discovery Institute identified never-before-seen DNA recombination in the brain linked to Alzheimer's disease; local biotechs PfenexSynthorx, and Trovagene went public; Illumina acquired Edico Genome and Pacific Biosciences in separate deals worth more than $2.2 billion; LunaDNA launched the first-of-its-kind platform that offers stock for DNA data; and much more #SDlifechanging work.

SD selected as national UAS testing center
With a continued commitment to growing San Diego’s reputation as a hub for innovation, the City of San Diego, City of Chula Vista, and EDC announced that San Diego has been selected to participate in a new program by the U.S. Department of Transportation to advance the testing of unmanned aircraft technology, grow the innovation economy, and create jobs. As part of the program, the Chula Vista Police Department has begun to deploy drones for public safety operations. Read more.

Local colleges expand, bolster talent pipeline
San Diego's educational institutions produce a top-tier talent pipeline for employers both here and abroad. And now more than ever, San Diego State University, UC San Diego, San Diego Community College District, and others are expanding programs and campuses to promote inclusion and support industry needs. This year's successes include:

  • CSU San Marcos announced the creation of its bachelor of science in computer engineering thanks to more than $1.5 million in donations from local companies and their employees
  • Mira Costa and Palomar colleges to waive tuition for all first-time, full-time students as part of California College Promise program
  • Philanthropist Denny Sanford made a landmark, $100 million gift to the National University System to expand its social emotional learning program
  • Southwestern College was awarded $325,000 in grants to fund services for veteran and undocumented students
  • San Diego City College expanded its cybersecurity program to include associate and certificate opportunities
  • With its first female president Adela de la Torre at the helm, San Diego State University is set to launch a new Big Data Analytics graduate program
  • UC San Diego received a record $75 million from computer science alum Taner Halicioğlu to grow its new data science institute

SD companies rake in big bucks for growth
Throughout 2018, San Diego saw more than 80 venture capital deals. While the number of deals is down from last year, the cash totals are record-breaking in more ways than one. San Diego companies raised more $1.8 billion (as of Q3), with the vast majority – $1.5 billion – going to healthcare companies. The region is on pace to have its best year for VC since 2000. Top deals include SamumedIdeaya Biosciences, Gossamer BioGrailHelix, and dozens more.

SD impact felt 'round the world'
A globally connected region is a more successful region, which is why its crucial that San Diego innovation is seen and felt across the world. This year, we saw this locally-made technology make impacts in key international markets:

  • Cubic Transportation Systems secured contracts to provide its mass-transit ticketing services to Queensland and Sydney, Australia, as well as other international cities
  • Inc. 5000 company Scientist.com announced its expansion into Japan as part of a WTC-led trade mission
  • Forge Therapeutics is set to double its local footprint due in part to an international deal signed during a WTC-led trade mission to the UK
  • General Atomics Aeronautical Systems secured an $81 million contract from the U.S. Air Force Life Cycle Management Center for the UK
  • Carlsbad-based Viasat added AeromexicoFinnair, and EL AL Israel Airline to the list of international airlines it supplies with inflight Wi-Fi
  • San Marcos-based Ocean Reef Group donated its full-face dive masks used to rescue a youth soccer team trapped in a flooded cave in Thailand

SD tops the charts
San Diego held its own in many of this year's top rankings. From the region's entrepreneurial culture to its commitment to sustainability and innovation, top-tier publications and organizations took notice of San Diego. Rankings include: 

 

December 13, 2018

Apple has announced it will be planting roots in San Diego, solidifying what we already knew about our region: San Diego is an innovative tech hub, home to some of the best and brightest talent in the world. While we're not a headquarters town, we continue to see an influx of local expansions from some of the world's largest companies. San Diego Regional EDC's official statement below:

“Joining an influx of other large tech firms like Amazon, Google and Teradata, Apple is setting up a significant operation in San Diego to take advantage of the region’s STEM talent. We look forward to building a stronger working relationship with Apple to help them grow and succeed in this already thriving tech hub.” Mark Cafferty, president & CEO, San Diego Regional EDC

December 12, 2018

Together in 2018

EDC put San Diego on the global stage; made the case for inclusion as an economic imperative; and helped catalyze company growth here and abroad. Watch our full story below.

With and through EDC's investors and partners, we will continue to build a thriving and inclusive San Diego. Here's to another year, in it together.