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The Big Picture San Diego Blog


Manufacturing

October 11, 2017

Last week, thousands of MFG Day events were held across the country to celebrate modern manufacturing. In San Diego, more than 50 companies participated in events - from facility tours to regional resource fairs - to showcase a wide range of job opportunities. This included a private tour of Samsung’s maquiladora in Tijuana, which employs upwards of 6,000 workers, alongside Rep. Susan Davis and more than 20 EDC partners. Fun fact: San Diego’s MFG day is one of the only bi-national celebrations in the country. The week culminated at EDC’s annual breakfast event, attended by more than 200 local business and civic leaders.

The goal of MFG day is to change public perception of the sector, and introduce people to manufacturing careers. Even though San Diego has a smaller concentration of manufacturing employment than the national average, the region is home to nearly 110,000 manufacturing jobs, spread across more than 300 industries1. These are not just team assembler and machinist roles; there are hundreds of unique occupations from finance to marketing to engineering. And these are good paying jobs. In 2016, the average annual salary exceeded $79,000 in San Diego2.

Dismissiveness toward manufacturing comes from a track record of employment declines that began well before the Great Recession, in large part due to increases in automation. However, with a focus on advanced manufacturing, San Diego has fared much better. Since 2007, when the recession began, manufacturing employment declined 11.2 percent nationwide. During that same time, manufacturing in San Diego grew 3.2 percent, adding more than 3,400 jobs3.

This is because manufacturing in San Diego is driven by the innovation economy that makes aircrafts, medical equipment and semiconductors. Of course, there are also apparel makers, plastic producers and world-famous breweries. But the top eight manufacturing industries, accounting for more than 61,000 manufacturing jobs, are all in advanced industries such as aerospace and biotech4.  

Strategic development of San Diego's defense and life science clusters, as well as the strong partnership with Baja California, has helped the region’s manufacturing sector remain relevant and competitive.

1-4EMSI 2017.3.

September 6, 2017

Amid global political gridlock and NAFTA renegotiations, talks on trade are booming more loudly than ever. At the forefront of such conversation is President Trump’s persistent push for U.S.-produced “Made in America” goods. While manufacturing remains a key component of the U.S. trade policy – accounting for 56 percent of total U.S. exports – Brookings’ newly released Export Monitor 2017 suggests a necessary shift in policy strategy. And counter to Trump’s strategy, regions like San Diego – where a growing share of exports are service-related – may reap the benefits.

Nationally, only eight of 35 major industries experienced export growth between 2014 and 2016, led by educational and medical services, management and legal services, commodities, travel and tourism, and the technology sector – noting a particular uptick in international attractiveness of U.S. universities and hospitals. That said, the report indicates that if current trends continue, services will surpass goods as the largest export category in 2020 within the 100 largest metro areas.

Taking a closer look at San Diego, a highly connected innovation economy, the report shows:

  • San Diego ranks as the 15th largest metropolitan region in the U.S. in terms of its GDP and the value of its real exports ($22.9 billion).
  • When comparing export intensity among the top 100 metropolitan regions, San Diego ranks 37th (9.9 percent) – this is up from 50th (10.03 percent) in 2014. 
  • A total of 134,350 jobs were supported by exports; 66,940 of which are direct jobs.

Manufacturing is an important part of San Diego’s economy and that will not change. However, With manufacturing exports on the decline and services exports on the rise, Brookings’ Export Monitor suggests challenges for President Trump’s “Made in America” agenda. The administration’s trade strategy cannot merely be a manufacturing strategy; it must also include promoting and expanding access for services exports. This means addressing barriers like physical presence requirements, local data storage mandates, temporary staff relocation restrictions, cross-border data flow constraints; it means continuing to confront discriminatory practices and offshoring, and technological advancement and workforce development that sustain regional competitiveness.

As an innovation economy, home to a world-renowned life sciences and defense ecosystem, services exports (think: IP) are among top priority in San Diego. And as the third most patent-intensive region in the world, connectivity to foreign markets – especially as it relates to sharing San Diego-made, life-changing technologies and discoveries with the rest of the world – and a balanced trade policy is make or break.

See more in Brookings’ full report, San Diego export scan and press release.

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. 

 

August 19, 2016

With just under two months to San Diego Manufacturing Day, we’re kicking off a five-part blog series on San Diego-made products you didn’t know were made right in our backyard. Here are five of some of your favorite products #MadeinSD:

