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The Big Picture San Diego Blog


Economic Drivers

October 15, 2018

On October 5, America celebrated Manufacturing Day. This national day of recognition was created in 2012 by the Fabricators and Manufacturers Association to change negative perceptions across the United States regarding the modern manufacturing industry. Through coordinated events, manufacturers connect with consumers, students, job seekers, and media to address growing concerns such as the skilled labor shortage and career opportunities for younger generations.

Here in San Diego, the manufacturing industry employs more than 113,000 people, accounting for 7.7 percent of employment in San Diego. This number is up 3.7 percent from last year, exceeding the national growth of 2.2 percent.* To celebrate this local impact, countywide events were held throughout the first week of October.

The details:

  • October 2: East County EDC hosted its third annual Manufacturing Expo at Allen Airways Flying Museum, where more than 500 people explored 59 manufacturing and resource booths. This was East County EDC’s best turnout yet.
  • October 3: Viasat, Open Source Maker Labs, Hunter Industries, Mira Costa College, and more joined forces at CSU San Marcos to welcome busloads of students and teachers to North County’s manufacturer’s showcase. This event highlighted the manufacturers in North County curating scientific and technological solutions to global challenges.
  • October 3: San Diego City College’s Center for Applied Competitive Technologies (CACT) hosted its Educational and Resource Expo. This downtown event featured a startup panel,  job fair, tours, and a manufacturing expo. CACT provides training that help San Diegans get ahead in the manufacturing industry.
  • October 4: San Diego Regional EDC hosted a Manufacturing Day Reception in Liberty Station. Ten manufacturers from around the region showcased their work including Taylor Guitars, Chuao Chocolatiers, and Planck Aerosystems. We also heard from Congressman Scott Peters (52nd District) and Congresswoman Susan Davis (53rd District), who discussed trade opportunities for San Diego’s manufacturing industry.  We are proud to host the only MFG Day event in the country that celebrates the opportunities afforded by binational manufacturing.  For the past three years, Samsung has underwritten EDC’s MFG Day festivities along with sponsorship support from CMTC. We would also like to thank our other sponsors: Solar Turbines, San Diego County Water Authority, and San Diego City College. EDC also partnered with Junior Achievement to organize tours of manufacturing facilities for high schools from Vista all the way to Santee.


 

 

 

 

 

 

 

Sponsor shout outs:

Located in Chula Vista, Samsung is a digital leader in TV & audio, computing and appliances. Samsung has maintained the number one position in the global television market for 10 consecutive years. The SAMEX plant is the largest maquiladora in Tijuana, manufacturing approximately one million televisions and monitors every month. With the success of its electronics business, Samsung now ranks as a top 10 global brand.

California Manufacturing Technology Consulting (CMTC), is a private nonprofit corporation. In 2016, The U.S. Commerce Department’s National Institute of Standards and Technology awarded CMTC a five-year agreement to be California’s Manufacturing Extension Partnership Center. This agreement makes CMTC the lead organization for delivering services to small and medium-sized manufacturers with support of partners throughout the state. CMTC helps enhance operational performance, new product development, market expansion, and technology adoption for manufacturers in both urban and rural centers.

We appreciate the support of our investors and partner organizations that help make events like Manufacturing Day possible. If you are interested in getting involved next year, please contact our Investor Relations Coordinator, Taylor Dunne, at td@sandiegobusiness.org.

Follow along with #MadeinSD all year long.

*Data sources: CA Employment Development Department, August 2018 (SD) and Bureau of Labor Statistics, September 2018 (U.S.)

September 26, 2018

San Diego Mayor Kevin L. Faulconer and World Trade Center San Diego (WTC), JPMorgan Chase & Co. and business and civic leaders unveiled the 20 companies selected to participate in the MetroConnect program, a comprehensive export assistance program to help local companies accelerate their global growth.

