Tag: aerospace

Study: AI helps catalyze 10% employment growth in San Diego Transportation cluster through the pandemic

By EDC Research Bureau,

San Diego Regional EDC study quantifies the impact of AI in region’s Transportation cluster

Today, alongside Booz Allen Hamilton, San Diego Regional EDC released the third study in a series on the proliferation of Artificial Intelligence (AI) and Machine Learning (ML) within San Diego County’s key economic clusters. “Mobilizing the Future: AI and San Diego’s Transportation Cluster” quantifies the economic impact of the region’s Transportation cluster and explores how AI and ML technologies have helped position San Diego as a global trade hub.

While people begin to get more comfortable with the notion of autonomous-driving cars, San Diego is deploying AI and ML in Transportation even beyond consumer use. One in three Transportation and related Manufacturing companies in San Diego are either developing or adopting AI and ML technologies, thus achieving levels of precision and accuracy otherwise unattainable by humans. This is measurably higher than the average engagement rate of 25 percent across all industries.

Local startups like Airspace and Boxton are enabling the shipment of goods in the quickest, most cost effective way; large firms Lytx® and TuSimple are improving safety in transportation; established brands Cubic and SANDAG are streamlining travel and commutes for individuals; and defense contractors BAE Systems and General Dynamics NASSCO are mobilizing troops and supplies to drive mission success and safety.

Underwritten by Booz Allen Hamilton, the web-based study—transportation.sandiegoAI.org—includes video case studies on local Transportation companies, details on the $11 billion economic impact of the Transportation cluster including interactive data visuals, and demonstrates overall how the region’s rapid adoption of AI in Transportation has helped propel San Diego into the global magnet it is today.

“San Diego is home to some of the most innovative and influential Transportation technology companies in the world. The rapid development and adoption of AI in Transportation has uniquely positioned the region as a leader in solving global challenges such as climate change and supply chain disruptions brought about by the pandemic,” said Eduardo Velasquez, Research Director at San Diego Regional EDC.

KEY FINDINGS

  • San Diego’s Transportation cluster is big and growing. The cluster supports more than 90,000 local jobs and contributes $11 billion to the regional economy each year. Despite the pandemic, employment in the cluster has increased 10 percent during the last five years.
  • AI and ML in transportation is much more than just autonomous vehicles. Local developers are creating AI- and ML-based solutions to optimize shipping routes, automate and secure mass-transit fare collection systems, improve safety on roadways, and achieve extreme precision in the manufacturing of ships and aircraft.
  • The Transportation cluster drives global connectivity and competitiveness. These innovations bring enormous economic benefit to the region, including advanced manufacturing jobs, while propelling San Diego’s role in the global marketplace.

“It is important to remember that transportation in San Diego includes not only our personal vehicles, but also a globally connected market supported by an international border crossing, a shipping port, and an international airport,” said Joe Rohner, Director of Artificial Intelligence at Booz Allen Hamilton and leader of the firm’s West Coast AI business. “The study series continues to illustrate how the implementation of AI and ML technologies across diverse industries is perpetuating San Diego’s leadership in tackling global challenges. Booz Allen is ready to engage with our region’s leaders and industry partners to support this work.” Booz Allen employs approximately 1,400 professionals in San Diego, working on cybersecurity, analytics, engineering, and IT modernization.

Transportation is a key and rapidly growing piece of the San Diego regional economy. While employment in all other sectors contracted 2.3 percent since 2016, Transportation employment saw 10 percent growth even amid the coronavirus pandemic. This includes Transportation Manufacturing, Logistics and Freight, Passenger Transportation including Mass Transit, and Other Transportation Services. Importantly, each Transportation job creates another job in other local industries; this means 4,000 more jobs have been created elsewhere in the economy due to Transportation’s 10 percent growth over the last five years.

“At Lytx, we combine video telematics with machine vision (MV), AI, and driving data to help solve the transportation industry’s most critical problems, like distracted driving. We pioneered the use of MV + AI in fleet management solutions, and we firmly believe in this powerful technology’s ability to empower drivers, protect fleets, and create safer roadways—in San Diego and around the world,” said Rajesh Rudraradhya, Chief Technology Officer at Lytx. “The latest report in the series by EDC reinforces the importance of implementing advanced technologies such as AI and the increasing need for companies like ours to continue to innovate and improve outcomes in this space; doing so fuels regional growth while also increasing driver safety.”

With this growth, and a unique convergence of public and private entities, among other factors, San Diego’s Transportation cluster is leading in the global fight against climate change and supply chain disruption.

The study series is underwritten by Booz Allen Hamilton and produced by San Diego Regional EDC. This report was sponsored by Northrop Grumman and Lytx.

Read the full study at transportation.sandiegoAI.org

Read the full AI series

San Diego’s Changing Business Landscape: Bottlenecks are squeezing bottom lines

By Eduardo Velasquez, Research Director,

Welcome to the fifth edition in EDC’s Changing Business Landscape Series, which will be published bi-monthly in the San Diego Business Journal and here on our blog. If you missed them, check out all past editions here.

