Consider Tijuana, Mexico. Our binational region, which includes San Diego County, Imperial County, and the Mexican State of Baja California, is home to more than 7.1 million people – and specializes in high-value goods and services.
San Diego and Tijuana jointly host some of the world’s strongest innovation clusters, including the world’s largest medical device cluster (Trade and Competitiveness in North America, 2018), due in part to significant foreign direct investment from global firms that often co-locate on both sides of the border. Firms like Thermo Fisher Scientific are already leveraging all our binational region has to offer, including specialized production processes and highly-skilled workers.
Who should consider leveraging cross-border talent?
Companies that are:
Considering outsourcing talent outside of San Diego
Currently outsourcing talent but looking to build a geographically closer team
Cost-conscious but looking to expand
Small to mid-sized and struggling to compete in the battle for talent.
can all benefit from leveraging talent in both San Diego and Tijuana.
Why consider cross-border talent?
Tijuana’s proximity to San Diego makes it a strong strategic choice for talent and business partnership, especially for remote and hybrid teams.
First, compared to working with talent around the world, there can be fewer limitations when your company leverages talent in Tijuana – whether visa-related or otherwise. For regional innovation companies like those in the life sciences cluster, too, the ability to transport samples between San Diego and Tijuana teams is much simpler and quicker than other international options.
And when it comes to culture and oversight, Tijuana is just 20 minutes south of San Diego, allowing management to provide more direct support via easy day trips to Tijuana teams and offices. Because Tijuana is in the same time zone as San Diego, teams can enjoy easier collaboration and culture-building every day – whether or not companies remain remote or consider returning to on-site work.
Who can help me?
If leveraging Tijuana talent can help your company but you’re not sure where to begin, there are a number of programs and partners that may be able to support or help fund your cross-border talent search.
If your company is based in San Diego and looking for general or tech talent, contact World Trade Center San Diego to get started.
If your company is based in Tijuana and looking for tech talent, contact ITJuana to get started.
If your company is based in Tijuana and looking for general or tech talent, contact Tijuana EDC to get started.
Interested in growing your business internationally?
World Trade Center San Diego, home of the Export Specialty Small Business Development Center (SBDC), works directly with companies – free of charge – to help them expand internationally and grow in San Diego. Whether your small company is interested in learning about exporting and international growth, or your small or medium-sized company is ready to export and grow internationally, World Trade Center San Diego is here to help.
Here are three things we learned from the session about foreign investment into San Diego:
1. FDI is a positive for the United States, but requires caution
Foreign direct investment (FDI) provides American companies with valuable capital to grow and prosper. However, it is critical to exercise caution and conduct proper due diligence when considering investment from foreign countries. There is always a chance rogue actors could undermine American companies like yours by way of theft of intellectual property.
2. U.S. companies are losing out on American-made innovative technologies to adversaries
Foreign countries are increasingly leveraging FDI as a means to gain access to new technologies via control of intellectual property. One way adversaries do this: By raising venture capital and early stage funds to target innovation hubs like San Diego.
Unsurprisingly, the United States and its partners comprise the vast majority of innovation hubs around the world, making them and their homegrown innovation companies high-value targets. The majority of threats have been toward companies in the emerging technology space, including 5G, artificial intelligence, semiconductors, and unmanned systems. But recently, improved due diligence and private capital has allowed CFIUS and its partner organizations to minimize these threats toward American companies and technologies.
3. It pays to proactively reach out to CFIUS
CFIUS is an interagency committee authorized to review certain transactions involving foreign investment in the United States and certain real estate transactions by foreign persons, in order to determine the effect of such transactions on the national security of the United States. Companies that are considering leveraging foreign investment are encouraged to reach out to the team at CFIUS for no-charge advising to ensure your intellectual property will remain safe. CFIUS will need your company name, technology, and foreign investor information to determine if the transaction necessitates review through its due diligence process.
To get started with no-cost advising from the CFIUS staff, please reach out to David Rader, Deputy Director, Office of Foreign Investment Review at Department of Defense – david.m.rader.civ@mail.mil
Interested in growing your business internationally?
World Trade Center San Diego operates as an affiliate of the San Diego Regional Economic Development Corporation. WTC San Diego works to further San Diego’s global competitiveness by building an export pipeline, attracting and retaining foreign investment, and increasing San Diego’s global profile abroad.
