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The Big Picture San Diego Blog


Economic Development 101

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. 

 

January 20, 2017

From 2025 to 2050, the 65-and-older population is projected to almost double to 1.6 billion globally, whereas the total population will grow by just 34 percent over the same period. With this, it has become increasingly important to support our aging population, with health and wellness among top priority.

San Diego medical technology company and 2016 MetroConnect participant AVACEN Medical has developed technology to help ease some of the common ailments afflicting seniors. The AVACEN 100 is an FDA cleared, over-the-counter medical device that provides non-invasive, temporary arthritis and muscle pain relief, and muscle relaxation. Using microcirculation enhancement on the palms, the locally-made device helps warm and thin the blood, thereby dissipating heat throughout deep tissues and relieving joint pain associated by arthritis, muscle spasms, sprains and more.

Taking this San Diego-made technology global, the AVACEN 100 has just received the CE (Conformité Européenne) Mark approval to treat widespread pain associated with fibromyalgia. The CE Mark allows AVACEN to market its AVACEN 100 to the European Union's 28 member countries where many prescription drugs, available in the U.S., have been rejected by regulatory officials for treating fibromyalgia pain.

Founded by Tom Muehlbauer in 2009, AVACEN’s revolutionary technology was originally developed to help alleviate his sister-in-law’s chronic pain. The company currently sells in two countries, with plans to expand into 10 more over the next year (thanks in part to the CE Mark). Sales have climbed to more than $1.5 million, with more than 20 percent of the sales coming from international markets.

December 14, 2016

Often hidden behind San Diego’s pristine beaches and thriving regional economy are the  socioeconomic disparities that exist across the county’s 18 cities.

As an organization that aims to support growth of San Diego’s regional economy, EDC understands the importance of including all communities in our work. There is much debate about what the term ‘inclusive economic growth’ means, and it’s something we are working with partners to better define in 2017. In order to understand – and define it – we must know where we currently stand. 

EDC took a closer look at the 18 cities comprising the county. The large discrepancies in poverty rates, income and education across San Diego cities show that while we are part of the largest economies in the world, we have much to improve upon. 

According to the American Community Survey, San Diego’s poverty rate is 13.8 percent – slightly below the national and state rates of 14.7 and 15.3 percent, respectively. However, eight cities in the region have poverty rates above the national average. The region’s educational attainment of 36 percent is above the national and state rates of 30.1 and 31.7, respectively, but 10 regional cities fall below the national rate. Similarly, even when the region’s median household income of $66.2K is over 20 percent higher than the national median household income of $53.7K, six out of the 18 cities fall below the national median.

Highlights from the analysis:

  • National City, with a poverty rate of 24.5 percent, is almost 10 percentage points higher than the national rate of 14.7 percent.
  • El Cajon, with a median household income of $46K, has 49 percent of its total population living below 200 percent of the poverty threshold.
  • Del Mar, with the lowest regional poverty rate of four percent, has the highest median household income at $103K and the highest educational attainment at 72 percent.
  • On the other end of the spectrum, National City has the lowest median household income at $40K (less than 40 percent of Del Mar’s) and the lowest educational attainment at 12 percent (less than 20 percent of Del Mar’s). 
  • The cities of National City, Lemon Grove, Imperial Beach and Escondido have at least 25 percent of their under 18 population living below the federal poverty threshold.
 
The prosperity of San Diego is dependent on the success and growth of all of the region’s cities. EDC is committed to increasing the dialogue around inclusive economic growth and, through data and analysis, shedding light on the region’s disparities. 
 

 

December 13, 2016

Connections: a simple word that takes on different meanings, but for EDC, it describes both what we do and how we do it. In 2016, we were all about connecting... Connecting companies to global markets. Connecting business to opportunities. And connecting with the people who make our economic development work possible.

EDC's impact:

  • 8,260 jobs impacted; 126 year-to-date projects
  • $3.4M in tax credits earned by local companies
  • 14 national media hits secured; 149M people reached
  • 15 SMEs accrued $6M in additional export sales; 42 new regional jobs
  • $1.6M DoD grant awarded to San Diego and local organizations
  • 9K students impacted by career development programming
  • Seven economic research reports released
  • And 160 investors and partners who make it all possible...

See the stories behind the numbers in our interactive review at EDCin2016.com.

"As we head into the new year, we know that we have even more to accomplish in connecting San Diego's economy to the world. As always, EDC is honored to do it with and through all of you." - Mark Cafferty, president & CEO

December 8, 2016

Sometimes we find San Diego stories in unlikely places. 
 
Today, Pristine Environments, a facilities management company, announced that it will be integrating autonomous robotic cleaning technology into its clients’ facilities through a partnership with San Diego-based Brain Corp, a Qualcomm Ventures-backed company. Pristine clients include BAE Systems, Scripps, Takeda, CBRE and many more.

At EDC, we like to see San Diego companies working together. Even better is when we can make it happen. 
 
EDC played matchmaker on this deal. When EDC’s economic development manager Jesse Gipe heard Brain Corp was looking to pilot its robotic cleaning technology, he knew the right partner was in San Diego.  He introduced them to Pristine Environments, an EDC investor in the facilities management space, to see if they would be open to getting this new technology into the hands of their clients. Pristine Environments has clients all over the country, but is headquartered in San Diego. 
 
Brain Corp is a software technology company specializing in the development of autonomous artificial intelligence (A.I.) systems for self-driving vehicles (SDVs). Its newly-launched, self-driving industrial floor-cleaning machine called EMMA will be used in Pristine Environments’ client location throughout the country.  
 
Two local companies collaborating to harness the power of artificial intelligence and robotics to make our lives a bit easier... Now that’s a San Diego’ story.