Surveying the changing business landscape in San Diego

The COVID-19 pandemic has impacted every facet of life, including how businesses operate. Companies in every industry are rapidly re-evaluating how they do business, changing the way they interact with customers, manage supply chains and where their employees are physically located. This has massive immediate and long-term implications for San Diego’s workforce and job composition, as well as regional land use decisions and infrastructure investment.

To identify evolving trends in local business needs and operations, ensuring their ability to grow and thrive in the region, San Diego Regional EDC is surveying nearly 200 companies in the region’s key industries on a rolling basis throughout 2021 to monitor and report shifts in their priorities and strategies. In addition, EDC constructed the San Diego Business Recovery Index (BRI)—a sentiment index to measure companies’ perceptions of current conditions, as well as expectations for the future across several factors such as business development, employment, and commercial real estate needs. (An index value >50 reflects expansion, and a value <50 reflects contraction. More information on the index and how it is calculated is available here.)

These insights will help inform long-term economic development priorities around talent recruitment and retention, quality job creation, and infrastructure development. Companies are surveyed on several topics, with varying emphases in each wave.

Here are three key findings from the wave of surveying conducted in October 2021:

  1. For software companies, the struggle is now real. They have been among the most optimistic industries surveyed, but now face similar challenges to other industries.
  1. The market for skilled talent has never been hotter. A great convergence of talent needs is turning hiring difficulties into slower job growth.
  1. Supply chain disruptions appear to be pinching profit margins. Input prices have risen for many companies, but most are reluctant to pass along higher costs to their customers and opting to sacrifice earnings for now.

The BRI took a step back in October to settle at 54.1, marking the second consecutive decline since June. The topline index value edged 1.2 points lower from August’s 55.3 but is 9.6 points off its June high of 63.7. The deterioration stems from weaker perceptions of present conditions, but slightly more hopeful views of the future helped keep the overall BRI in expansion territory.

Companies reported a slowing of both revenues and earnings. This comes after a period of record earnings in some industries but could also be the result of prolonged supply chain disruptions that have choked off necessary inputs and simultaneously prevented sales. Yet, businesses surveyed also expressed continued difficulty hiring and retaining workers, driving a significant slowdown in job growth.

For tech companies, the struggle is now real

Firms in industries with limited remote work capabilities, such as Healthcare and Aerospace, continued to express relatively pessimistic views. Joining this list are Information and Communications Technology (ICT) and Software companies, which up to now have been among the most optimistic industries surveyed.

Software companies signaled revenues have begun to fall, along with an even steeper decline in earnings. Supply chain disruptions play a role here, as San Diego is top 10 exporter of services. Limited availability of or access to key inputs, as well as travel restrictions, have hindered San Diego Technology companies from growing their businesses. Making matters worse, these businesses also expressed far greater difficulty finding people to hire compared to the summer months, which is driving a significant slowdown in job growth. Taken together, these headwinds led respondents to sour on the economy—both presently as well as future expectations for the next six months to a year.

ICT firms have also lost some faith in their current and future economic prospects. Companies in this vertical are facing even greater supply chain difficulties than Software firms. Business development and hiring pose far greater challenges than they did in the summer. Worse still, worker retention has become nearly impossible as a record number and a record rate of people quit their jobs in September.

The market for skilled talent has never been hotter

Talent recruitment and retention challenges have undermined employers since before the pandemic began. What is new is employers reported a sharp slowdown in job growth as workers drive a hard bargain. Not only are workers seeking higher wages and more flexible work arrangements, but employers find themselves competing across industry for an increasingly limited pool of skilled talent.

The top posted occupation in San Diego during the last year, outside of registered nurses, was for software developers and software quality assurance testers. There were more than 23,000 unique job postings for those occupations going back to October 2020. The top posting companies for these jobs are tech giants, such as Qualcomm and Apple, as well as startups receiving record venture funding. However, manufacturers comprised a formidable second with 4,514 unique positions during that time.

Manufacturing in San Diego has long been advanced—producing everything from jet engines to medical devices—so elevated demand for software developers working on unmanned aerial systems or DNA sequencing may not be all that surprising. Nevertheless, digging a bit deeper, we find the second most listed skill among Manufacturing job postings was for Teradata SQL, an open-source database management system. In fact, during the past 12 months, Manufacturing job postings that included Teradata SQL quadrupled and represent nearly 71 percent of all postings seeking that skillset. The median advertised annual salary for jobs requiring this skillset is $126,000, which is up 40 percent from a year earlier, and about $5,000 more than in either San Francisco or San Jose, and about $30,000 more than in Seattle.

The demand for skilled talent is rising rapidly and spreading across industries. Unfortunately, the supply of that talent has not kept pace. In fact, census data show an overall decline in the number of total degree holders in the region since 2017. A rising cost of living against a backdrop of increasing competition from “tech markets” across the globe poses a real challenge for local companies. With still more than 86,000 people unemployed, it has never been more important that the region invest in upskilling and building a pipeline of local talent to fuel San Diego’s recovery and future growth.

Supply chain disruptions appear to be squeezing profit margins

Supply chain disruptions and inflation continue to dominate headlines. While these challenges appear to be temporary, they are impacting consumers and the business decisions of local companies. Companies surveyed indicated supply chains are just as challenging now as they were in June. Furthermore, these challenges are directly tied to increases in input prices. This is leaking downstream into business development and sales, which employers, on balance, now rate as only slightly expansionary.