Do you want to know more about the work of World Trade Center San Diego? Click here to receive our monthly Global Brief Newsletter, delivered straight to your inbox.
Welcome to the fourth 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 the March, May, and July editions.
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 fourth wave of surveying conducted in August 2021:
Life Sciences companies struggle to keep pace. Employers reported higher earnings and headcount but also increased difficulty attracting and retaining talent
Supply chain disruptions hurt business development. The more profound impact of prolonged supply chain issues may be on San Diego business operations not local consumers.
Remote work is driving companies to scale down office space. Life Sciences and Manufacturing are the exception, where rising sales and increased staffing will require companies to add space.
The BRI slid 8.4 points in August to settle at 55.3 after coming in at a solid 63.7 in June. August’s read suggests that the recovery could be slowing and reflects deteriorating views of present business conditions and slightly less upbeat expectations for the next six to 12 months.
All but two subindex values declined in August. The renewed challenges faced by businesses led many to temper their future expectations somewhat, though the expectations subindex remained comfortably in expansionary territory at 61.8. While companies still anticipate an improving local economy over the next six to 12 months, the economic expectations subindex for six months out fell 16.4 points from 83.2 in June to 66.8 in August. Meanwhile, the subindex for economic conditions 12 months out fell 15.3 points from an exuberant 92.0 to a more measured but still optimistic value of 76.7.
Life Sciences companies struggle to keep pace
Employers surveyed reported an acceleration in hiring; the first time the employment subindex moved into expansionary territory. While this is welcome news, employers also reported increased difficulty hiring new workers. Though much attention has been given to the suggestion that extended unemployment benefits are keeping the unemployed from returning to work, the data doesn’t seem to support it. In fact, many of the pre-pandemic hiring trends have persisted and the industries having the hardest time filling jobs are those that are high-skill and high-paying. There were more than 118,000 unique job postings across the region during the month of August. The top job posting industries fall into the Tech and Life Sciences clusters and the most posted occupation was Software Developer (yet again).
San Diego Life Sciences companies have been struggling to add talent fast enough. These companies have been at the forefront of developing treatments and producing medical devices aimed at combatting COVID-19. As such, they have grown rapidly, drawing more than $9 billion in venture capital funding since the pandemic began. While Life Sciences companies reported higher revenues, earnings and employment relative to before the pandemic began, they also report the greatest difficulties filling new positions, keeping their highly in-demand talent from competitors, and dealing with suppliers and vendors. Despite these challenges, most have great expectations for the year ahead, with plans for increasing staff, their physical footprint and remote work capabilities.
Supply chain disruptions hurt business development
One of the longest lasting impacts of the pandemic has been on global supply chains. Companies across the country remain light on inventory even as demand for goods from furniture and clothing to recreational goods and electric bicycles has jumped. In San Diego, consumer spending is now up 11 percent compared to February 2020 before any COVID-related shutdowns began. Many consumer goods are manufactured overseas, and as the Delta variant has spread in many parts of Asia, production has slowed or even halted. While supply chain disruptions may be affecting what San Diegans can buy and the prices they will pay, the more profound impact may be in what San Diego companies can sell and to whom.
Across all industries, San Diego companies noted continuing difficulties with managing suppliers and vendors. From Aerospace and Manufacturing to Software and Life Sciences, supply chain struggles have become more disruptive throughout the summer months. Upstream labor shortages have reduced production, port and travel delays led to late or canceled shipments, and the unavailability of microchips and plastics prevented companies from delivering finished goods and even services. This may help explain that while revenues and earnings are up, new business development is becoming increasingly difficult for companies surveyed, with the subsegment BRI falling sharply into contractionary territory of 36.1 in August from 51.7 in June.
These delays and disruptions not only hurt the companies that depend on raw materials and intermediate goods, they also directly impact the more than 54,000 people employed in San Diego’s Transportation and Logistics value chain. Furthermore, supply chain disruptions to San Diego companies hinders their ability to serve customers across the world. San Diego is a top 10 services-exporting metro, specializing in Professional, Scientific, and Technical Services like Research and Development (R&D), Cybersecurity, Engineering, and Software. These industries have massive impacts on the local economy with each 100 direct jobs supporting 200 more elsewhere in the region.