“Expanding San Diego’s global reach is vital to creating more local jobs for San Diegans and boosting our regional economy,” said San Diego Mayor Kevin L. Faulconer. “The MetroConnect program and their growing companies are introducing innovative products and services to new international markets and sharing San Diego's story with the rest of the world."

From visual-aid tech startup Aira, to soap manufacturer Dr. Bronner’s, to top 10 Inc. 5000 company Scientist.com, the 2018 MetroConnect companies represent a diverse cross section of San Diego’s innovation economy.

Now in its fourth program-year, the MetroConnect program equips small- and medium-sized companies (SMEs) with a suite of financial and programmatic resources in their efforts to bring their products and services global. Program resources include:

  •  $10,000 in matching grants to cover up to 50 percent of the costs associated with international expansion, made possible by JPMorgan Chase and the Department of Defense’s Office of Economic Adjustment and EDC’s 501(c)(3) Foundation
  • Dedicated WTC San Diego staff manager to support company participants in deploying overseas strategies during the grant period
  • Free export consulting with JAS Forwarding (USA), Inc. on ITAR/EAR regulations and other export activities; in-kind support by San Diego International Airpor
  • Access to workshops that address export compliance, financing and fundraising and more
  • Reduced airfare on the Japan Airlines direct flight from San Diego to Tokyo, and on Air Canada direct flights from San Diego to Canada. Assigned Lufthansa agent for direct flights from San Diego to Frankfurt, Germany
  • Access to country representatives at the Japan External Trade Organization and the United Kingdom Government Office in San Diego
  •  Free access to SYSTRAN software for website translation and customer service needs
  • Consideration to compete for an additional $35,000 during the MetroConnect Grand Prize Pitchfest in June 2019

“JPMorgan Chase is proud to continue supporting the global expansion of San Diego businesses,” said Tim West, Executive Director and head of JPMorgan Chase’s Middle Market Banking practice in San Diego. “MetroConnect will empower these 20 local companies to grow in targeted international markets, and help them navigate many of the complex nuances of global business. MetroConnect’s track record speaks for itself, and we’re looking forward to seeing the program’s continued impact on the San Diego economy.”

Since the program’s debut in 2015, 45 MetroConnect alumni have collectively generated $15 million in new export sales, signed more than 116 new contracts, added 161 new jobs to the region, set up nine new overseas facilities and seen four successful company exits. Past participants include Calbiotech (now ERBA Diagnostics), Rough Draft Brewing, Deering Banjo Company, Cypher Genomics (acquired by Human Longevity Inc.), Planck Aerosystems and many more.

“Amid increasing uncertainty over national trade policy, ensuring that local companies get the tools they need to be successful overseas is more important than ever.  We know that companies that export pay higher wages, are less likely to go out of business, and become more competitive and resilient,” said Nikia Clarke, executive director of World Trade Center San Diego. “Thanks to JPMorgan Chase, the MetroConnect program helps San Diego companies export their innovation around the world, which creates jobs and opportunities back here at home.”

Against the backdrop of rapid changes in global production, a newfound ‘trade war’ with China, and renegotiations of trade agreements, it is more important than ever to support SMEs in going global. In 2015 alone, San Diego exported more than $17 billion in goods overseas, as well as billions more in services like software, cybersecurity, engineering and research. SMEs produce 92 percent of those goods – driving home the point of programs like MetroConnect. 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.

For more information about MetroConnect, please visit MetroConnectSD.org.

