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The Big Picture San Diego Blog


Economic Development 101

November 17, 2017

In 2016, executives from San Diego life sciences giants Illumina, Human Longevity, Inc., Thermo Fisher Scientific, ResMed and Dexcom approached EDC with a pressing need for a specific type of talent: bioinformatics professionals. Known among peers by their technical title, bioinformaticians develop and apply software tools to understand biological data sets. In San Diego, leaders in genomics and connected health are gathering incomprehensible amounts of data with the power to unlock the human genome, make personalized care a reality and enhance the way we live on a massive scale. Individuals skilled in bioinformatics, data science and computational biology are instrumental in deciphering such data sets – a task with stunning implications across pharma, biotech, healthcare, genomics and much more.

Even with impressive programs at UC San Diego and SDSU, the demand for bioinformatics professionals is simply too high for local universities to fill. As such, EDC launched the Life Sciences Trek to San Diego with the help of our economic development committee, to showcase local opportunities for Masters and PhD’s from across the country. The goal of the program: attract talent who can translate data into actionable results for application in healthcare and medicine. During the trek, the group would visit seven San Diego life sciences staples, presenting a range of career opportunities.

On November 9-10, we were joined by 27 students from across the U.S., representing UC Berkeley, UC San Francisco, University of Michigan, Stanford, Arizona State, UC Riverside, University of Northern Carolina, University of Pittsburgh and Georgia Institute of Technology. Through company tours, presentations and a networking reception, students gained access to influential researchers and executives across many of San Diego's research institutions and fast growing companies including ResMed, Illumina, the Salk Institute, Rady Children’s Institute for Genomic Medicine, Thermo Fisher Scientific, Takeda Pharmaceuticals and Human Longevity, Inc. From drug discovery to connected devices, genetic sequencing to direct patient care, the breadth of opportunities for bioinformaticians became apparent within San Diego’s diverse life sciences ecosystem.

Though a pilot program for EDC, the Life Sciences Trek to San Diego was largely a success. Providing an employer perspective, ResMed Lead Talent Acquisition Partner Amy Hernandez considered the trek a “fantastic employment branding opportunity” and a “great community event that highlighted San Diego as an attractive employment marketplace to a ripe generation of future leaders.” Additionally, the students were impressed. For one student, the trek displayed “tremendous opportunities to do biomedical research that directly impacts patient lives.” For another, the trek was a “fantastic opportunity and unique experience to get an inside look into companies and a career in Life sciences and in bioinformatics specifically,” saying “it was perfect timing in my last year of my PhD program.”

Looking ahead to 2018, EDC will continue to address the occupational demand for bioinformatics and other life sciences professionals in San Diego. EDC will play host second trek in 2018, and will emphasize the need for data science professionals as a part of the U.S. Chamber’s Talent Pipeline Management program, which takes an employer-focused approach to meeting talent needs.

EDC didn’t need to write talking points, as San Diego spoke for itself. The people we met, spaces we visited and stories we heard over the two days embodied the region’s life-changing identity. Surpassing expectation, the trek has left an undeniable impression on all who participated – students and locals alike.

See more at #SDLifeSciencesTrek.


 

September 29, 2017

Last week, members of the EDC team joined 20 board members, investors and partners on a trip to Louisville, Kentucky. The purpose was to learn about that city’s emphasis on inclusion and compassion as focal points for their branding and economic development efforts. We met passionate people—both in the private and public sectors—who are working hard to create a community that is uniquely Louisville.

Louisville Mayor Greg Fischer set the tone when he welcomed our group Wednesday evening and stayed to talk with us about Louisville’s past, its present challenges and the city’s goals around lifelong learning, health and compassion. Louisville’s challenges are significant, but they do not shy away from talking about them openly. And there is a genuine continuity to how people raise, speak about and confront these issues.

Research and workforce representatives presented hard-hitting data on the region’s existing economic disparities, as well as ambitions to add 55,000 degrees over a ten year span. The city’s economic development team and business leaders explained how the region has to work harder than most to attract and retain talent, and showcase their region as a place that is ripe for investment and growth—despite having 30,000 current job openings and being among the most affordable of large metros.

