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The Big Picture San Diego Blog


Economic Drivers

April 19, 2017

The technology cluster along the San Diego region’s 78 Corridor spans 70 different industries and 200 unique occupations. Encompassing the North County cities Carlsbad, Escondido, Oceanside, San Marcos and Vista, this well-established and diverse tech cluster is expected to grow by 5 percent over the next five years, according to a study released by Innovate78 today.

Study highlights include:

  • The 78 Corridor’s tech cluster has a $6.1 billion total economic impact annually, representing nearly 25,000 jobs.
  • North County’s technology cluster has a competitive advantage in precision manufacturing – specializing in the production of biomedical devices, telecommunications equipment and defense-related products.
  • The 78 Corridor’s tech cluster is 1.4 times more concentrated than the nation.
  • Biotech and biomed devices has been the fastest growing segment in the tech cluster, with a 9 percent increase in employment since 2011.


Read the executive summary and full study here.

March 17, 2017

Today, San Diego Mayor Faulconer announced The City of San Diego has been awarded a $1.6 million grant from the Department of Defense’s Office of Economic Adjustment to support the resiliency and growth of local defense contractors.

The City of San Diego and key partners, including San Diego Regional EDC, County of San Diego, San Diego Military Advisory Council, East County Economic Development Corporation and South County Economic Development Corporation – collectively named Propel San Diego – will deploy programs to support the region’s defense ecosystem. 

Leveraging the grant, the Propel San Diego team will concentrate on economic development strategies for companies expanding in or at risk of leaving the region. As part of this work, Propel San Diego will create a database of all defense firms in San Diego County and deploy an interactive tool to explain and model changes in defense spending activity.

Home to the largest concentration of military assets in the world, San Diego’s economy is inextricably linked to the national defense ecosystem. According to SDMAC, the total economic impact of the defense industry is nearly $45 billion.

Defense-related organizations are as diverse as San Diego’s key industries and include companies specializing in aerospace, maritime, unmanned vehicles, robotics, autonomous systems, cybersecurity, advanced manufacturing and more.

Leveraging DoD support, Propel San Diego programs aim to help San Diego retain highly-skilled talent and create increased stability for defense companies in an increasingly uncertain defense budget world. 

Propel San Diego sentiments:

  • “San Diego is proud of its military roots and our defense industry plays an integral role in our local economy,” Mayor Faulconer said“This grant will help support our local defense contractors so they can keep creating the kind of good-paying jobs San Diegans deserve.”
  • “From Qualcomm’s mobile technology to Cubic’s smart card systems and ViaSat’s broadband satellites, some of the world’s most game-changing technology is rooted in San Diego’s defense industry. Supporting the commercialization and visibility of the region’s defense-related firms, small and large, is critical to economic growth. The OEA grant and Propel San Diego collaborative enables us to do just that,” said Mark Cafferty, president and CEO of San Diego Regional EDC.
  • “The Propel San Diego initiative and OEA funding will enable a complete technology refresh of East County Economic Development Council‘s Connectory.com Network, an online resource that contains detailed capabilities profiles of industrial and technology companies across all industries,” said Joe Mackey, chair of the East County EDC board and CEO of XL Staffing and XL Security. “An upgraded Connectory that takes advantage of big data analytics will allow Propel San Diego to understand and track the wide, deep and diverse defense supply chain resident in the San Diego region, now and into the future.”
  • “SDMAC is honored and excited to be a recipient of the OEA grant. We look forward to playing a key role in facilitating the exchange of contractual information that will keep business in the San Diego region,” said Randy Bogle, executive director of San Diego Military Advisory Council.


For more information, visit OEA.gov.

March 8, 2017

In conjunction with AECOM, EDC released an economic impact assessment of FS Investors’ proposed SoccerCity development. The analysis estimates the potential economic and fiscal impacts of the large mixed-use development, which is planned to include a 30,000 seat Major League Soccer stadium, approximately 4,800 residential units, more than 2 million sq. ft. of office, 740,000 sq. ft. of retail space, and 55 acres of open space and park land. This development would be located at the current Qualcomm stadium site in San Diego’s Mission Valley.

Economic impacts of development proposal have been estimated for both the City of San Diego and the County of San Diego. This includes impacts from construction and impacts from operations at a future year at full buildout and stable occupancy. Additionally, annual fiscal impacts to the general fund have been estimated for the City of San Diego from operations of the proposed development at a future year at full buildout and stable occupancy. 

Construction Economic Impacts to the County of San Diego

Annual Operations Economic Impacts for the County of San Diego

The above information does not imply EDC’s endorsement of the SoccerCity SD proposal and should not be taken as such. 
February 28, 2017

Every quarter, San Diego Regional EDC analyzes key economic indicators that are important to understanding the region's standing relative to the 25 most populous metropolitan areas in the U.S. 
 