Remote work is driving companies to scale down office space
After more than 18 months of remote work, with multiple fits and starts to get back into the office, many companies are coming to terms with some form of permanent remote work for their staff. The high levels of efficiency gains reported in the June survey has since subsided but remain net positive and strongly so. Employers are not necessarily looking to further expand their remote work capabilities or adopt new technologies for remote work, but many report a high desire among their workforce to maintain remote work options. Several reports from across the country and industry show that workers are primarily interested in flexible work arrangements that allow them to go into the office as needed while being able to manage their personal lives and avoid unnecessary commutes when possible. This flexibility is especially important to working parents facing unpredictable school and daycare disruptions as the Delta variant causes classrooms to temporarily shut down, sending their children back home.
With fewer workers in the office full time, more companies are making the decision to reduce their physical footprint. Many Technology and Software companies report difficulty justifying large, empty offices and thus plan to scale down significantly over the next year. Even companies in Education and Healthcare, that serve customers in-person, are moving back-office workers to either hybrid or fully remote work environments.
However, there are still companies looking to add space. These are mostly concentrated in Life Sciences and Manufacturing, where strong sales and increased hiring require more room to accommodate this growth. While many of these companies indicated plans to add office space, even more need industrial and lab space for R&D. Currently, there is almost 7.7 million square feet of industrial and flex space available and nearly 19 million square feet of office available across the region. The growing needs of companies suggests the balance may need to shift in the other direction.
Whether pharmaceuticals or beer, San Diego companies have long produced the things that make life more comfortable and more enjoyable. These companies also drive economic growth in our region. It is important that they have the assets they need, both in terms of physical infrastructure and skilled talent, to grow and thrive in San Diego.
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.
World Trade Center San Diego (WTCSD) partnered with the American Chamber of Commerce (AmCham) in Shanghai and San Diego Sport Innovators (SDSI) to host a business roundtable centered on the opportunities and challenges of exporting to China. Whether a small to mid-sized San Diego business or a more experienced San Diego corporation, all businesses can leverage the opportunity to export to a growing Chinese market, even amid COVID-19 challenges.
Here’s what you need to know.
1. You’ll need to locally register your business
Local officials in China have enormous say in terms of registration, policies, and enforcement. Be proactive in reaching out to the local U.S Commercial Service and AmCham teams—these experts support businesses like yours every day and can help keep you from running in circles.
2. Find the right international partner to minimize challenges and delays
It’s crucial for your business to identify suitable business partners in China or in the international space to help you understand and overcome non-tariff barriers. COVID-19 restrictions have made this process extremely difficult and global partners anticipate that pandemic-related delays and challenges will persist for the next 12-24 months. Especially now, companies should make sure to seek out and lean on local partners to increase your chance of successfully breaking into the Chinese market.
3. Leverage target demographics and Gen Z trends
China’s Gen Z are increasingly driving social trends…and consumer purchases, thanks to their disposable income. While much of their focus remains on domestic Chinese brands, their digital savvy opens up opportunities for your company to get in front of a growing market that isn’t necessarily loyal to the brands of their parents’ time. SDSI also notes that Gen Z has driven particular interest in premium consumer goods, with a focus on action sports like skating following the 2020 Olympics.
Strategizing opportunities to promote your brand to the right audience on popular digital platforms like WeChat or leveraging the right polarizing figures can help drive your successful marketing.
4. Do the work to understand consumers and cultural differences
Understanding consumer demand at the tactical level (on the ground) is critical to your company’s success. To be seen as an attractive option for your customer base, keep in mind cultural and social norms outside the U.S. For example: Understanding and leveraging Chinese holidays and special events can mean success for your company, with the opportunity for high interest and ability to reach a large demographic…if you do your research.
With some preparation, San Diego companies can succeed in the current business climate.
Businesses that have had success in exporting to China tend to do the following five things:
Work with local, in-country partners that can help your company navigate COVID-19 and understand local restrictions.
Leverage local networks to provide guidance on legal issues, and introductions to vetted service providers.
Identify and connect companies with distributors and industry consortiums.
Obtain market intelligence that helps gain perspective on overall market climate for example, understanding China’s digital landscape.
Interested in growing your business internationally?