As such, some companies are considering passing along higher input costs as margins get squeezed from both sides. This decision largely depends on the magnitude of price increases that companies are facing themselves. Most companies are willing to absorb the bulk of increased costs when those increases are relatively small; tolerance for deeper margin cuts were much smaller. Only one in four companies indicated wanting to pass along at least half of those increased costs, where input prices have risen less than five percent. However, companies are nearly twice as likely (44 percent) to do so where input prices rose more than five percent—principally those in Manufacturing.

Passing along increased costs is a short-term strategy to a complex problem. As such, some companies are reevaluating their supply chains, not just in terms of suppliers but also the networks they rely upon to receive inputs or distribute products. Of the companies surveyed, only 14 percent indicated currently using the Port of San Diego. However, nearly double (27 percent) expressed a willingness to do so in the future.

The survey results continue to reflect an uneven recovery across industries. The reported trends in employment line up squarely with recent jobs reports for the region. In total, San Diego establishments added an underwhelming 3,600 jobs to the economy in September. The sharp slowdown in job growth helps explain the upward shift in remote work adoption as well as future expectations for remote work accommodations. There are many surveys of workers, both locally and nationally, indicating that desires for flexibility and remote work are strong and sticky. Despite these challenges, employers surveyed remain optimistic about the next six to 12 months albeit somewhat more modest plans for expansion.

Stay tuned for more on San Diego’s changing business landscape. EDC will be back every other month with more trends and insights. For more data and analysis, visit our research page.

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San Diego’s Changing Business Landscape: Turning the pandemic corner

By Eduardo Velasquez, Research Director,

Welcome to the second edition in EDC’s Changing Business Landscape Series, which will be published bi-monthly in the San Diego Business Journal and here on our blog. If you missed the first edition, read it here.

Surveying the changing business landscape in San Diego

The COVID-19 pandemic has impacted every facet of life, including how businesses operate. Companies in every industry are rapidly re-evaluating how they do business, changing the way they interact with customers, manage supply chains and where their employees are physically located. This has massive immediate and long-term implications for San Diego’s workforce and job composition, as well as regional land use decisions and infrastructure investment.

To identify evolving trends in local business needs and operations, ensuring their ability to grow and thrive in the region, EDC is surveying more than 200 companies in the region’s key industries on a rolling basis throughout 2021 to monitor and report shifts in their priorities and strategies. In addition, EDC constructed the San Diego Business Recovery Index (BRI)—a sentiment index to measure companies’ perceptions of current conditions, as well as expectations for the future across several factors such as business development, employment and commercial real estate needs. Review the BRI concept and methodology here.

These insights will help inform long-term economic development priorities around talent recruitment and retention, quality job creation and infrastructure development. Companies are surveyed on several topics, with varying emphases in each wave.

Here are three key findings from the second wave of surveying conducted in April 2021:

  1. The worst of the pandemic is behind us. Companies are very bullish about the next six to 12 months and, as a result, plan to accelerate hiring.
  1. San Diego’s innovation cluster is (mostly) booming. Life Sciences companies lead the way while Cyber and Aerospace firms are still working through pandemic-related challenges.
  1. Companies are seriously reevaluating their space needs. Smaller firms are looking to expand their footprint, while traditional Tech companies may be scaling down.

The worst is behind us

San Diego companies indicated that they think the worst of the pandemic has passed. With a BRI of 58.9 in April, regional firms noted that they plan to hire or rehire workers at a slightly faster pace than they have up to this point, while also expanding remote work capabilities going forward.

Last month’s index reading reflects bullish assessments of, both, present conditions (the present conditions subindex registered a value of 56.1) and expectations for the future (subindex of 65.4). Companies noted some lingering effects from a full year in lockdown, including difficulties with business development and job losses, and neutral to slightly negative feelings on remote work over the past year. Nonetheless, firms reported bright views on the current state of the regional economy and noted that San Diego businesses and key industries have adapted to the pandemic better that those in peer regions.

Regional companies were even more upbeat when it came to expectations for the future. All of the index’s expectations subindex values were north of 50, and companies overwhelmingly believe that the regional economy will have improved significantly in the next six months (subindex of 72.7) and even more so within the next 12 months (subindex of 86.2). This is important because many companies make decisions today based on their assessments of business conditions in the near future.

Most companies shared in the optimism, but to varying degrees. Small companies with fewer than 50 employees that were hardest hit during the pandemic held slightly dimmer, though still generally positive, views than their larger counterparts. In particular, smaller firms cited ongoing difficulties accessing new customers, managing suppliers and vendors, and hiring and retaining workers. Even so, assessments of current earnings trends were only slightly negative, and small firms held a sunny disposition when it comes to the current state of the San Diego economy and business climate.

Interestingly, however, companies with fewer than 50 workers had the highest level of optimism for the future across business size cohorts, which could signal an inflection point for the pace of hiring in the coming months. This bodes especially well for the jobs recovery heading into the second half of 2021, as 96 percent of San Diego’s businesses have fewer than 50 employees and small businesses have historically accounted for roughly half of all job growth.