Many of the challenges that they face today stem from events that happened generations ago. But they embrace their past with the belief that they can’t chart where they are going if they ignore where they have been. Addressing a history of racial segregation, poverty and stagnant population growth are as much a part of their economic development discussion and focus as attraction, retention and expansion. The authenticity that was threaded throughout our visit culminated in an honest dialogue among our delegation.

San Diego’s Story

Back home, San Diego has experienced solid economic growth, led by its innovation industries, which have added jobs three times faster the overall economy1. However, this prosperity has not been shared by all San Diegans. A recent study found that there are more than one million people in our region with incomes too low to afford basic costs of living—the numbers are even more appalling for our black and Latino populations.

In San Diego Latinos represent one-third of the population, and are projected to be the majority by 20302. Yet only 17 percent have completed a bachelor’s degree program or higher3. Meanwhile our region has a deficit of 4,500 STEM graduates4. But talent shortages exist in every metro area—our population is our talent pool.

And while we have large employers in our region that are the vanguard of innovation, 59 percent of our workforce is employed by smaller firms that often pay below average wages5. Layer on the fact that San Diego has the second highest median home price and is the fourth most expensive metro to live in6, and you quickly see the risks to our competitiveness as a region.

We spent the past six months working with key partners to develop our story and better understand our own regional challenges. And in the coming weeks we will reassemble our delegation, as well as business and community leaders, to build an economic development agenda that benefits more people, companies and communities: an agenda that grows our own talent, bolsters small- and medium-sized firm growth, and addresses the cost of living pressures on talent attraction and retention.

There is a lot of work to be done, and it will require great collaboration and coordination. Our mission at EDC is to maximize the region’s economic prosperity and global competitiveness. To live up to that mission our economic development strategies must promote and account for growth and inclusion.

Click here for an EDC-produced research profile on the Louisville and San Diego economies.

Footnotes

1.      U.S. Bureau of Labor Statistics, 2006-2015.

2.      American Community Survey, 2016; SANDAG population projections.

3.      American Community Survey, 2016.

4.      EMSI, 2017.2.

5.      Firms with fewer than 100 people; CA EDD Business Statistics, 2015.

6.      Among 50 most populous metros; National Association of Realtors, 2017; C2ER, 2017; EMSI, 2017.3.

September 29, 2017

By now, just about everyone has heard the news about Amazon and its pursuit to develop a second headquarters operation (HQ2), somewhere in North America. The announcement came out through Tech Crunch and The Wall Street Journal last month and spread like wild fire through economic development communities and elected offices across the nation. Suffice it to say that Amazon has created one of the most competitive business attraction processes in history. Cities, counties, even states, are bending over backwards to make their areas fit the profile that Amazon is seeking: a metro or suburban region with more than 1 million people, the ability to attract and retain tech talent and other amenities like direct flights to key markets.

With the input of EDOs and partners across the county and state, San Diego Regional EDC is coordinating a regional response to Amazon’s HQ2 proposal.

On paper, the region checks all the boxes that Amazon lists in its RFP. In addition, the region has a handful of quality sites that meet the requirements of their build out: ability to deliver 500,000 ft2 by 2019 and up to 8 million ft2 in subsequent phases. San Diego also has a top-tier tech workforce (Amazon has stated they could hire up to 50,000 people) and quality of life that is unparalleled throughout most of the world. But when you look beneath the surface, San Diego also needs to realize that Amazon is commanding what will inevitably be record-setting incentive packages, an area where the State of California has scarcely been competitive, and for good reason. Incentives rarely yield impacts that exceed the costs. Further, when trying to find the location for a truly Life. Changing. company, incentives usually are nothing more than marginalia. Talent, quality of life and the prospect of being able to succeed are ultimately the more important factors. Nonetheless, the process that Amazon has put forth will command hundreds of millions, if not billions in incentives – amounts that can change minds.

Second, San Diego can’t change its geography. There has been debate throughout this process whether being in the same time zone as Seattle (Amazon's current HQ) would be a blessing or a curse. While there are “experts” on both sides of the argument, we ultimately don’t know what Amazon is looking for: West Coast ease of access to Seattle, East Coast access to financial and political centers and new talent pools, or somewhere in between. Only time will tell.

In summary, we don’t know where Amazon will ultimately end up. As an EDO, EDC is excited about the opportunity to bring our region together and present our best opportunities. It’s a good test to see just what we can do when the right opportunity comes along. In conjunction with partners from around the county and state, EDC will submit a response to Amazon’s RFP ahead of its October 19 deadline. After that, it’s anyone’s guess.