WTCSD is now accepting applications for its flagship export assistance program, MetroConnect. 15 companies will be selected to receive a $5,000 export grant, 7 curated export workshops, access to mentors, complimentary translation software, international flight discounts, PR and marketing support from WTCSD staff, and the chance to win a $25,000 grand prize. For questions, please reach out to Lucas Coleman (lc@sandiegobusiness.org). Apply by November 15
About:
WTCSD Founded in 1994 by the City of San Diego, Port of San Diego, and San Diego International Airport, World Trade Center San Diego (WTCSD) operates as an affiliate of San Diego Regional EDC. WTCSD works to further San Diego’s global competitiveness by building an export pipeline, attracting and retaining foreign investment and increasing San Diego’s global profile abroad. sandiegobusiness.org/wtcsd
AmCham Shanghai The American Chamber of Commerce in Shanghai, known as the “Voice of American Business” in China, was founded in 1915. AmCham Shanghai was the third American Chamber established outside the United States, and now has 3,000 members from 1,300+ companies. As a non-profit, non-partisan business organization, AmCham Shanghai is committed to the principles of free trade, open markets, private enterprise and the unrestricted flow of information.
SDSI SDSI is a nonprofit focused on the Sport and Active Lifestyle industries. Working with Executive Chairman and NBA great Bill Walton, its 100 company membership represents the “Southern California Lifestyle” and includes leading sports and technology brands, Nutrition and Yoga, Surf, Skate, Cycling, Golf and Retail, as well as some of San Diego’s best Service Companies. It focuses on relevant and actionable C-level content that benefits its member companies. SDSI’s award winning Accelerator program features a 20 week Mentoring curriculum whose graduates have raised $86 Million and have a 82% success record. For more info go to SDsportinnovators.org
Each month, World Trade Center San Diego delivers the latest global news and updates straight to your inbox. In September 2021, here’s what you need to know about San Diego’s global trade, investment, and engagement:
WTCSD launches MetroConnect VI
Take your company global or grow your existing international sales with MetroConnect VI, the sixth iteration of World Trade Center San Diego’s flagship export assistance program presented by JPMorgan Chase and Procopio. Apply now to become one of 15 companies selected to receive a $5,000 export assistance grant, attend private executive export workshops, get complimentary access to SystranPRO translation software, and more. ➝ Read More
MetroConnect helps local company create $5M+ in international sales
When Ben Weinrib took over as EDDY Pump’s CEO in early 2019, he committed to elevating his father’s technology and getting it into as many hands as possible. From a $2M contract with the world’s second largest mining company to a deal with the Chilean Navy, learn how MetroConnect helped EDDY Pump take its business global. ➝ Read More
Looking to go global? Take advice from 10 San Diego companies
Entering any global market requires patience, persistence, and expertise. Learn how MetroConnect helped regional companies like Dr. Bonner’s, Coronado Brewing, Scientist.com, and Urban Translations go global—and the advice they have for your company. ➝ Read More
Apply now to become one of 15 companies selected to receive a $5,000 export assistance grant, attend private executive export workshops, get complimentary access to SystranPRO translation software, and more.
Company applicants must:
Be headquartered in San Diego
Be export-ready, meaning the company is already exporting its goods/services or looking to pursue international sales as a near-term priority
Welcome to the third 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 the March and May editions.
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. (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 third wave of surveying conducted in June 2021:
We are amid a great talent reshuffling. Businesses report increasing difficulty hiring and retaining talent, meanwhile the quits rate is at historic highs.
Supply chains remain knotted up. The strategic importance of our cross-border trade has never been clearer.
Space needs are in flux as companies prepare for return to office. Demand for office space may be waning, but life sciences companies are looking to add lab space.
San Diego County firms built on the enthusiasm expressed in April’s survey, with the BRI advancing from 58.9 in April to 63.7 in June. The topline index was pulled higher by more upbeat views of, both, present conditions and expectations for the future. The present conditions index segment rose from 56.1 in April to 59.3 in June while the expectations segment climbed from 65.4 to 73.9 during that time. Business respondents in the region confirmed several trends that have made headlines recently. Companies stated that business conditions have improved significantly over the past two months (due in no small part to California’s reopening in June) while also noting that sourcing talent and suppliers has become significantly more difficult.
A great talent reshuffling
Companies reported that revenues and earnings have improved since April and thus optimism over the next six to 12 months has increased. Expectations are also strong in San Diego’s Innovation cluster. Businesses in this group conveyed that they plan to hire more aggressively in the coming months. This is particularly good news, since each new Innovation job supports another two jobs elsewhere in the regional economy.