The 2018 MetroConnect companies are:

1.       Aira

2.       Allett

3.       Arctic Zero, Inc.

4.       AtYourGate

5.       Bitchin' Sauce

6.       Cloudbeds

7.       Conectric Networks

8.       Dr. Bronner's

9.       Eddy Pump Corporation

10.   Epitope Diagnostics Inc.

11.   Hookit

12.   IPS Group Inc.

13.   KULR Technology Corp.

14.   LRAD Corporation

15.   MRP Training Solutions

16.   PKL Services

17.   Quality Controlled Manufacturing, Inc.

18.   Raveon Technologies Corporation

19.   Scientist.com

20.   Telaeris, Inc.


The MetroConnect program is highly competitive, with just 20 companies selected based on a variety of criteria, including interest in new markets, interest in targeted metro markets, assessed impact of funds, current international traction and more. This is up from just 15 companies in the first three years of the program. Applicants were assessed by a panel of judges, including representatives from Qualcomm Ventures, Biocom, U.S. Commercial Service, Tech San Diego, Rough Draft Brewing, San Diego State University, Tech San Diego, UC San Diego, San Diego Regional EDC and WTC San Diego.

September 19, 2018

Originally published in The Wall Street Journal.
 
Among the 50 largest metros in the U.S., San Diego ranked the highest in the nation for median household income growth. This is largely due to its abundant supply of booming tech and biotech companies, like Amazon and Sony, willing to pay big bucks for top talent. Read more in The Wall Street Journal article below.
 
If the U.S. economy is on fire, California is its white hot center.
 
Of the 50 largest metros, five of the 10 with the biggest income gains are located in California, where a diverse economy has been adding jobs across industries including construction, tourism and technology. No other state had more than one region in the top ten.
 
According to census data, the San Diego area, fueled by high-paying job growth in telecoms and biotech, gained most among the 50. Median annual household income rose 5.4% in 2017 to $76,207. The Silicon Valley area, including San Jose, Sunnyvale and Santa Clara, followed closely with a 4.6% rise in median income to $117,474.
 
With most of California’s major cities at or near full employment, there are more jobs than job seekers in some sectors and that has driven up wages, economists said. Very high incomes in some of the state’s dominant sectors, including technology, have also pulled up the median.
 
“We don’t have slack in many of our labor markets in California and so you get wage increases,” said Jerry Nickelsburg, a senior economist at the University of California-Los Angeles.
 
California’s economy, which grew 3% in 2017, has in recent years outpaced growth in the overall nation. It now ranks as the fifth-largest economy in the world, surpassing the United Kingdom last year.
 
Still, a high cost of living driven by surging housing costs has raised concerns about the sustainability of the state’s growth and whether most residents are benefiting from it. California has the highest home prices of any state and nearly 30% of renters here pay more than half of their income toward rent, according to recent data from the state’s housing department. By some measures that account for cost of living, the state has the highest poverty rate in the country.
 
“As economic development professionals, we celebrate reports like this, but we also know if you dig further into the numbers...there is more work to be done,” said Erik Caldwell, Economic Development Director for the city of San Diego. He said his city’s historic industry clusters were having a new growth spurt, driving up incomes.
 
The tech boom is even helping to boost California regions beyond the coastal meccas where such businesses are based. Median income in the so-called Inland Empire, which includes Riverside, San Bernardino and Ontario, rose 4.3%, the third-biggest gain in California and No. 6 among the 50 largest metro areas, to $61,994.
 
One of the top distribution hubs in North America, the Inland Empire has benefited tremendously from the growth in e-commerce. Amazon.com Inc. has some fulfillment centers there.
 
Christopher Thornberg, founder of Los Angeles-based research group Beacon Economics, said the Inland Empire economy was “on fire,” though he noted that residents who commute to nearby Los Angeles or elsewhere were likely pulling up the median household income.
 
Median income growth in the Los Angeles area ranked just below the Inland Empire, rising 4% last year to $69,992.
September 12, 2018

Today, Propel San Diego partners – San Diego Military Advisory Council (SDMAC) and San Diego Regional EDC – unveiled 15 companies selected to participate in the Defense Innovation Voucher program (DIVx). DIVx is a comprehensive business initiative designed to build resiliency in small, local defense companies and help them find pathways to diversify their revenue. 