San Diego’s innovation cluster is (mostly) booming

San Diego’s innovation cluster overwhelming expressed optimism entering 2021, as companies shifted toward meeting the demand for life-saving technologies, treatments and personal protective equipment leading to record venture capital investment and renewed job growth. However, a closer look reveals mixed results within the cluster. Industries like Cleantech, Software and Biomedical Device producers all held especially confident views (BRIs in the mid-60s), while Telecommunications, Cybersecurity and Aerospace each signaled ongoing challenges from the pandemic (BRIs ranging from 43 to 50).

Biotech and Biomedical Device manufactures hold strong expectations for the regional economy, with plans to increase their headcount and real estate footprint during the next year. In addition, they expect to increase their use of remote work over the same time frame. While this may seem contradictory, it reflects the modifications and enhancements that many companies are making to protect workers on the production floor, as well as those necessary to attract workers back into the office. Workers want to feel safe once back on company property and they also want to maintain the flexibility that working remotely has provided. To accommodate these needs, employers are preparing for a flexible or hybrid workplace once reopen. In addition, many companies are reconfiguring and even seeking new space to keep workers spread out, adapting space to be more comfortable in a post-pandemic environment. This includes ‘hoteling’ and ‘neighborhooding’ models to help reduce the flow of people and simultaneously allow teams to collaborate in person. Companies are preparing for a gradual return to the office to give workers adequate time to warm up to pre-pandemic routines. More on that below.

While Telecommunications and Cybersecurity firms all share this optimistic regional economic outlook with their Life Sciences peers, these industries are much more subdued about their own expansion plans for the next year. On net, they see their needs for space as unchanged, with some modest reductions in hiring compared to typical years. This reflects the challenges these industries have faced during the pandemic, namely with respect to increased difficulty with sales, hiring and, somewhat surprisingly, inefficiencies from remote work. Aerospace has not yet recovered from the initial impacts of the pandemic, still reeling from significant hits to both sales and employment, as well as disruptions in their supply chains from lockdowns and restricted international travel and transportation.

Smaller firms are looking to add space

After more than a year of implementing remote work and reduced onsite staffing, companies are beginning to plan for a return to the office. However, how much space awaits those returning to the office will vary by industry as well as firm size.

It is small- and medium-sized firms that are looking to expand their commercial real estate footprint over the next year rather than larger firms. In fact, the proportion of firms surveyed that expect to increase space by 10 percent or more of their current square footage is nearly double that of those planning to reduce their current space by 10 percent or more (16 percent to 8.4 percent, respectively). However, when you factor in the size of each company, those planning significant real estate growth represent only three percent of the jobs compared to 13 percent of jobs for those looking to reduce space significantly (companies surveyed collectively employ nearly 200,000 workers).

When we look at the innovation companies, we see some stark differences between traditional Technology and Biotechnology industries. Eight percent of respondents representing 22 percent of jobs plan to reduce their space by more than 10 percent—mostly in the Telecommunications industry. However, nearly 26 percent of respondents representing 41 percent jobs expect to add modest amounts of space less than 10 percent of their current footprint. Here many respondents are in the Biomedical Device and Biotech industries and likely in need of additional production or lab space.

Understanding these evolving and distinct trends is important because San Diego’s innovation cluster is leading the region out of this pandemic-driven economic downturn, just as it has in each past downturn. Each job added in the innovation cluster supports another two jobs elsewhere in the economy. Yet, these innovation companies do not necessarily need to be physically located in San Diego in order to operate. Making sure these companies have the infrastructure and access to talent that they need to flourish is critical to our region’s prosperity.

Stay tuned for more on San Diego’s changing business landscape. EDC will be back every other month with more trends and insights. For more data and analysis visit: sandiegobusiness.org/research.

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San Diego’s Changing Business Landscape: The next normal is here

By Eduardo Velasquez, Research Director,

San Diego Regional EDC is excited to kick-off our Changing Business Landscape Series, which will be published bi-monthly in the San Diego Business Journal and on our blog.

Surveying the changing business landscape in San Diego

The COVID-19 pandemic has impacted every facet of life, including how businesses operate. The San Diego region began the year with near-record high unemployment and widespread small business closures. Meanwhile, large companies across the globe have extended remote work well into 2021 and are even abandoning their corporate campuses. Companies in every industry are rapidly re-evaluating how they do business and changing the way they interact with customers, manage supply chains, and where their employees are physically located. This has massive immediate and long-term implications for San Diego’s workforce and job composition, as well as regional land use decisions and infrastructure investment.

To identify evolving trends in local business needs and operations, ensuring their ability to grow and thrive in the region, EDC began surveying more than 200 employers in the region’s key industries in January. Given the uncertainty of this moment in history, EDC will continue to survey these companies on a rolling basis throughout 2021 to monitor and report out shifts in their priorities and strategies. These insights will help inform long-term economic development priorities around talent recruitment and retention, quality job creation, and infrastructure development. Businesses are surveyed on several topics, with varying emphases in each wave.