The Economic Snapshot covers data from October to December 2016 (Q4), the most recent quarter available, in regard to employment, real estate and venture capital. 
 
Highlights include:
  • The San Diego region had the 14th lowest unemployment rate amongst the top 25 metros. This ranking is down four spots from Q2 2016.
  • The region’s unemployment rate of 4.2 percent continues to be lower than the national and state rates of 4.5 and 5.0 percent, respectively.
  • The region’s unemployment rate decreased by 0.5 percentage points between Q3 and Q4 2016, the 9th largest decrease among major metros.
  • Year-over-year, the region has added 28,900 jobs - a 2.0 percent increase.
  • With the exception of manufacturing, all of the region’s sectors experienced year-over-year growth. Leading the way was real estate and rental leasing which increased by 6.1 percent or 1,700 jobs.
  • The largest venture capital investments were in disease diagnosis, internet software and services and biotechnology companies. The top two deals accounted for 44.1 percent of the region’s total investment for the quarter, or $79 million.

Check out the full Quarterly Economic Snapshot here.

Brought to you by:

 
February 17, 2017

Like CES for maritime… San Diego welcomed the world's leading marine science and ocean technology exhibition and conference this week. Oceanology International (OI) – launched in London in 1969 – kicked off its first North American conference at the San Diego Convention Center, bringing together more than 1,500 attendees and 150 maritime technology companies from more than 13 countries. Led by The Maritime Alliance and with the support of EDC, OI will be a biennial event in San Diego, switching to London in off-years.
 
The tradeshow connected companies and consumers from across the world, and served to help improve strategies for developing, protecting and operating in the world’s oceans.
 
Why San Diego?
With 70 miles of coastline, a concentrated military presence and innovation-driven technology companies, San Diego has emerged as a hub for maritime technology. Driving this point home, local companies large and small set up shop at Oceanology International North America – from Ocean Aero with its unmanned surface and underwater vehicles to SonTek with its underwater sensors, or Planck Aerosystems that can land an aerial drone autonomously on a moving vessel. Attendees got first-hand access to current and impending innovation in maritime and bluetech.
 
February 14, 2017
This weekend, years of hard work came to life for BAE Systems and partners across the state as the Barrio Logan-based shipyard cut the ribbon on its new dry dock, the Pride of California.
 
At 950 feet long and capable of lifting nearly 55,000 tons, the dry dock is the largest in California and the third largest in the nation. Used for ship repair and construction, the dry dock is flooded to allow watercraft to float in and then drained so watercraft can be set on a dry platform for work.
 
EDC board member and BAE Vice President Bob Koerber joined Congressman Scott Peters, Congressman Duncan Hunter, Port Chairman Robert “Dukie” Valderrama and an audience of more than 150 senior military personnel for the event inside the dry dock’s 100-foot walls. The dry dock was shipped across the Pacific Ocean on a 7,000 mile, 60-day journey. It represents approximately $100 million in infrastructure investment from BAE to increase the shipyard's capacity to meet the growing needs of the U.S. Navy.  
 
BAE currently employs 2,000 workers in San Diego, with the dry dock anticipated to add more jobs over the next several years. BAE is a critical pillar of San Diego’s working waterfront, where the shipbuilding and ship repair industry employs approximately 12,000 San Diegans and has an economic impact of $1.75 billion annually throughout the county.
 
EDC was proud to support this monumental engineering project by working directly with BAE to craft a competitive application for the Cal Competes Tax Credit program, which they ultimately won. Awarded in 2015, BAE's $1.55 million tax credit supports the shipyards ability to remain competitive and continue to invest in their yard and workforce. 
 
With the rebalance to the Pacific, the U.S. Navy’s presence in San Diego will continue to grow dramatically over the next several years. The challenges associated with this growth include the ability for local industry to service, build, upgrade and repair the equipment for the influx of U.S. Navy vessels. With President Trump calling for the Navy to increase its current fleet to 350 ships, San Diego will be on the receiving end of increased spending.
 
January 30, 2017

By Nikia Clarke, executive director of WTC San Diego and Peter Cowhey, interim executive vice chancellor for Academic Affairs at UC San Diego
 
During his first week in office President Trump made many bold moves, including an executive order to withdraw from the Trans-Pacific Partnership (TPP), a call to renegotiate NAFTA, and a threat to impose a 20 percent border tax on Mexican imports to the United States following a very public spat with Mexican President Enrique Peña Nieto. 
 
Trade matters for economies, big and small. For a border city on the edge of the Pacific, decisions on trade policy in Washington have outsized impacts on jobs, growth and opportunities for San Diegans. 
 