San Diego is home to the largest concentration of military assets in the world and the largest federal military workforce in the country. When considering the overall ripple effects of the defense cluster in San Diego, about 22 percent of San Diego’s gross regional product (GRP) is the result of defense-related spending. But the breadth and depth of defense activity stretches far beyond military bases and naval ships; from telecomm to robotics, aerospace to cybersecurity, San Diego’s defense cluster is the driving force behind the region’s innovation economy.

According to EDC’s recently released report, Mapping San Diego’s Defense Ecosystem, 40 percent of the companies registered in San Diego County as defense contractors employ five people or less. Propel San Diego’s DIVx program serves to help those small defense companies build resiliency and sustainability through times of fluctuation in defense spending.

“Like many local industries, San Diego’s defense supply chain is mostly made up of small businesses, with 89 percent of firms employing less than 50 people. As federal funds continue to fluctuate in defense spending, small business that often rely on one to two large contracts, are at risk,” said Nikia Clarke, VP of economic development, San Diego Regional EDC. “The newly launched DIVx program is designed to help these companies diversify their revenue and become more resilient, thus increasing their ability to withstand fluctuations in DoD spending and downturns in our economy.”

This pilot program will offer complimentary consulting services and curriculum to improve the competitiveness of small defense companies, selected through a competitive needs-based selection process. The program will help companies compete for government or defense contracts and/or explore pivoting products and services to commercial markets.

The DIVx program will provide services in these three specific areas:

1. Direct Assistance: EDC has identified qualified consultants who will provide $15,000 in complimentary consulting services in one of the following categories: marketing, accounting compliance, certifications (SDVOSB, AS9100, AS5553, ISO 9001, etc.), lean supply chain and additive manufacturing tools, and strategic planning.

2. Boot Camp: Enrollment in a six-month long course designed to provide best practices to company leadership on strategies to improve company competitiveness.

3. DIVx Grand Prize Competition: This competition will award a company based off their level of engagement in these activities and progress towards their goals with an additional $25,000 to work with one of the pre-approved contractors to perform new work with the company.

Partnering in the DIVx program as the key underwriter is Booz Allen Hamilton, a leader in the defense consulting industry.

Propel San Diego is a partnership of six key organizations: East County Economic Development Council, South County Economic Development Council, San Diego Workforce Partnership, San Diego Military Advisory Council, San Diego Regional Economic Development Corporation, and the City of San Diego. Each of these organizations are also working on specific business support programs to create a more robust defense ecosystem here in San Diego.

For more information about the DIVx program please visit SDMAC.org/propelsandiego.

The 2018 DIVx companies are as follows:

  1. Accel-RF Instruments Corporation
  2. Amaratek
  3. American Lithium Energy Corporation
  4. Coast Precision Enterprises, Inc.
  5. EpiSys Science, Inc.
  6. Fuse Integration, Inc.
  7. GET Engineering Corporation
  8. intelliSolutions, inc.
  9. Marine Group Boat Works, LLC
  10. Ocean Aero
  11. Planck Aerosystems
  12. Sidus Solutions
  13. Trabus Technologies
  14. VetPowered, LLC
  15. Vortex Engineering

This project is funded in whole or in part with Community Economic Adjustment Assistance for Reductions in Defense Industry Employment funds provided by the U.S. Department of Defense - Office of Economic Adjustment to the City of San Diego.

 

September 4, 2018

Authored by Kirby Brady and Janice Brown, "Water Investments Fuel Our Growing Economy" was originally published on San Diego Business Journal.
 
While it may seem both obvious and subtle, San Diego County’s thriving $220 billion economy and quality of life is made possible by a safe and reliable water supply. Every day, water is delivered to 1.1 million households and 98,000 businesses throughout the region.
 
Water also drives the iconic industries that make San Diego County truly San Diego — craft brewing, tourism, manufacturing, life sciences and agriculture, among others.
 
But how is San Diego County fueled by water in a region that only receives 10 inches of rain each year? 
 
