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Big Picture San Diego Blog

June 19, 2014

Today, the Brookings Institution released its first-ever metro-level analysis of foreign direct investment’s role in the San Diego metropolitan area’s economy as part of its Global Cities Initiative, a joint project of the Brookings Institution and JPMorgan Chase. The report analyzes the types of foreign-owned businesses located in the San Diego metropolitan area, outlines the region’s sources of foreign investment and shows that 48,370 jobs are supported by FDI locally.

The research finds that San Diego has seen a steady climb in its FDI ranking, which is based on the top 100 most populous metropolitan areas in the US. In 1991, San Diego ranked 31 on the list with 25,600 jobs in foreign-owned establishments (FOE). In 2011, the region ranked 24th with 48,730 jobs, signifying more than a 90 percent increase in the number of jobs in FOEs in a 20 year period. Other key finds specific to the San Diego region are bulleted out below:

  • Industries with the highest concentration of jobs in FOEs include precision instruments (unmanned systems, medical devices), grocery stores and semiconductors
  • The largest share of jobs by FOE were created from mergers and acquisitions (36 percent)
  • FOEs have become more goods-intensive. The most recent data shows that 2011 was the first time more jobs in FOEs were concentrated in goods as opposed to services
  • Tokyo (13 percent) followed by London (12.1 percent) are the top sources of FDI by city

Since April 2014, San Diego has been part of a Global Cities Initiative pilot program to create and implement metropolitan plans to secure and sustain FDI. The FDI in U.S. Metro Areas report will help the region’s Global Cities Initiative team – comprised of leadership from the City of San Diego, San Diego Regional EDC, BIOCOM and Qualcomm – design its plan to maximize the amount, quality and economic benefits of FDI in the region and integrate FDI into an overall smart economic global trade and investment strategy.  San Diego is one of two cities - and the only in California - that Brookings selected to publish and develop its FDI plan.

“San Diego is global city,” said Mark Cafferty, president and CEO of San Diego Regional EDC. “It’s no coincidence that our top two FDI-generating cities– Tokyo and London – are also the two direct international flights out of San Diego. This report gives the San Diego region a key resource to take full advantage of this important economic development tool.”

 

While the United States remains the world’s top destination for foreign investment, its position has been steadily eroding. Between 1999 and 2012, the U.S. share of global FDI inflows dropped from a high of 26 percent to just 12 percent. However, metropolitan areas are the country’s strongest magnets for global investment and so understanding the San Diego metro area’s FDI starting point will help the region fully leverage FDI to advance its economic development.

Brookings Panel in Seattle

According to the Brookings report, the benefits of FDI extend well beyond the millions of jobs supported. For example, U.S. affiliates of foreign companies pay well above average wages. These companies strengthen U.S. trade, producing more than one-fifth of all U.S. goods exports. Additionally, nineteen percent of all corporate R&D expenditures in the United States come from foreign-owned companies. Finally, 48 percent of total FDI flows in 2012 went to manufacturing industries, shoring up the nation’s eroding production base.

While metro areas have traditionally focused on attracting greenfield investment, this new data shows that most FDI enters regions through mergers and acquisitions. In the average year, mergers and acquisitions account for 87 percent of all FDI inflows into the United States. These investments have significant economic potential—for example, cash infusions can help local businesses expand, and new access to global distribution networks can boost exports.

“This new data allows U.S. metro areas, for the first time, better grasp FDI sources and trends, and its impact on local economies,” said Brad McDearman, Brookings fellow and director of metro trade and investment. “As part of the Global Cities Initiative, San Diego is now at the forefront of U.S. metro areas seeking to position themselves as more globally fluent and competitive regions by developing a metropolitan global trade and investment plan.”

Next week, leaders from San Diego will travel to Louisville, Ky. to take part in a Global Cities Initiative panel. 

June 19, 2014

BST Nano Carbon's Rancho Bernardo HQ

 

More than 1,000 jobs are coming to San Diego and Imperial Counties thanks to California Competes, a new discretionary economic incentive that are part of the Governor’s Office of Business and Economic Development’s efforts to encourage job creation and economic development throughout the state.

“The California Competes tax credit encourages businesses, large and small, to expand in California and create good paying jobs in a variety of industries,” said GO-Biz Director Kish Rajan.

San Diego and Imperial County companies also received more than 65 percent - $4.83 million  of the $7.37 million allocated for small businesses - under the program meaning that the region raked in more small business credits than any other area in the state combined.

other area in the state combined.