  1. WD-40 – If you’ve fixed a squeaky door, greased a bike chain or worked on cars, chances are you’ve used WD-40. Founded as a chemical company in 1953, WD-40 Company remains a staple in San Diego manufacturing. Gary Ridge, president and CEO of WD-40 explains, “San Diego is a good city to be in if you’re in international business, as I can be on a call with London in the morning and with Shanghai in the afternoonWe like to say ‘the sun never sets on WD-40.”
  2. TaylorMade golf clubs – PGA Tour pros like Dustin Johnson, Jason Day and Sergio Garcia can be seen swinging TaylorMade clubs in tournaments watched by millions almost weekly. Best known for innovating metal drivers starting in 1979, TaylorMade remains the largest golf equipment and apparel company in the world. Fore!
  3. Taylor Guitars – Used by world-famous musicians including Jason Mraz  and Taylor Swift, Taylor Guitars – located in San Diego’s East County – is the world’s leading guitar manufacturer. With operations on both sides of the border, Taylor maintains a high-level of quality control over its products.
  4. Stone Brewing craft beer– The recognizable gargoyle and award-winning beer from Stone has made waves for taking on “corporate beer”. Started in North County in 1996, Stone now boasts seven locations including a newly opened brewery in Berlin. Cheers! 
  5. Illumina's instruments for genetic sequencing – Recently named the “Google of Genetic Testing”, Illumina has taken over San Diego’s UTC business center which houses the company’s worldwide headquarters and more than 2,000 employees. More than 90 percent of the world’s genetic sequencing is done on Illumina instruments.

Stay tuned for our next list: five #MadeinSD products used by the world’s top athletes

Celebrate with us October 7. Visit sdmfgday.com to get involved. 

November 5, 2014

AMP SoCal

San Diego’s aerospace and defense industries play a critical role in our regional economy.  To further support these key industries, San Diego Regional EDC joined in partnership with 86 dedicated organizations to form the AMP SoCal Coalition to compete for the new federal designation known as the Investment in Manufacturing Community Partnership (IMCP). The AMP SoCal coalition, which stretches from San Diego through Ventura County, was one of only 12 regions across the United States that received this new special grant status from the U.S. Economic Development Administration.

The IMCP designation allows 11 federal agencies with $1.3 billion in economic development funds to use the designees’ plans to make targeted investments in demonstrably strong public-private partnerships to strengthen regional manufacturing. Essentially, this opens up AMP SoCal and the 11 other IMCP designees to vie for a piece of this $1.3 billion funding.

To ensure the AMP SoCal Coalition puts its best foot forward, San Diego Regional EDC, along with East County EDC President Jo Marie Diamond and other members of AMP SoCal Coalition, participated in a two day conference in Washington D.C. last week. This conference was designed to provide best practices insights for regions that won IMCP designations, while giving attendees direct access to the federal agencies participating in the program including the Department of Defense, Environmental Protection Agency, Small Business Administration, and Department of Transportation.

In December, San Diego will be hosting AMP SoCal’s Executive Board meeting to review the IMCP conference and continue to identify regional opportunities to leverage the IMCP status to compete for locally impactful grants.

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October 14, 2014

D&K Engineering

On October 3rd, more than 28 San Diego companies opened their doors to the public as part of National Manufacturing (MFG) Day. As one of the founding members of the local event, the team at D&K Engineering was behind the day’s success. More than 100 people lined up to tour its Rancho Bernardo headquarters where many of the world’s most innovative products are made.

With a wide-range of expertise - including kiosks, medical devices, 3D printers and more – D&K Engineering is redefining the way we think of product manufacturing. Its products and expertise illustrate the way manufacturing has evolved to become a high-tech process that creates applications that change the world. This product intuition has helped them yield results: the innovator saw its manufacturing business grow by 90 percent from November 2012 to November 2013.  This is the type of growth that lands a company on the Inc. 5000 list five times.

For this week’s Investor Spotlight, we sat down with D&K Engineering’s CEO Scott Dennis to learn about why the innovator chooses to grow in San Diego.

1) Tell us about D&K Engineering

D&K Engineering provides end-to-end R&D, product development and manufacturing services for high-innovation content, hardware-based products.  We help enterprises become leaders in their industries by creating and manufacturing breakthrough hardware-based products that lead to profitable, enduring lines of business for our clients.  We achieve this by employing world-class R&D and manufacturing talent, deploying state-of-the-art product realization processes and leveraging our global infrastructure and supply chain to design and manufacture innovative products on a service basis. San Diego based ecoATM is a great example of one of D&K Engineering’s many end-to-end client relationships (R&D through manufacturing).  As the engineering and manufacturing engine behind ecoATM, we helped them quickly achieve market leadership by designing and delivering a fully-automated kiosk that was deployed to the market and generating revenue within a 12-month period.  Today, ecoATM is the leader in the electronics eCycling kiosk industry.

2) What are some advantages to doing business in San Diego?

Why D&K Engineering Chose San Diego

Although D&K Engineering provides services to companies around the world, San Diego is an ideal location to call home.  Some key advantages of doing business in San Diego are the broad base of industries located in the region, the deep pool of R&D and manufacturing talent available, geographic proximity to Mexico and easy access to Asian markets and supply chain. San Diego’s industry base includes many market-leading and emerging companies in a wide variety of industries such as medical, life science, wireless, 2D and 3D printing, kiosks, and defense.  Most organizations in these industries partner heavily with service-based companies to assist them with developing new, innovative products and manufacturing them on an ongoing basis.    