Nonetheless, companies also reported having a tougher time attracting new talent as well as increased difficulty retaining existing workers. There has been much ado about labor shortages and the impact of increased and extended unemployment benefits, but the data show that there is a much more nuanced story. First, there is a large mismatch between the talent in-demand and the talent available to work. As of May (most recently available data at time of writing), there were 104,400 people unemployed in the San Diego region and more than 115,000 job openings. However, the top hiring industries are Administrative and Support Services, Professional Services and Manufacturing industries (nearly 40 percent of unique postings), whereas the bulk of the unemployed come from Leisure and Hospitality.
Second, there are record numbers of workers quitting their jobs. The Bureau of Labor Statistics measures the proportion of workers who voluntarily leave their job relative to total employment. This “quit rate” sat at 2.5 percent in May 2021 after falling from 2.8 percent in April—the highest ever recorded. The Conference Board survey’s labor market differential, another measure of views on whether jobs are plentiful or hard to get, vaulted from 36.9 in May 2021 to 43.5 in June. That is the highest level since 2000.
All this quitting not only reflects confidence in the availability of work, but also the changing needs and desires of workers. The San Diego Association of Governments surveyed both employers and employees earlier this year and found that only 36 percent of employers expect to have one or more employees working from home at least one day per week. Meanwhile 44 percent of employees surveyed expect to work from home an average of 1.2 days per week. This difference in expectations partly reflects differences in opinion of how remote work has impacted productivity—only nine percent of employers reported increased productivity during the pandemic versus 48 percent of employees.
Flexibility will be key to keeping and attracting the best and brightest of workers. Perhaps the companies EDC surveyed understand this better than most, as they indicated both improved efficiencies from, as well as increased planned future utilization of, remote work technologies in June compared to April.
Investing in supply chains locally, binationally
Hiring challenges are also impacting supply chains globally. Companies reported a sharp decrease in the accessibility and reliability of their suppliers and vendors. Here, BRI fell from 54.7 in April to a categorical low of 26.5 in June. This corroborates the headlines regarding shortages in lumber and microchips, which has in turn stalled production of higher end goods and led to spikes in commodity prices and other item such as used cars. A lot of these supply chain disruptions are temporary in nature, directly linked to safety measures and restrictions associated with pandemic (this is why longer-term inflation expectations remain stable).
Ports and businesses across the country have experienced ongoing shortages of labor, containers, truck chassis, and more; shipping vessels have been forced to wait in harbors, in some cases for more than two weeks. This global traffic jam has impacted schedule reliability so profoundly it has forced companies to revisit the ways in which they manage risk. Many companies have moved from a just-in-time strategy to just-in-case. This means firms now keep additional inventory on hand, anything from raw materials to the final product. The lack of supply and rising costs have disproportionately impacted small and mid-market suppliers and buyers. This has resulted in direct capital investment from smaller buyers into smaller suppliers to stabilize supply chains and build necessary redundancies.
The pandemic-induced constraint on the movement of goods has only exacerbated trends from the past few years. Trade wars, changing consumer behavior, and e-commerce were already disrupting global supply chains, all of which has highlighted the strategic importance of supply chain management as well as the region’s bi-national assets. The Cali Baja Binational Mega Region is already vertically integrated in Manufacturing, and a warehousing boom in Otay Mesa is increasing capacity for goods coming via land and sea. Cali Baja is an ideal location for companies that want to move operations closer to home but maintain a binational advantage. Continued investment in trade infrastructure, such as our ports of entry and direct route service, will further cement Cali Baja as a binational innovation hub.
The return to office will be in a lab
Back in April, companies indicated a modest desire to increase their physical footprint upon returning to the office. However, companies appear to be less sure as the return approaches. In June, companies expressed plans for a net reduction of space, but a deeper dive into the responses reveals that it is demand for office space that is waning. In fact, there is increasing demand for commercial space—life sciences companies in need of laboratory space. This reflects the influx of investment and rapid hiring we are seeing in these industries, as they lead the fight against the global pandemic. Fortunately, there is nearly 10 million square feet of industrial and flex space across San Diego County currently available for lease or purchase that could potentially accommodate this demand. Current hot spots include Sorrento Valley, Vista, and Otay Mesa; Downtown San Diego is also building capacity rapidly.