September 28, 2017

From Uber to GE to Qualcomm, companies in the tech world are racing to develop autonomous vehicles.  But you don’t have to go to Silicon Valley to find a company developing solutions for the first autonomous truck. TuSimple, a Bejing-based startup with R&D facilities in San Diego, is one reason. The company is developing technology for fully autonomous commercial trucks – a new frontier in the tech world.

In June, the company completed its first 200 mile test ride between San Diego and Yuma, Arizona, piloting its technology on a sedan. Soon, it hopes to move the technology into trucks, and with high profile investors like NVIDIA, they have a good shot.

When the startup was trying to get their product into testing phase, EDC stepped into help. Both SANDAG and the City of Chula Vista are part of an autonomous vehicle proving ground – one of ten in the country approved by Department of Transportation. EDC connected TuSimple with project leads at both entities to explore testing options right in their backyard.

Bringing a new technology to market is often met with regulatory challenges. EDC has connected TuSimple to the Department of Motor Vehicles to help navigate the regulatory framework to allow for autonomous testing of trucks in California.

The highway of the future will look very different. TuSimple is just one San Diego company driving that change.

July 14, 2017

In early 2017, the Brookings Institution’s Metropolitan Policy Program selected San Diego, along with Indianapolis and Nashville, to participate in a six-month intensive learning lab focused on inclusive economic development. During the lab, EDC worked alongside the City of San Diego, the Jacobs Center for Neighborhood Innovation, and UC San Diego extension, to develop a deeper understanding of specific barriers to economic inclusion impacting a variety of populations across the region. The outcome of the learning lab is a data-driven narrative that will inform EDC’s strategy as we work towards an economic development agenda that benefits more people, companies and communities.

San Diego is flourishing economically, with an innovation economy and a culture of collaboration that is driving growth and transformation. According to a Brookings analysis of 50 US metros, San Diego ranks 6th in upward mobility, meaning there is a greater likelihood that an individual born into San Diego’s lowest income quartile will end up in the highest income quartile. This fact, backed by the accomplishments of a range of programmatic models and initiatives by partner organizations – Accion, Connect, CDC, Junior Achievement, to name only a few – proves the success this region has demonstrated in terms of connecting communities to the drivers of our economy.

With an unemployment rate of 3.9 percent, the region is approaching full employment, meaning companies have incentives to offer pay raises and compete for talent. However, a 2016 study by San Diego-based Center for Policy Initiatives found there are one million individuals in San Diego that are living below self-sufficiency standards. This means that one third of our population cannot afford a no-frills cost of living without public or private assistance.

A nationwide battle for talent, a soaring cost of living at home, and a growing number of San Diegans unable to make ends meet are combining to form an unequivocal threat to our regional competitiveness. We cannot afford to ignore the large parts of our region that are disconnected from the engine of growth.

EDC, with a mandate to mobilize the business community around a broad economic development strategy, has committed to mainstreaming access and opportunity for all San Diegans into that overarching strategy. Over the duration of the 6 month learning lab, EDC interviewed over 25 companies, agencies, and organizations who are engaged in innovative and impactful best practices that guide families, individuals and companies on a path towards greater economic prosperity. We hosted Brookings research teams, and worked with public, private and nonprofit partners to convene dozens of roundtables and tours across the region. And we built a data-driven narrative that outlines the costs to our competitiveness of the growing number of San Diegans without access to opportunity, networks, and skills. .

For us the work is just beginning. As the learning lab comes to a close, we begin to look at the next phase: strategy. We will continue to lean on our growing network of partners and stakeholders over the coming months as we work with and through them to craft a plan that works to make our economy more inclusive, more competitive, and more resilient. Stay tuned.

June 29, 2017

The California Competes Tax Credit is an income tax credit program available to businesses expanding or relocating to California. Created in 2014 by the California legislature and overseen by Governor Jerry Brown’s Office of Business and Economic Development, the California Competes Tax Credit is divided into three separate rounds for each fiscal year. In FY 15-17, more than 270 companies were awarded more than $204 million in tax credits.
 