Here are three key findings:

  1. Everything is different, yet the future is bright. The pandemic has fundamentally altered how businesses operate across key industries. However, most companies are optimistic about their ability to pivot and emerge even stronger.
  1. Remote working is no longer a perk or competitive advantage—it’s the standard. Most companies view remote working as here to stay. This is viewed as both a benefit and as a threat to employee retention.
  1. Long commutes have been replaced by a blurring of work-life boundaries. Companies are struggling in maintaining employee morale and engagement. While many are seeing signs of employee burnout and isolation, few report significant concerns with retention.

San Diego’s innovation cluster rises to meet the challenge

One year into a global pandemic, San Diego’s most innovative companies and industries are well on their way to economic recovery. In fact, high-wage jobs—many of which are concentrated in aerospace, life science, and technology industries—have more than recovered from the pandemic-driven recession. This is welcome news as these are key drivers of economic growth in the region. In fact, every “innovation” job supports another two jobs elsewhere in the economy.

Even though growth has returned to the innovation cluster, the pandemic has disrupted the way these companies operate. The overwhelming majority (83 percent) of companies surveyed agree that the pandemic has fundamentally altered their industry. Yet, nearly as many (81 percent) feel that their industry has been able to adjust and remain healthy. Even more encouraging, 87 percent believe their industry will emerge even stronger once the pandemic has ended after adopting new ideas and implementing new strategies. However, those in the aerospace industry express somewhat lower levels of optimism, as the industry faces continued uncertainty around travel safety and demand.

Confidence is somewhat lower among smaller firms. Only 77 percent of those with fewer than 50 employees agree that their industry would emerge stronger and 10 percent strongly disagree. This likely reflects the disproportionate impact that the pandemic has had on small businesses, regardless of industry. While those in leisure and hospitality have certainly been the hardest hit, even small firms in professional and business services, including scientific and technical services, are currently experiencing lower revenues compared to before the pandemic.

Yet, the strongest signal for optimism comes from the direct response in combatting the novel coronavirus. San Diego companies have been among those leading the fight in everything from personal protective equipment and diagnostics to therapeutics and vaccine development. The life-changing and life-saving companies have pivoted and innovated yet again, drawing in record levels of venture capital investment. In the fourth quarter of 2020 alone, the region received nearly $2.7 billion in venture funding—with almost three-quarters going to life sciences and healthcare companies—which is more than three previous quarters combined, and $2 billion more than Q4 2019. The surge in investment and jobs recovery has the majority of innovation companies confident in the region’s ability to grow in prominence, or remain steadfast as a global leader in tech and life sciences.

The war for talent has no bounds

Talent has always been San Diego’s competitive advantage. People come from all over the world to get educated and build meaningful careers in everything from software engineering and autonomous vehicles to genomics sequencing and cybersecurity. San Diego’s innovation industries are among the highest-paying and fastest-growing in the region. Despite a global pandemic, many of these industries are accelerating hiring. The information sector, including telecommunications and information technology services, posted 20 percent more unique job ads in December 2020 than the year prior.

However, top talent remains hard to find. And while many of the jobs in these industries have shifted to either partially or fully remote, there are mixed feelings about whether it is a benefit or a detriment to talent recruitment and retention. Perceptions are tied to a company’s approach to attracting remote talent (see below). On one hand, a majority of respondents think that their ability to hire and retain skilled talent will not be impacted by the pandemic because of remote work capabilities. Many have expanded their recruitment beyond San Diego’s borders and are willing to accommodate working from outside the region to retain the very best talent. These San Diego-based companies that view the world as their pool for talent are embracing a global workforce that can get the job done from anywhere.

Yet, there is also a large minority of companies that view the pandemic as impacting the way they hire and retain talent. Again, the shift to remote work is cited as the top reason, with an even larger proportion (35 percent) identifying it as the cause for their pessimism. In fact, 45 percent of survey respondents rate hiring new employees during the pandemic as either “difficult” or “more difficult” than before, compared to 18 percent who view it as “easier” or “much easier.” Furthermore, nearly half of respondents cite talent recruitment as an area needing assistance and 20 percent identify it as an “urgent need.”

The pandemic has leveled the playing field for markets aiming to attract the best and brightest knowledge. San Diego’s competition with companies and regions across the country has increased. The region’s high cost of living is by far the biggest impediment to talent attraction, with 44 percent of respondents identifying high home prices as the most negative attribute of the San Diego market. This is due in large part to housing production not keeping pace with employment growth. As a result, San Diego has the second highest median home price among the 25 largest metros in the U.S., behind only San Francisco, and home prices jumped another 11 percent in 2020. Ensuring San Diego is an attractive and affordable place for talent and business is critical to maintaining its regional competitiveness.

Responding to workers’ needs is top of mind for companies

Transitioning to a remote work environment has been challenging. Business leaders are acutely aware of the need to balance conducting business as usual and responding to the changing needs of a newly remote workforce. Survey respondents report signs of ‘zoom fatigue,’ blurred work-life boundaries, and isolation among employees. While it has not yet significantly impacted retention, a full 60 percent of respondents rated “maintaining employee morale” as more challenging during the pandemic.

Furthermore, respondents expressed concerns about returning to an in-person work environment, recognizing that not all employees will want to return to the office immediately or full-time. This next phase of work will bring about a new set of challenges and a need for new policies, systems, and support for San Diego workers. Many questions remain around how much space will be needed and how it might need to be reconfigured to accommodate a flexible work environment that is also responsive to new health and safety requirements.