In total, one Imperial County and four San Diego companies were approved for the economic incentives, which are collectively valued at $7.43 million. According to documents filed by the respective companies, the incentives are expected to create 1,144 jobs. San Diego’s diverse industries, including military, maritime, biotech and advanced manufacturing, are well-represented in the credit recipients.

“The companies selected for California Competes are indicative of the diverse industries that make up San Diego’s economy,” said Mark Cafferty, president & CEO of San Diego Regional EDC. “We frequently hear that businesses choose San Diego because of its talented workforce and its dynamic innovation ecosystem. We believe that GO-BIZ’s California Competes program will give more companies a reason to grow and expand within our region.”

A chart below lists recipient details:

Company

Location

Jobs

Tax Credit

Petco

San Diego

263

$2,600,000

BST Nano Carbon

San Diego

632

$1,450,000

Sparsha

Oceanside

21

$250,000

American Marine Abatement Services

National City

6

$30,000

CE&P Imperial Valley

Brawley (IV)

222

$3,100,000

 

Total:

1,144

$7,430,000

In an effort to bolster economic development efforts throughout the San Diego/Imperial Regional, San Diego Regional EDC (EDC) outreached to companies and shepherded many through the application process. In 2013, EDC collaborated with GO-BIZ to host two free workshops to educate businesses about the process.

BST Nano Carbon, an advanced manufacturer based in Rancho Bernardo, was one company EDC helped with the application process. The innovator, who works with companies across industries ranging from sporting goods to medical devices and military, will use the funds to create 632 high-paying jobs in San Diego and Temecula.

 “BST Nano Carbon is proud to call San Diego home. Not only do our employees enjoy living here, but strategically, the San Diego area provides access to a skilled workforce and the diverse range of leading companies that represent the industries we serve,” said Randy M. Beck, CEO at BST Nano Carbon. “GO-BIZ has given us another reason we’re proud to be a California-based nano materials manufacturing company. With their assistance, we plan to bring more than 600 jobs to the San Diego area over the next five years.”

Statewide, 31 companies will be receiving the first allocation of California Competes tax credits totaling $30 million. The funds will increase to $150 million during the 2014/2015 fiscal year.

The California Competes tax credit is part of the Governor’s Economic Development Initiative (GEDI) which Governor Brown signed legislation to enact last year (AB 93 and SB 90). The initiative also includes a hiring credit for areas of high unemployment and poverty which went into effect on January 1st, 2014 and a sales and use tax exemption for the purchase of manufacturing, biotech and R&D equipment which is available to companies starting July 1st, 2014.

Companies interested in learning more about the credits are welcome to contact San Diego Regional EDC for assistance. EDC does not charge for these services. 

June 13, 2014

San Diego’s story is one of innovation and collaboration. Not only is San Diego home to the world’s smartest company and the premier telecommunications giant, but it is also at the forefront of diverse industries ranging from cybersecurity to genomics, sports and active lifestyle and cleantech. The region’s startup community is thriving and it is full of talented people solving some of the world’s toughest problems.

But don’t just take it from us. According to Bruce Katz of the Brooking’s Institution, San Diego embodies the metropolitan revolution. Katz, Mark Cafferty of San Diego Regional EDC and San Diego-based Genomics Pioneer J. Craig Venter are shown in a video below talking about how San Diego can be a model of growth for global regions.

 

 

As the world’s population pivots to cities, metropolitans have become with large-scale innovation, quality jobs and global economic opportunities. The top 100 U.S. metro areas occupy 12 percent of the nation’s landmass, yet they generate 68 percent of jobs, 75 percent of national GDP, and are home to 65 percent of the population. Part of San Diego’s success lies in its ability to work together to move the innovation ecosystem forward.

“We have to collaborate to compete,” said Mark Cafferty, president and CEO of San Diego Regional EDC. “We have companies - that many would perceive as competitors - working together to secure San Diego’s cyber infrastructure. We have public/private collaborations working to increase the region’s global footprint. We have everyone from entrepreneurs to Fortune 500 companies talking to one another about elevating the region on a global scale.”

The fact that San Diego is number one or two in biotechnology has created a huge industry here,” said Genomics Pioneer Craig Venter. “The universities provide a huge talent pool and so we found hiring new highly-trained people very easy.”

San Diego’s participation in the series is part of a deliberate approach to better tell the region’s dynamic story and cement its global identity.

As Bruce Katz says, “You don’t attract investment from around the world unless you’re really good at what you do….and that’s the San Diego story.”

We couldn't have said it better ourselves.