In all three rounds this year combined, 30 San Diego companies earned more than $20 million in income tax credits – claiming 10 percent of the total tax credits awarded in FY 16-17. In return, these San Diego companies have committed to $242 million of investments and 1,408 new jobs totaling more than $340 million in wages by 2021.
 
In the third and final round that took place this June, San Diego companies were awarded about $3 million in tax credits, making up five percent of the total $59 million awarded across the state. For each round of the program, businesses are categorized as either small or large, with credit amounts distributed to both groups. During the June round, San Diego small businesses made up 1.79 percent of the total tax credits – totaling $1.05 million – while large companies made up 3.73 percent of the total, or $1.9 million.
 
The Cal Competes program will open its first round of the FY 17-18 on July 24, in which $75 million of this year’s $250 million is up for grabs. If your business is considering relocating to, or expanding in, California, we encourage you to leverage the program as tool to reduce your tax liability. The EDC team stands by to assist with applications, as we have with many other San Diego companies.
 
Attend an upcoming workshop in Vista or Oceanside to learn how your business can apply for a tax credit, or contact Jesse Gipe for more information.
 
June 26, 2017

This op-ed was originally published by San Diego Union-Tribune, and authored by Matt Cole, Magda Marquet and Michelle Sterling.
 
This is a time of profound disruption in the global economic system: The rules of global commerce are shifting rapidly, the pace of innovation and competition is generating winners and losers, and political volatility around the world is creating an uncertain environment for businesses large and small.
 
Now, more than ever, it is time for cities to step up and lead. And to lead, they must be seen.
 
For San Diego companies, global connectivity matters. Whether it’s biotech or manufacturing, most businesses have customers outside of San Diego, which allows them to add jobs here at home. In 2015, San Diego exported more than $17 billion in goods overseas, as well as billions more in services like software, cybersecurity, engineering and research. Small- and medium-sized businesses produce 92 percent of those goods. According to the Brookings Institution, companies that are global pay higher wages, are less likely to go out of business and increase productivity of the domestic market.
 
Our competitive advantage here in San Diego is that we develop and produce life-saving and life-changing technologies better than almost anywhere else in the world.
 
Four years ago, Althea was a midsize life sciences company with great talent and a compelling business proposition. A personal relationship, and chance meeting at a trade show, began a relationship with Japanese multinational Ajinomoto that has drawn millions of dollars of investment into the region, and enabled Althea to become a global player in the development and manufacturing of biologics and innovative pharmaceuticals.
 
For Cubic Transportation Systems (CTS), a business unit of Cubic Corp., providing public transportation solutions is one example of where public-private partnerships can be applied. From Chicago to Sydney, Vancouver and London, Cubic-powered technology and services move 38 million people seamlessly on a daily basis. This form of service requires collaborative working relationships between metro governments, transportation authorities and the private sector. And more often than not, these relationships need to be built over time by political and civic leadership to be effective.
 
Most San Diegans know the name Qualcomm but are less familiar with the transformative impact that the company has had in the world through its innovation in wireless technologies that power the global economy. What started in 1985 as a startup co-founded by a UC San Diego professor has grown into a company that has invented the technologies that make smartphones indispensable in our lives. With each technology Qualcomm invents and with each employee it hires, people from Brazil to China are learning how San Diego is changing the world.
 
The 600 largest cities in the world account for 60 percent of the global economy, and that economy is increasingly crowded, confusing and contested. Metros need strong leadership, unified voices and targeted strategies to compete. This is why mayors around the world are uniting to take on big issues like climate change, trade and poverty. It is why the mayors of every major U.S. city are on the road like never before, opening doors for the expansion of their regional economies. It is why we, as the Global Competitiveness Council — the voice of the global business community here in the San Diego region — called on Mayor Kevin Faulconer to be on the road to help out.
 
The mayor responded to this call by the business community, and is traveling to Mexico City, Vancouver and London in 2017 to create civic and academic partnerships, to facilitate deals that create jobs for San Diegans, and, most importantly, to create a framework for engagement with our most important markets. Our hope is that companies of all sizes seize the opportunities the mayor is creating.
 
We know what an innovative, collaborative and life-changing place San Diego is; but now more than ever, we need our leadership telling that story here at home and around the world. Our economy depends on it.
 
Cole is president of Cubic Transportation Systems. Marquet is co-founder of Ajinomoto Althea and AltheaDX. Sterling is executive vice president of human resources at Qualcomm.
 