It’s possible because of the significant regional water reliability and infrastructure investments made by the San Diego County Water Authority and its 24 member agencies. Over the past two decades, the Water Authority has invested more than $2.4 billion into projects that drive our region’s economy and protect our access to clean water for generations to come. These direct investments have resulted in a total economic impact of $4.8 billion and support nearly 1,500 jobs annually.
 
Desalination Plant
These investments resulted in the construction of new water infrastructure projects, which ripple benefits throughout our economy. These include the Claude “Bud” Lewis Desalination Plant in Carlsbad, the nation’s largest desalination plant, and the San Vicente Dam Raise, the tallest dam raise of its type in the world.
 
The benefits of these investments are underscored in San Diego Regional Economic Development Corp.’s new study, “The Importance of Water Reliability to San Diego’s Economy,” which highlights striking positive economic impacts for our region.
 
Infrastructure Investments
Water supplies support $482 million in regional sales of goods and services every day. That’s the economic equivalent of nearly three Comic-Cons each day. Without access to a reliable water supply, local businesses would not be able to provide services or goods that help advance our regional economy.
 
Every $1 invested in water infrastructure results in a $1.80 increase in the region’s gross regional product. Investing in infrastructure is investing in the regional economy. That’s why some of our favorite products are able to call San Diego County home. This region is home to more than 130 brew houses and 3,150 manufacturing companies thanks to the safe and reliable water supply.
 
Water infrastructure investments impact local jobs. Capital improvement projects that result from investments support jobs in many industries including construction, architecture, and engineering — even restaurant and retail.
 
Growing the Innovation Economy
Water drives our renowned innovation economy. Groundbreaking discoveries are taking place right here in San Diego County, and we’re proud of the accomplishments San Diegans make every day. Aerospace, technology and life sciences are just some of the industries that depend on the infrastructure necessary to store, move, treat and deliver water. Not only are these industries changing the way the world works, but they produce products and support sales crucial to San Diego County’s economy.
 
Our region’s economic future depends on continued access to safe and reliable water. With more than 500,000 residents expected to move to the San Diego region by 2035, maintaining access to clean water is as important for the future as it is today. Though our region has limited water resources due to low rainfall, we can rest assured that the water infrastructure investments made by the San Diego County Water Authority and its member agencies will continue to support San Diego County’s thriving economy.
 
Read the full study here.
 
Janice Brown of the Brown Law Group is chair of San Diego Regional EDC. Kirby Brady is research director of San Diego Regional EDC.
August 27, 2018

Have you ever driven down the I-5 South near downtown and noticed the three large industrial buildings to your right? Do you know what happens there? That’s the U.S. Navy’s Space & Naval Warfare Systems Command (SPAWAR).

Last week, a small group of EDC board members got a behind-the-scenes tour of SPAWAR and its research lab in Point Loma SSC-Pac to answer that very question. On the tour, attendees saw firsthand some of the technology being developed and acquired by SPAWAR – technology that ranges from AI-guided cyber tools, nanosatellites, cryogenic communications, AR and VR technologies for sailors, and autonomous air, land, and water vehicles. SPAWAR directly employs nearly half of all the cybersecurity jobs (3,400) in San Diego, and its presence in San Diego is a huge contributing factor for many cyber companies to remain located in the region. It is daily responsible for the creation of advanced technologies for our country.

Additionally, attendees were provided an opportunity to learn about the U.S. Navy’s plans to explore a massive redevelopment of the SPAWAR facility that could provide the command with modern infrastructure, while acting as a catalyst for broader redevelopment in the midway area. It is rare to have a command like SPAWAR outside of the Washington D.C. beltway area and even more uncommon still for a community to have an opportunity to help such an important institution design and build a new facility.

For more information, you may access the Request for Interest via Navy Electronic Commerce Online (NECO) or Federal Business Opportunities (FBO) websites.