The education level and specialized skills of the talent pool in San Diego is a competitive advantage for our business. Not only does the region provide a talented pool of experienced workers, but its world-class university system, including UC San Diego, San Diego State University, the University of San Diego and others, continually provides a great pool of new engineering and business talent.

3) San Diego is full of dynamic companies, firms and service providers influencing global trends and innovation. Pick another San Diego company that is at the top of its game.

There are many San Diego based companies that are innovators and global leaders in their perspective industries. A few of these companies include:  iboss, a web security company developing innovative security solutions and a prominent member of San Diego’s growing cybersecurity industry; Hologic GenProbe, a medical device company developing diagnostic products to help improve patients’ lives; Illumina, a medical device manufacturer developing advanced DNA sequencing solutions and products used in the advancement of personalized medicine. 

4) What do you anticipate for your company in five years?

D&K expects continued regional and global growth in both our engineering and manufacturing services business over the next five years. With the goal of achieving a global leadership position in the product realization services industry, D&K offers San Diego the advantage of having a global industry leader in their own back yard that can help expand the burgeoning pool of technology based companies who call San Diego home. 

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May 29, 2014

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

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

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

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

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

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

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

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October 4, 2013

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Every San Diego company has a unique story to tell. That became very apparent as the region came together to celebrate MFG Day at San Diego City College on Friday. Four panelists representing a diversity of San Diego companies talked about the challenges and opportunities facing the region’s manufacturing sector, which employs more than 90,000 individuals.

Take D&K Engineering, a high-tech manufacturer.  When the entrepreneurs who created EcoATM were looking to make their idea a reality, they went to the Rancho Bernardo firm to create an e-recycling kiosk. As a result, D&K Engineering had to scale up its production and hire more employees. And they chose to do it in San Diego. “Access to talent and the border opportunities are one of the main reasons I chose to start D&K in San Diego. Besides, who wouldn’t want to live here?” said Alex Kunczynski, one of the company’s founders.

The border also adds a significant competitive advantage for local manufacturers. As Interim Mayor Todd Gloria said in his opening remarks, “this is a big deal.” San Diego and Tijuana are currently working together like never before. When asked about why Taylor Guitars chose to open up a manufacturing facility across the border in Tecate, VP of Manufacturing Chris Wellons said “We have a saying at Taylor Guitars. We say ‘We’ll we be happy we did this in 10 years.’” And happy they are. Manufacturing in Mexico, as opposed to China or somewhere else overseas, has given Taylor more control over its finished product. It’s also become more cost competitive.

Wellons alluded to the entrepreneurial spirit of another panelist. Stephan Aarstol started Tower Paddle Boards - a sports and active lifestyle company - in 2010. With a little help from ABC’s “Shark Tank,”he transformed his sales from $3,000 in 2010 to $3 million in 2013.  Although he only has four employees in San Diego, he plans on growing in the coming years, and he’s looking to do it in the region. To him, he’s not just selling a paddleboard but also exporting California culture to consumers all over the globe.

As Chris Wellons of Taylor Guitars echoed, keeping manufacturing jobs close to home really comes down to innovating the process. Taylor Guitars has more than 700 employees, with many of them working out of its El Cajon headquarters. Although customers can still rely on the same quality that made Taylor a household name when it was founded in 1974, the manufacturing process has evolved. Taylor used to carve each of its guitar necks out of an individual piece of mahogany, meaning 60 – 70 percent of the materials were wasted. In 1999, Taylor decided that process needed to change. The result was one of the greatest guitar innovations in the past 100 years.  Instead of using a one-piece neck, Taylor switched to a three-piece neck, which resulted in a 66 percent yield in materials and created a more sustainable product. This, Wellons said, was possible because of the ability to execute a vision, which he thinks is a strength of San Diego.

So what can San Diego do to continue incubating manufacturing?

The answer may be easier said than done. San Diego is fortunate enough to have a highly-educated workforce. The metro currently ranks fourth in the U.S. for Ph.D. attainment rates.  Although Ph.D.-trained workers are essential for many San Diego sectors, as the panelists noted, it’s not necessarily these types of jobs they have trouble filling, but the machinist jobs where workers require hands-on manufacturing skills.

Wellons learned these skills in his high school shop class, and so did many other highly-skilled manufacturers. Admittedly, we focus a lot of time on retaining and incubating high-tech talent, but as Interim Mayor Gloria pointed out “These jobs are important too. They provide a comfortable middle-class life.” San Diego City College provided the perfect backdrop to get this conversation going. As San Diego Community College District Trustee Peter Zschiesche noted, 98 percent of San Diego City College grads remain in San Diego. 

With the guidance of San Diego Community College District and organizations like San Diego Workforce Partnership, San Diego – and it’s nearly 2,800 manufacturers – are looking to put these grads to work.

Of course, this all starts with the conversation we had this morning. A conversation that I’d bet we’ll be happy we had in 10 years.

Please check out MFGday.com for a list of local companies that held tours today,

Media Coverage: 

KPBS, Taylor Guitars still strumming along as example of San Diego manufacturing success

U-T, S.D. county product makers open doors to public

 

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