Take TPP — an international trade deal originally negotiated between the U.S. and 11 other countries, covering 40 percent of global GDP
 
Right now, the status quo makes it more expensive for U.S. companies to export to other countries than it is for foreign companies to sell goods and services here. TPP sought to level the playing field, especially for the small and midsize companies that make up more than 95 percent of San Diego’s business ecosystem. 
 
It also was the first trade deal to write the rule book for the economy of the future. It protected the intellectual property of American innovators, which matters when you live in the third most patent-intensive region in the world.
 
Scientific research and development, the heartbeat of our world-renowned life sciences ecosystem and an industry dependent on patents, is five times more concentrated here than in the U.S. as a whole. 
 
TPP eased restrictions on the movement of data and services across borders, which is important when you have a globally competitive cybersecurity cluster and revolutionary big data and genomics industries.
 
In San Diego, innovation is our livelihood, and TPP would have been a game changer for all those San Diego companies that export their knowledge across the globe. Killing TPP effectively cedes leadership on trade rules and norms to China, an outcome that is unlikely to be advantageous for U.S. companies and consumers.
 
And don’t forget that 97 percent of our goods exports — primarily high-value manufactured goods worth over $22 billion — are already sold in TPP markets, employing over 120,000 San Diegans. Most of those goods are exported to Mexico, sometimes crossing the border several times before they are fully assembled. This means that 40 percent of the content of imports from Mexico — the ones subject to a potential 20 percent tax — is American-made.
 
As we pivot from what could have been with TPP and look to NAFTA renegotiation, to building a wall, to a looming trade conflict with China, we should remember that trade has always been an American reality. 
 
Here in San Diego, we marvel at the transformation over the past 50 years from a sleepy Navy town to a global city that develops life-changing technologies. We didn’t get here by building walls, and we won’t get ahead that way either. 
 
 
This op-ed originally ran in the San Diego Union-Tribune: "Trump's trade moves impact San Diego economy"

For more more on TPP and San Diego, see WTCSD's economic impact report.

January 20, 2017

Understanding our economy begins with strong data – it’s a phrase people hear us say a lot at San Diego Regional EDC, and for good reason. 
 
Unemployment data, while important, only gives us a piece of the puzzle and many people are still curious as to how it all relates to them...as a business…as a job seeker…and as a San Diego resident.
 
As we kick off 2017, we want to provide comprehensive research that tells a story about our economy. San Diego's Economic Pulse, our new research product launching today, is our way of doing that. In addition to  tracking unemployment, we will also be keeping tabs on new business establishments, job postings and looking at who’s hiring in San Diego.
 
This research wouldn’t be possible without the generous support of EDC board officer Phil Blair and Manpower San Diego.
 
Throughout the year, you will continue to see changes in the way we present our research and talk about data. We would love to hear your thoughts. Join the conversation at @SDregionalEDC or send an email to research@sandiegobusiness.org.
 
January 6, 2017

Now that the holidays are behind us, let’s take a look at some of the data. Early indicators point to another strong holiday shopping season in 2016, beating already lofty forecasts for retail sales1. San Diego’s employment grew by 12,100 in November, as retailers staffed up to meet the surge of shoppers2. But a lot of that hiring is seasonal, and these seasonal boosts are trending down. In fact, growth in retail trade employment has slowed dramatically over the past two years to a mere 0.1 percent.

 

Local employment in retail trade remains 2.8 percent below the pre-recession peak; 11 percent of regional unemployment comes from the industry3. This is because shoppers are increasingly turning to online retailers rather than brick and mortar stores – a trend that has continued to grow since the advent of e-commerce giants like Amazon.com (see chart below).

Traditional retailers are struggling to compete. Last week both Macy’s and Sears announced hundreds of store closures, which will bring thousands of layoffs across the U.S. In San Diego, Macy’s apparel store in Mission Valley will be shutting its doors, leaving 140 people without jobs4.

Changes in technology have had a profound impact on the economy and the composition of jobs. And while the tech boom has brought about gains in productivity, e-commerce and automation are displacing retail workers. These are jobs that are mostly held by women, and where more than half are held by people under the age of 355.

EDC will keep a close eye as these trends develop. Look out for our next monthly employment report on January 20.
 

Sources:

1.      National Retail Federation: https://nrf.com/news/retail-sales-see-solid-gains-first-half-of-holiday-season

2.      San Diego December 2016 LMI Release: http://www.labormarketinfo.ca.gov/file/lfmonth/sand$pds.pdf

3.      EMSI; CA LMI; BLS; Infogroup

4.      Macy’s Press Release: http://www.wsj.com/articles/PR-CO-20170104-910412

5.      EMSI; CA LMI; BLS; Infogroup

December 31, 2016

Last week, we spotlighted EDC's work in 2016. This week, we're proud to showcase San Diego's 2016 successes - the 'Good News' that drives job growth, innovation and more. From increased international connectivity to an influx of innovative startups and even the MLB All-Star Game, this year was chock-full of positive headlines from Oceanside to Tijuana. As we look ahead to 2017, we're grateful for the commitment of our partners and companies that truly make San Diego an exceptional place to call home. 