Mayors of every major U.S. city are on the road like never before, opening doors for the expansion of their regional economies.
March 24, 2017

"February’s data shows unemployment rates dropping for the majority of jurisdictions in the region. Meanwhile, job posting intensity has steadily declined suggesting that employers are filling jobs more rapidly. Management, training and communications are among the most in-demand skills in current job postings. And while technical skills are still expected of job-seekers, the ability to work with and develop others is key." - Phil Blair, President & CEO, Manpower

Each month the California Employment Development Department (EDD) releases unemployment data for the prior month. Due to annual revisions, EDD did not release employment data in the month of February but released two reports in March. This edition of San Diego’s Economic Pulse covers February data and references the second of two reports from March.
 
Highlights include:
  • Compared to a year ago, total nonfarm employment is up 26,700, or 1.9 percent, with 19,800 of those jobs coming from the private sector.
  • San Diego’s unemployment rate remains lower than both the California rate of 5.2 percent and the national rate of 4.9 percent.
  • Fourteen of the region’s jurisdictions saw year-over-year growth in monthly new establishments, above the regional rate of 26 percent.
 
New Businesses by Jurisdiction, Feb 2017:

 
Read San Diego’s Economic Pulse here.
February 16, 2017

Content pulled from a piece in the San Diego Business JournalVAVi Faced Its Own Obstacle Course
 
EDC investor and recreational sporting events organizer VAVi Sport & Social Club was looking to make a big splash at its first major international competition: a 20,000-person obstacle course and race in Sydney, Australia. Little did VAVi know its shipment of inflatable obstacles would present its own set of obstacles.  
 
The company loaded its $1 million worth of goods into shipping containers, set to arrive a month before the event. Complications arose in South Korea when VAVi’s equipment was unloaded and seemingly forgotten about on storage docks. This is when EDC came in… 
 
Having been a part of the 2015 global export assistance program MetroConnect, VAVi CEO Steve Stoloff called on EDC and the organization’s World Trade Center team to leverage its international network for support. EDC staff contacted the U.S. Commercial Service – the trade promotion arm of the U.S. Department of Commerce – to ensure the forgotten equipment would be loaded onto another boat bound for Australia. Staff also reached out to contacts in Sydney to coordinate on-the-ground transportation from Brisbane to Sydney, since this new boat would no longer be porting in Sydney. 
 
And it didn’t stop there. EDC’s board of directors stepped up to the challenge. Helping recover some of the money lost in the fuss, Linde Hotchkiss, managing partner at the global risk advisory and insurance solutions firm Willis Towers Watson, counseled VAVi on the qualms of international shipping and helped facilitate an insurance claim.
 
With all hands on deck, VAVi received its shipment and salvaged the prominent event – saving one-fifth of the company’s yearly projected sales. This is not simply a company story of overcoming obstacles in going global, but of the collaborative nature of San Diego’s business community. This is who San Diego is.
 
January 24, 2017

A 295,000 square foot addition to your home may not be on most people’s minds, but for a company with Illumina’s ambition, its par for the course. And today was yet another one of those days at one of San Diego’s largest life sciences companies. It also marked the culmination of a dynamic collaborative partnership to get things done.

Cutting the ribbon on the new addition to its corporate headquarters, Illumina President and CEO Francis deSouza, Executive Chairman Jay Flatley and other Illumina executives shared the stage with San Diego Mayor Faulconer to announce the opening of what is now among San Diego’s top five largest manufacturing centers. And yes, manufacturing in San Diego does include this genomics giant.  

The state of the art facility will house 850 new R&D, oncology, reproductive and genetic health and manufacturing jobs. It will continue to fuel Illumina’s majority share of the world’s genetic sequencing market, producing both the sequencing machines and analytics its customers need to support innovative global healthcare applications.

EDC is proud to have been able to contribute toward making the new building a reality. Countless phone calls, meetings and exchanges alongside our partners at Alexandria Real Estate, Biocom, Cushman & Wakefield and the city of San Diego brokered the arrangement. After four years of collaborative work, led by California Assemblymember Todd Gloria and San Diego Mayor Faulconer, the art of the possible (that new home addition) is today a shiny, ambitious new reality for San Diego.

Next up for the company and San Diego – Another 316,000 square foot addition due to open this July.