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May 29, 2014

On May 28, U.S. Secretary of Commerce Penny Pritzker announced the first 12 communities that have been selected to participate in the Investing in Manufacturing Communities Partnership (IMCP). Joining forces with many partners across the region, San Diego is included in the Southern California Designation, which was led by a team out of the University of Southern California Center for Economic Development.

The IMCP program is an initiative designed to revolutionize the way federal agencies leverage economic development funds by encouraging communities to develop comprehensive economic development strategies that will strengthen their competitive edge for attracting global manufacturing and supply chain investments.

“The 12 Manufacturing Communities announced today represent a diverse group of communities with the most comprehensive economic development plans to attract business investment that will increase their competitiveness,” said U.S. Secretary of Commerce Penny Pritzker. “IMCP is a critical part of our ‘Open for Business Agenda’ to strengthen the American manufacturing sector and attract more investment to the United States. Innovative programs like IMCP encourage American communities to work together to craft  strong, clear, strategic plans to attract manufacturing investment and jobs to transform themselves into globally competitive commercial hubs.”

So what exactly does this mean for San Diego and the Southern California region? As home to the world’s largest concentration of military personnel and with more than 80 percent of the state’s aerospace workers, the Advanced Manufacturing Partnership of Southern California Manufacturing Community (AMP SoCal) will concentrate on further transforming the aerospace and defense industry. Home to companies including Northrop Grumman, the Southern California region is positioned to be in the vanguard of  future avionics and aerospace industries.

Of course, you can’t become a leader in aerospace and defense without the workforce to get you there. Part of the strategy will involve a significant workforce training component that will partner with local colleges and universities to streamline certificate programs. The strategy also focuses on building a supplier network, research and innovation, infrastructure and site development. The strategy will also focus on creating an export acceleration workshop, which dovetails nicely into the Global San Diego Export plan, which was released in conjunction with the Brookings Institution this year.

On the local front, the partnership involves the City of San Diego, CONNECT, UC San Diego, Cleantech San Diego, San Diego East County Economic Development Council, San Diego Workforce Partnership and San Diego Regional EDC.

Following the success of last year’s MFG Day, on Oct. 3, many of the partners listed above will team up with local companies as they open their doors to the public to showcase an industry that supports nearly 90,000 local jobs. Stay tuned for more details.

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May 20, 2014
San Diego Digital Ambassadors Everybody recognizes San Diego’s enviable weather, but one of our greatest competitive strengths lies in the people who call this place home. San Diego is full of really smart people solving hard problems, making cool things and changing lives. This is the story we need to tell.
 
So, we've gone straight to the source. The videos below are part of our broader workforce talent attraction and retention efforts. They are not branded to EDC. We encourage you to share the videos on social media using the hashtag #GoSanDiego and stay tuned for information about a new talent attraction website, vimeo channel and our digital ambassadors program.

Tweet Worthy:

  • "We were in Vegas, but we saw a huge opportunity here...so we moved our company to DT SD"
  • Why SD? "We wanted to be around companies we could collaborate with & bounce ideas off of"

In search of opportunity and quality of life, Brandisty co-founders Alex Rolek and Michael Sacca decided to move their company from Las Vegas to San Diego. What they found in San Diego is an attainable quality of life and a growing startup community that fosters collaboration. 

Meet Michael Sacca, Brandisty from GoSanDiego on Vimeo

Check out Brandisty: brandisty.com

 

Tweet Worthy:

  • "I can only see that SD's tech community is going to get bigger and better"
While at UC San Diego, David Fischer became fascinated with home brewing after exposure to the growing San Diego craft beer movement.  Back then, he had an equally fascinating internship as a developer at Qualcomm. After successfully progressing at Qualcomm, he took a job at Amazon in Irvine and commuted via train. Fast forward a few years: David learned of a job opportunity here in San Diego combining two things he loves: programming and craft beer. This is David’s story at TapHunter, one of San Diego’s many growing startups.
 

Meet David Fischer, TapHunter from GoSanDiego on Vimeo.

Check out TapHunter and download the app: TapHunter.com

 

 

 

May 16, 2014

This post is part of an ongoing monthly blog series dedicated to the California Employment Development Department (EDD) monthly employment release.

2014_04_Unemployment

The California Employment Development Department (EDD) released statewide county employment data today for the April 2014 period. The big headline in this month’s report is that San Diego County's unemployment rate has dropped nearly a full percentage point, down to 6.0 percent from 6.9 percent in March 2014 and 7.2 percent in April 2013. While this number appears encouraging, it is also noteworthy that the labor force lost 25,000 workers. This is the single largest month-to-month drop in the labor force on record (since 2000), and the lowest the labor force has been since October 2011. Meanwhile, the economy added 2,900 nonfarm jobs from March to April, which makes this month's report particularly perplexing. 