  MLB All-Star Game a hit in San Diego
Hosted at Petco Park - named the best ballpark in baseball by USA Today - the MLB All-Star Game was a home run for San Diego this year. As part of bringing the Midsummer Classic to San Diego, Major League Baseball contributed more than $1.5 million to community projects in Tijuana, Escondido and Southeast San Diego. Read more.
 
  San Diego doubles intercontinental routes 
Linking San Diego to some of Europe’s most important economic and cultural hubs, San Diego County Regional Airport Authority - ranked among the best airports in the U.S. - added two new nonstop flights to its international roster: Condor’s service to Frankfurt and Edelweiss’ service to Zurich. San Diego now has nonstop service to six countries. Read more.
 
  San Diego lauded as startup hub 
San Diego is no Silicon Valley, and we think that’s a good thing. This year brought with it a wide array of up-and-coming companies expanding to the region, and the world took notice. With a startup-friendly ecosystem, collaborative public-private culture, stellar quality of life and a top-tier university system, San Diego welcomed startups WrikeBizness Apps and Experian to the neighborhood. Collectively, the companies are projected to add more than 300 jobs to the region.
 
  Qualcomm acquires semiconductor company for record $47B
Qualcomm acquired NXP Semiconductors in a massive deal valued at $47 billion, the largest semiconductor acquisition in history. More than doubling Qualcomm's employment base, the deal will create a combined company with annual revenue north of $30 billion, amplifying Qualcomm's ability to engage with smart technology and vehicles. Read more.
 
  BAE welcomes largest dry dock in CA
Expanding the shipyard’s ability to repair Navy vessels homeported in San Diego, BAE Systems welcomed its new dry dock to Barrio Logan. Once assembled, the dry dock will span 950 feet and be capable of floating a ship that displaces 55,000 tons, making it the largest dry dock in California. Read more.
 
  San Ysidro opens new cross-border entrance
Last year, the Cross Border Xpress. This year, PedWest. Despite political rhetoric around walls and barriers, the mega-region continues to build on its connectivity. As part of the $741 million reconfiguration of the San Ysidro Port of Entry, border crossers walking into San Ysidro from Tijuana welcomed the new PedWest entrance this year. The entrance is a critical piece of infrastructure for the more than 20,000 pedestrians who cross from Tijuana to San Diego each day. Read more.
 
  Thermo Fisher Scientific expands into Tijuana
Life sciences giant Thermo Fisher Scientific opened a Software Center of Excellence just an hour south of its Carlsbad location in Tijuana, instead of sourcing its software talent from Eastern Europe or Asia. The new office plans to grow to 100 employs in the near future. Read more
 
  San Diego tackles detriments of aging
As the global population ages, scientists have focused their attention on mitigating the consequences of old age. If 2016 is any indication, it turns out the source of the Fountain of Youth might be in San Diego. This year, Salk Institute scientists released research that demonstrated biological hallmarks of aging can be reversed through cellular reprogramming; President Obama's BRAIN Initiative awarded $2.27 million to neuroscientists at UC San Diego to support Alzheimer's research, among others; and Gary and Mary West opened the region's first Senior Emergency Care Unit in UC San Diego's Thorton Hospital, as well as the Senior Dental Center in downtown.
 
  BD maintains 3,000 local jobs
Following a merger with CareFusion, BD - the world’s largest medication management company - reminded us that an acquisition of a San Diego company isn't always a bad thing. Keeping more than 3,000 jobs in the region, BD is growing its local footprint. The company has a presence in more than 80 countries, yet currently has more employees in San Diego than any other city in the world. Read more.
 
  Nobel laureate named president of Salk
The Salk Institute for Biological Studies named Elizabeth Blackburn, a Nobel laureate and UC San Francisco professor of biochemistry and biophysics, as its first female president. In her role, Blackburn leads the local institute as it pushes the frontiers of discovery in fields such as cancer, neuroscience, aging and plant biology. Since 1901, just 48 women have been awarded a Nobel Prize. Read more.
 
  Stone Brewing distributes first Berlin-brewed beers
Nearly seven years in the making, North County-based craft brewery made a milestone leap into Europe’s renowned beer culture with the opening of Stone Brewing World Bistro & Gardens - Berlin. Now fully operational, the location is distributing its beers to 17 countries throughout Europe. Stone is the first U.S. craft brewery to independently build, own and operate a brewery in Europe. As if that wasn't enough for 2016, Stone launched a brewery-focused investment group True Craft and started planning construction on a new local hotel.