August 24, 2018

Every quarter San Diego Regional EDC analyzes key economic indicators that are important to understanding the regional economy and the region’s standing relative to the 25 most populous metropolitan areas in the U.S. This issue covers data from Q2 2018.  

Following seasonal declines in employment during Q1, San Diego, and the overwhelming majority of the most populous metros, experienced an increase in employment during Q2 2018. Welcoming recent graduates and ramping up for the summer season, the region added 16,500 jobs - a 1.1 percent increase in employment during the quarter. Compared to a year ago, nonfarm employment was up 22,500 jobs, or 1.5 percent.

San Diego’s unemployment rate remained below that state and national rates of 4.5 and 4.2 percent, respectively.

Key findings from the snapshot:

  • When compared to its regional neighbors, San Diego’s unemployment rate continued to fare better than both Riverside (4.7 percent) and Los Angeles (4.5 percent).
  • With the summer tourist season approaching, the leisure and hospitality sector recorded the largest quarterly gain, adding 6,300 jobs during Q2.
  • Year-over-year, the region’s median home price continued to climb, growing by 6.6 percent.
  • Compared to the same period a year ago, VC investment in the region has more than doubled. 

The Quarterly Economic Snapshot analyzes key economic indicators that are important to understanding the regional economy and the region’s standing relative to the 25 most populous metropolitan areas in the U.S. This releases includes data from April to June (Q2) 2018.

 

August 20, 2018

Last week, Inc. magazine released its annual Inc. 5000 list of fastest-growing companies. More than 120 companies in the San Diego metro made the list, including EDC investor Innovative Commercial Environments. Other EDC partners on the list include Fuse Integration, Cloudbeds (which recently inked a partnership with Airbnb), Passion Planner, and more.

Notably, San Diego-based Scientist.com made the top 10, with 15,267.8 percent revenue growth. Scientist is a B2B marketplace that connects major pharmaceutical companies and the National Institutes of Health with research scientists.

The Inc. 5000 list ranks companies by revenue growth from 2015 through 2017 for companies that are U.S.-based, privately-held, for profit, and independent with 2017 revenues greater than $2 million. The 126 San Diego companies on the list totaled more than $2.4 billion in annual revenue in 2017.

This list shows San Diego's businesses are gaining steam. While we're home to one percent of the nation's privately-held businesses, San Diego companies make up 2.5 percent of this year's Inc. 5000 list.

Click here to see the full Inc. 5000 list. 

August 17, 2018

Each month the California Employment Development Department (EDD) releases industry data for the prior month. This edition of San Diego’s Economic Pulse covers July 2018 data, including unemployment, new business establishments, and job postings.

Highlights include:

  • Data from the month of July reflect seasonal employment losses. The unemployment rate fell slightly during the month to 3.5 percent after a sharp spike in June.
  • Nonfarm employment fell by 14,400, or 1.0 percent, in July. Compared to year ago, total nonfarm employment is up 21,200, or 1.5 percent.
  • San Diego’s unemployment rate remains well below both the state rate of 4.4 percent and the national rate of 4.1 percent, both of which also saw small declines in July.
  • Nearly every jurisdiction saw declines in its unemployment rate in July. Only Solana Beach experienced no change in its unemployment rate of 1.5 percent.

Read the full Economic Pulse here.


July 20, 2018

Each month the California Employment Development Department (EDD) releases industry data for the prior month. This edition of San Diego’s Economic Pulse covers June 2018 data, including unemployment, new business establishments, and job postings.

Highlights include:

  • The region’s unemployment rose to 3.7 percent in June after several months of record lows.
  • Every jurisdiction saw an increase in the unemployment rate during the month of June. Six cities had increases of a full percentage point. 
  • Labor force grew, adding 5,200 workers during the month, up 0.3 percent. However the labor force is down 2,500 compared to a year ago.
  • Monthly employment trends changes appear to be countering trends of the past year. PST services continue to have the fastest year-over-year growth, up 4.9 percent.

Read the full Economic Pulse here.