There are several possible explanations for this drastic decline in the labor force. First and most commonly, many long-term unemployed have simply given up looking for work or found work outside of the San Diego region. This most likely explains the 16,000 unemployed who exited the labor force. There may also have been less people who decided to enter the labor force, possibly out of lack of confidence in employment opportunities or lack of relevant skills. However, we also saw 9,000 employed persons leave the labor force, presumably because of a combination of retirements, seasonal exits and moves to other regions. It is not uncommon to see the labor force seasonally decline from March to April, just not to this magnitude. 

2014_04_LF

It appears contradictory that despite this massive labor force decline, the economy actually added jobs. It is worth noting that from February to March, the economy added 12,400 jobs while the labor force lost 11,200 workers. This is likely due to a discrepancy in the surveying, since labor force numbers come from household surveys and job numbers come from surveys of businesses. It is also possible that those who were employed found second jobs. The result is likely a mix of all of these factors, which leaves us with an unusual report for April.

As noted, the economy added 2,900 jobs total from March to April 2014. The private sector outperformed by adding 3,400 jobs in the month, with government job decline accounting for the 500 less jobs. Service providing industries added most of the jobs, while we saw job losses from the goods producing industries like construction and manufacturing.

2014_04_Total

The job picture looks even more promising when compared to last year. From April 2013 to April 2014, the economy added 29,000 jobs, a 2.2 percent increase. The private sector added 26,600 jobs over the year and we saw positive growth in the manufacturing and construction industries, which added 1,100 and 4,300 jobs, respectively. The 4,300 construction jobs added constitutes a 7.2 percent increase over the year. We also saw growth in our important traded economies, with leisure and hospitality adding 4,300 jobs and professional, scientific and technical services adding 6,200 jobs.

We will likely need to wait until future job reports to determine if this unusual report is an anomaly or an indication of larger trends. Historically, we have seen the labor force continue to decline or remain relatively flat from April to May, but with the recent major change in labor force amidst job creation, we may see people coming back to the labor force in the coming months.

Our Economic Indicators Dashboard will show how this compares to other US metros and the US total rate when that information is released in the coming weeks.

April 22, 2014

This is the inaugural post of an ongoing monthly blog series dedicated to the California Employment Development Department (EDD) monthly employment release.

2014_03_Total

The California Employment Development Department (EDD)released statewide county employment data on Friday for the March 2014 period. The biggest news coming out of this month’s report is that San Diego County has finally exceeded its historical seasonally unadjusted employment peak set in December 2007. EDD reported that the region now has 1,335,200 non-farm jobs as of March 2014, exceeding the previous peak of 1,333,400 jobs. Economists expected employment to rebound above its pre-recession peak sometime in 2014, and it is encouraging to exceed that mark as early as March.

Private employment, which was reported at 1,100,300 jobs, has yet to exceed its peak of 1,110,100 set in August 2007. However, March 2014 private employment was the second highest ever recorded. The region added 30,100 private industry jobs from March 2013 to March 2014, with 10,600 of those jobs being added from February to March 2014.

2014_03_MFG_CONST

San Diego’s construction and manufacturing industries continue to pick up steam as the economy rebounds from the recession. The construction industry added 2,000 jobs from February to March 2014, and added 5,800 jobs from March 2013 to March 2014. While manufacturing growth was more modest, the industry added 500 jobs from February to March and added 1,200 jobs from the previous year.

Professional and business services added 6,500 jobs from March 2013 to March 2014, the most of any industry in the region. Professional and business services includes much of the innovation economy activity, along with critical service providers like legal services, architecture services and enterprise management. It is also the largest industry in San Diego, employing more than 228,000 as of March 2014. San Diego’s leisure and hospitality industry, otherwise known as tourism, added 6,100 jobs from March 2013 to March 2014, with 3,400 of those jobs added from February to March 2014. Both of these industries had already exceeded their pre-recession peaks in 2013.

2014_03_Unemployment

The county’s seasonally unadjusted unemployment rate dropped to 6.9 percent in March 2014, down from 7.0 percent in February 2014 and 7.8 percent in March 2013. California’s statewide unemployment rate was 8.4 percent in March 2014, well above San Diego’s posted rate. Our Economic Indicators Dashboard will show how this compares to other US metros and the US total rate when that information is released in the coming weeks.