Survey respondents rated individualistic factors related to professional growth and work-life balance as the most important attributes to a competitive market for talent attraction and retention. This differs greatly from perceptions from just four years ago, when top universities and an entrepreneurial spirit were more top of mind. The desire to adapt and respond to the most pressing needs of its workforce, reinforces the notion that San Diego businesses value talent above all else.

Stay tuned for more on San Diego’s changing business landscape. EDC will be back every other month with more trends and insights. For more data and analysis visit: sandiegobusiness.org/research.

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Integration Pilot Program: San Diego’s foundation for emerging aviation technology

By Katelyn McCauley,

In 2017, the United Stated Department of Transportation, which oversees of the Federal Aviation Administration (FAA), launched the unmanned aerial systems (UAS) Integration Pilot Program (IPP) to build pathways that would encourage the expansion of the commercial unmanned aerial systems industry safely and cohesively with existing piloted aircrafts.

Capitalizing on San Diego’s rich aerospace history, industry relationships, and unique operational environment, EDC partnered with the City of San Diego’s Office of Homeland Security to become one of only 10 jurisdictions across the United States to participate.

Over the past three years, San Diego IPP has laid the groundwork for regional companies of all sizes to develop cutting-edge UAS technology here in San Diego by utilizing the streamlined FAA approval process, supporting homegrown talent, and positioning the region as a UAS center of excellence by encouraging the industry’s growth.

As we wrap up the program, below are a few of the key successes:

Public Safety

The challenge:
Chula Vista Police Department is largely understaffed—yet as the second largest city in San Diego County, it has been recognized at the tenth safest city in the United States with jurisdictions of more than 270,000 residents.

The solution:
In coordination with the San Diego IPP, Chula Vista Police Department became the first in the nation to utilize drones as a proactive public safety tool. The department saw drones as a new opportunity to create a Drone as a First Responder (DFR) unit as a safer, less expensive alternative to helicopter and officer units.

San Diego IPP helped Chula Vista Police Department obtain a FAA permissions and waivers to provide safe, transparent jurisdictional coverage. Ultimately, Chula Vista Police Department was able to dispatch UAS to remotely assess the scene of emergency calls for service.

The results:
Together, San Diego IPP and Chula Vista Police Department achieved great heights:

  • First public safety organization in the nation to be granted a Beyond Visual Line of Sight Certificate of Authorization.
  • First in the nation to achieve a Tactical Beyond Visual Line of Sight (“Close Proximity, Low Altitude”) Waiver. This enables police officers on scene to utilize small UAS to search behind obstacles, at a very low altitude to ensure safety for the officers, suspect, and potential bystanders.
  • First in the nation to achieve 2-to-1 Operations and is pending 100 percent jurisdictional coverage for a Public Aircraft Operator Certificate of Authorization. This enables the Remote Pilot in Command (the operator) to operate two drones at one time, an operation that required an entirely new FAA process to be created, and ultimately expanded service coverage for all residents in the City of Chula Vista.
  • Safe information dissemination to at-risk populations for COVID-19 response.
  • Statewide, nationwide, and international acclaim for public safety and innovation. San Diego IPP and Chula Vista Police Department received the 2020 AUVSI XCELLENCE Humanitarian and Public Safety Award, the 2019 California Police Chief’s Association Innovation Award, and were highlighted in UAS Norway, Chicago Tribune, Police Chief Magazine, Interdrone, Department of Justice’s DRONES publication, and more.

To date, DFR has responded to 4,303 calls, assisted in the arrest of 558 suspects, was the first to arrive on scene 1,987 times, and has an average response time of 224.49 seconds.

Notably, in 1,065 instances, DFR has been able to avoid dispatching officer patrol units on scene—freeing those resources for other service calls and mitigating potential officer-involved confrontations.

COMPLEX AND CRITICAL Delivery

Despite airspace complexities and difficult operating environments, San Diego IPP leapt at the prospect to test the viability of both commercial food and medical specimen delivery within our region. San Diego IPP partnered with Uber, Matternet, and UPS Flight Forward to accomplish cutting-edge, time-sensitive deliveries in San Diego.

Food Delivery

The challenge:
On the heels of a white paper on the future of urban air transportation, Uber Elevate was born. To bring its vision to fruition, Elevate determined a need for a multi-pronged effort at advancing Urban Air Mobility (UAM) efforts nationwide, but needed help obtaining permission for and conducting safe delivery testing.

The solution:
Through a series of tests and strategic public-private partnerships, IPP helped the company take the first step toward urban air transportation.

San Diego IPP matured Uber Elevate’s initial business model past short-distance flights at San Diego State University to focus on a more complex delivery route from coastal Chula Vista to the Coronado Cays. San Diego IPP and Uber Elevate worked with local public and private partners for three months to coordinate efforts for a single week of safe delivery testing and an official Part 107 Commercial Food Delivery in December 2019.

Initially focused on food delivery convenience for the end user, San Diego IPP and Uber Elevate ultimately found an opportunity to expand areas of service for regional small businesses and provide options for communities without equal access to food delivery.