April 21, 2014

When MIT set out to the name the world’s smartest company in February, they didn’t look to count the number of patents or PHds or even stock gains; instead, they asked themselves whether a company had made strides which have helped redefine its field. The answer was not a company located in Silicon Valley or Seoul or London. The answer was – and still is – right here in San Diego. That company is Illumina.

Founded in 1998, Illumina has not only helped build the genomics field, but also has redefined it. In a time when medicine and medical research are becoming increasingly expensive, Illumina has made personalized medicine more attainable. They have made it feasible to sequence genomes for under $1,000 a patient.

Last week, more than 15 EDC stakeholders got to experience this innovation first hand when they toured Illumina’s UTC headquarters. With its wide array of platforms, Illumina is sought out by researchers and healthcare professionals as well as ancestry companies, such as Ancestry.com and 23 & Me to provide valuable genetic information. Each day, Illumina and its 3,000 global employees- 1,500 in San Diego - work to improve lives around the world by unlocking the power of the genome.

On the tour of Illumina’s campus, guides walked participants through R&D space, on-site manufacturing facilities and a suite of amenities available to Illumina’s employees, including a state-of-the-art fitness center, coffee shops, an amphitheater and the cafeteria, which employees admit is the most effective and efficient meeting space on campus. Collaboration is at Illumina’s core and all of these spaces provide opportunities for employees to exchange information and generate new ideas, developing the next ideas that will fuel Illumina’s growth as a global brand.

As MIT notes when talking about their rankings, “It might sound difficult to define what makes a smart company, but you know one when you see it.” Thanks in part to Illumina, San Diego is showing the rest of the world what smart really means.


April 15, 2014

Jacobs School Research EXPO UCSD

Capital can be a pain point for many entrepreneurs. Despite the odds, many San Diego companies have found funding. According to the PricewaterhouseCoopers MoneyTree report, San Diego companies were involved in 23 venture capital deals and received more than $145 million in funding in Q4 of 2013. However, for a variety of reasons, overall venture capital invested in San Diego still took a dip between 2012 and 2013.

A group of alumni of the University of California, San Diego may help change that. They have created a venture capital fund—the Triton Technology Fund—that is specifically focused on commercializing innovations by UC San Diego faculty, students and alumni. (Read the Xconomy story here.)

The Triton Technology Fund will invest in companies affiliated with UC San Diego faculty, students and alumni with innovations in the software, communications, electronics, materials, medical devices and instruments sectors. The goal is to leverage breakthroughs in these areas to provide solutions for business-to-business enterprises.

“Commercializing university research requires external expertise and investment. The Triton Technology Fund is going to accelerate the success of our innovators by injecting crucial resources into our entrepreneurism and commercialization initiatives here at the Jacobs School of Engineering and across all of UC San Diego and its alumni networks,” said Albert P. Pisano, Dean of the UC San Diego Jacobs School of Engineering in a statement announcing the fund.

The university is a breeding ground for ideas and innovation. To date, UC San Diego faculty and alumni have been credited with forming more than 500 startup companies. Some of these innovations can be seen in action this Thursday when the Jacobs School of Engineering hosts its annual Research Expo event. UC San Diego engineering graduate students will present their latest research at the 200-strong poster session at Research Expo on Thursday April 17 from 2:00 to 4:30 pm on the UC San Diego campus. (You can scan poster titles or search by industry application area online.)

The Jacobs School of Engineering’s Research Expo, now in its 33rd year, also includes ten-minute faculty tech talks covering regenerative medicine, big data, video processing for medical applications, robotics education, wearable sensors, and aerospace safety. Registration is available onsite.

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April 11, 2014
Every quarter, San Diego Regional EDC analyzes key economic metrics that are important to understanding the regional economy and San Diego’s standing relative to other major metropolitan areas in the U.S. This issue covers data from the October 2013 to January 2014 quarter. 
 
In this issue, EDC presents updates on trends in employment, real estate and venture capital, with a special spotlight on the cybersecurity industry in San Diego. The spotlight revealed details of a recent San Diego industry study on the subject, including employment trends and company reactions. 
 
Industry Highlights
 
  • San Diego County’s January 2014 unemployment rate was down 1.6 percentage points from January 2013. 
  • The San Diego region added 25,900 jobs from January 2013 to January 2014. 
  • San Diego had the third lowest foreclosure rate among recorded major U.S. metropolitan areas in January 2014. 
  • Led by the manufacturing industry, industrial tenants absorbed 2.3 million square feet in 2013. 
  • San Diego firms were involved in 23 venture capital deals in Q4 2013 and received more than $145 million in venture capital funding. 
 
Download the complete snapshot
 
 
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