The results:
Through this effort, San Diego IPP achieved:

  • The first real time Remote Identification test in the country. Remote Identification allows interested parties to utilize an application that enables the individual(s) watching to identify the drone operator and follow the drones path in real time.
  • Strategic public-private partnerships. To achieve one week of operations, San Diego IPP coordinated efforts with Department of Defense (DoD), Department of Homeland Security (DHS), United States Navy – North Island Naval Air Station, and the local field office at Customs and Border Protection to mandate a minimum altitude to avoid conflicts with existing aviators. Additionally, San Diego IPP worked with the Port of San Diego to create new land use agreements for take-off and landing zones in undeveloped areas along the San Diego Bay for the week of operations. Finally, the Cities of Chula Vista and Coronado both engaged in testing planning efforts and advocacy. The first official Part 107 Delivery was made to Coronado City Council Member, Bill Sandke.
  • Innovative safety process formation. The United States Fish and Wildlife Service, which oversees two sanctuaries adjacent to the route, worked with the San Diego IPP team to create solutions to addresses the safe operations of UAS in, near, and around animal sanctuaries, in coordination with FAA and the Department of the Interior legal counsels.

Medical Specimen Delivery

The challenge:
With San Diego’s globally recognized expertise and innovation in life sciences, medical specimen delivery was a particularly important goal. With the ability to delivers medical specimens via UAS, San Diego healthcare providers could improve delivery speed and reliability, and ultimately cut costs and improve care. However, Matternet needed help obtaining waivers for night operations and flights over people to support its tests.

The solution:
After extensive groundwork, San Diego IPP helped Matternet obtain accommodations for proof-of-concept flights at UC San Diego Health’s Jacobs Medical Center, including a §107.39 waiver enabling operations over people and a §107.29 waiver enabling operations at night. Matternet and UPS Flight Forward were operable and making vertical moves in San Diego by early 2020.

The results:
San Diego IPP, with Matternet and UPS Flight Forward, accomplished:

  • 259 successful flight operations at the UC San Diego Health Jacobs Medical Center.
  • Two separate route approvals on the UCSD Health Jacobs Medical Center Campus.

Next Steps

After three years of aiding in the development and growth of an emerging innovation industry, San Diego IPP will not be moving forward with the FAA’s next step, BEYOND.

EDC will continue to work to ensure San Diego remains a welcome space to research, design, develop, test, and advocate for the drone community, and will continue to provide exemplary service for any UAS business interested in expanding their business or concepts in our region.

Finally, we are excited to continue working with our regional leaders to ensure that we support opportunities that advance this emerging industry, as innovation is the cornerstone to our region.

Contact SDREDC
To learn more, please contact us.

 

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San Diego is one of the first regions to deliver medical specimens via drones

By Katelyn McCauley ,

Blood samples delivered by drone? Medical specimens via drones may soon become a reality thanks to a new partnership between UPS Flight Forward and Matternet, in conjunction with UC San Diego Health.

Drone on black stand at UC San DIego in front of large building

Medical specimens take flight

Last week, the first medical specimens were delivered by drone as part of a larger effort to integrate drones into San Diego’s airspace as part of the Integration Pilot Program. UC San Diego Health will be utilizing UAS as a means to deliver medical specimens and supplies to expedite health care services. It has become common practice for labs to operate separately from a hospital. This new partnership may mean faster diagnosis, treatment, or even peace of mind.

“Right now, most biological samples must travel between sites by courier car, within designated hours,” said James Killeen, MD, clinical professor of emergency medicine and director of information technology services at UC San Diego School of Medicine in UC San Diego’s announcement. “That leaves the system vulnerable to the vagaries of road congestion, accidents, construction, and more. Travel time can be slow and unpredictable. A drone can fly over such obstacles in a much more direct way, and take just a few minutes to cover the same distance.”
If successful, drones may even be used for organ transport in the future.

Why San Diego is creating a drone hub

According to the FAA Aerospace Forecast and Drone Analytics, the global drone industry is projected to be worth $43 billion by 2024. As a region, San Diego has made a name for itself by capitalizing on nascent technologies that turn into major economic engines – think genomics and ICT/satellite technology.

That’s why in 2017, EDC – in collaboration with the City of San Diego – spearheaded San Diego’s application to serve as a site for the Federal Aviation Administration’s (FAA) Unmanned Aerial System (UAS) Integration Pilot Program (IPP). San Diego as one of 10 jurisdictions that received the designation and the densest urban environment selected.

Today, EDC serves a much larger role as the program manager through an agreement with the City of San Diego. In addition to streamlining the process and clearing regulatory hurdles for operators (think companies like Matternet), the IPP also looks to position San Diego as a UAS center of excellence by encouraging the growth of the industry and building homegrown talent.

To achieve these goals, the IPP has four focus areas (International Relations, Environmental Survey, Public Safety, and Package Delivery), and boasts over 20 private, non-profit, government partners.

How the IPP launched SD’s first medical specimen flight

On  February 25, the FAA officially approved the UC San Diego Health flight route that enabled Matternet, as the UAS operator, to carry out this mission until April 2023. UC San Diego is the second hospital system in the nation to transport medical specimens via drones.

Related EDC articles and research:

EDC-led program helps Chula Vista PD hit new drone milestone

By San Diego Regional EDC,

From surveying land after natural disasters to delivering packages, drones offer a world of possibilities to advance society and unlock economic potential. However, in order for this type of drone work to become a reality, they must be able to operate beyond a visual line of site(BVLOS). At the moment, no one is allowed to fly BVLOS in U.S. airspace without obtaining a special, hard-to-get waiver from the Federal Aviation Administration (FAA).

Chula Vista Police Department is the exception. As part of the FAA’s Integration Pilot Program (IPP), San Diego is one of only 10 agencies nationwide selected to partner with private sector entities to accelerate safe UAS integration and innovation both regionally and nationally. In October, the Chula Vista Police Department announced a new test program to deploy drones as first responders. Now, thanks to the support of CAPE, Airmap and, Skyfire, the Chula Vista PD has become the first public safety agency within the 10 IPP destinations to receive a beyond visual line of sight waiver. This waiver will help Chula Vista continue to expand its Drone as First Responders program across the city providing faster responses and better services to the community.

San Diego’s IPP is comprised of the city of Chula Vista, the city of San Diego, and San Diego Regional EDC. Recognizing the potential of drone technology for the regional economy, EDC plays a key role in driving the IPP work and supporting the cities of Chula Vista and San Diego with successful integration.

Chula Vista PD launches drones as first responders, as part of UAS IPP program

By San Diego Regional EDC,

Today, the Federal Aviation Administration, City of Chula Vista, City of San Diego, San Diego Regional EDC and Cape announced the launch of a test program to deploy drones for proactive public safety operations by the Chula Vista Police Department. This project has been made possible through the FAA’s Unmanned Aerial Systems Integrated Pilot Program (IPP).

As part of the IPP, drones equipped with Cape Aerial Telepresence software will be deployed to a scene within two minutes from Chula Vista Police Department headquarters, to provide police with video and decision quality data. In true #SDlifechanging fashion, these drones will serve as first responders, assisting in incidents such as life safety, crime in progress, fleeing subjects, fire and more. The drone program is an element of the Chula Vista Smart City Action Plan to implement technology and data tools to enhance city services, advance public safety, promote the efficient use of taxpayer dollars, engage residents, and encourage growth in the local economy. Simulation below:

San Diego region among first to deploy drones as first respondesers from San Diego on Vimeo.

Since CVPD began operations on October 22, a drone has been deployed 29 times. About 30 percent of those calls were related to some type of disturbance and about 17 percent of the time, drone pilots were able to clear a call without ground units responding (e.g., the subjects were gone), thereby keeping officers free for higher priority calls. The drone also was used to locate a felony domestic violence suspect in a transient camp surrounded by heavy vegetation. The drone pilot was able to safely direct officers to the camp while observing the suspect’s actions until he was arrested. The drone was also successfully used to locate and direct officers to arrest subjects on two other disturbance calls. These are just a few of the early successes of CVPD’s UAS pilot program. Drone pilots and patrol officers recognize the potential for even more public safety benefits as the program evolves.

San Diego’s IPP local program also will include projects like flying medical specimens from UC San Diego for expedited results and cost savings, testing food delivery from restaurants to consumers using Uber, and testing the integration and communication between driverless cars and unmanned aircraft systems.

The City of San Diego’s Homeland Security Department is collaborating with more than 20 regional organizations to implement the IPP. In addition to EDC, partners include: City of Chula Vista , Cape, AirMap, Qualcomm, AT&T, California Governor’s Military Council, California Governor’s Office of Business and Economic Development (GoBiz), Uber, UC San Diego Health, Intel, GE Ventures, and others.

The San Diego regional IPP is one of only 10 agencies nationwide chosen to participate, including the states of Kansas, Virginia, Alaska and North Dakota and the cities of Reno and Memphis. The San Diego region also was selected as one of 10 autonomous vehicle testing sites in the nation in 2017. The designated testing sites form a national community that share information and collaborate with the private sector to advance the safe development of unmanned vehicles.

The federal Unmanned Aircraft System (UAS) Integration Pilot Program (IPP) is an opportunity for state, local, and tribal governments to partner with private sector entities, such as UAS operators or manufacturers, to accelerate safe UAS integration. The Program is expected to foster a meaningful dialogue on the balance between local and national interests related to UAS integration and provide actionable information to the USDOT and FAA on expanded and universal integration of UAS into the National Airspace System.

For more information on the drone program, visit www.sandiego.gov/ohs/unmanned-aircraft-systems.

Aerospace in Southern Calfornia

By San Diego Regional EDC,

A report published together with Los Angeles EDC

The aerospace industry was built on the vision and dreams of entrepreneurs and risk-takers who have continually pushed the limits of technological innovation. While the technologies that are shaping the future of aerospace continue to evolve, Southern California’s rich, deep and strong ecosystem of large and small companies, research and educational partners, an active defense sector amid a culture of risk-taking and future-thinking remains one of the world’s most competitive regions for aerospace innovation.

This report, published in 2016 and produced in collaboration with Los Angeles EDC, examines the state of the industry today and how it will evolve in the future.

READ THE FULL REPORT

AEROSPACE INDUSTRY PROFILE