The headline story is a positive one for San Diego’s economy, but sentiment is far from identical across business sizes and industries. For example, small companies with fewer than 50 workers logged BRI of 53, which is modestly in expansionary territory, while companies with 250 or more employees measured an index value of 63.7. This makes sense, because San Diego’s Leisure and Hospitality businesses tend to be smaller establishments and were the hardest hit during the pandemic. While companies are enthusiastic to get back to full capacity and add workers, it will likely take a few more months for supply chains and the labor market to normalize again. The pandemic is a generational disruption with widespread ramifications, accelerating several trends already underway, including how and where people are willing to work.
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.
Each month, World Trade Center San Diego delivers the latest global news and updates straight to your inbox. In July 2021, here’s what you need to know about San Diego’s global trade, investment, and engagement:
Through the Export Specialty Small Business Development Center at WTCSD, Funki Adventures secured nearly $10,000 in relief in EIDL and California Small Business COVID-19 Relief Grant funds. The funds helped Funki Adventures pivot to serve domestic customers and purchase enhanced cleaning equipment to keep the company open and operating safely. ➝ Read More
WTCSD recently convened its quarterly Global Competitiveness Council (GCC) to discuss supply chain disruptions due to COVID-19. While San Diego companies have a few more challenging months ahead, there is light at the end of the tunnel, especially in e-commerce. ➝ Read More
Last month, World Trade Center (WTC) San Diego convened its quarterly gathering of the Global Competitiveness Council (GCC), an advisory group consisting of senior executives from many of San Diego’s most globally facing brands. This quarter, the discussion focused on the extraordinary, global disruption we have seen in the supply chain and logistics space amid COVID-19 and other factors.
The GCC welcomed the following industry experts to share their insights:
Eduardo Acosta, vice president, R.L. Jones Customhouse Brokers
David Adler, head of procurement and manufacturing, Cubic Corporation
David Arida, senior vice president, Dexcom
Leslie Oliver, director, global supply chain, Solar Turbines
Hyoduk Shin, Ph.D., professor of innovation and operations, UC San Diego Rady School of Management (moderator)
Trade wars and a pandemic constrained the movement of goods in the past few years, while changing consumer behavior, characterized by a record-breaking uptick in online sales, further strained the supply chain system. As a result, ports and businesses across the country have experienced ongoing shortages of labor, containers, truck chassis, and more, while ocean-going vessels have been forced to wait in harbors, in some cases for more than two weeks. This global traffic jam has impacted schedule reliability and forced companies to revisit the ways in which they manage risk.
A few takeaways from the session:
The pandemic has highlighted the strategic importance of supply chain in most organizations.
With schedule reliability down across the supply chain, many companies have moved from a just-in-time strategy to just-in-case, meaning firms keep a little extra in reserve, whether that be raw materials, final product, or anything in between.
Some mid-market players have been boxed out of getting raw materials and critical supplies by much larger multinational enterprises. This has forced those mid-sized players to source from a network of smaller suppliers to get what they need.
Some companies have supported their smaller partners in the supply chain by investing capital into them. This has de-risked the supply chain by offering stability to weaker links in the chain.
While companies will have at least a few more challenging months ahead, there is a light at the end of the tunnel and things may not look so bleak for the San Diego region in the years ahead. E-commerce is a long-term game and one that San Diego is well-positioned for. Cali Baja is already vertically integrated in Manufacturing, and a warehousing boom in Otay Mesa is increasing capacity for e-commerce goods coming via land and sea. The passage of USMCA, uncertainty from tariff trade wars, and recent reshoring/nearshoring trends have made this mega-region an ideal location for companies that want to move operations closer to home but maintain a binational advantage. By continuing to invest in trade infrastructure, such as our ports of entry and global connectivity, San Diego and the Cali Baja Binational Mega-Region can further cement itself as a hub for innovative firms and people.
We’ll continue these conversations with key partners across San Diego and Tijuana on July 29—check back here soon for details and registration.
Interested in growing your business internationally?
World Trade Center San Diego, home of the Export Specialty Small Business Development Center (SBDC) works directly with companies – free of charge – to help them expand internationally and grow in San Diego. Whether your small company is interested in learning about exporting and international growth, or your small or medium sized company is ready to export and grow internationally, World Trade Center San Diego is here to help.
We joined experts from the United States Small Business Administration (SBA) and Banner Bank to discuss exporting resources, such as the Export Express Loan Program and Export Working Capital Program. We also joined experts from Export-Import Bank of the United States (EXIM Bank), GBC International Bank, and Provident Traders Inc., to discuss open account payment structures, adding value to capital equipment, and EXIM export loan guarantees.
Here are three things we learned at our export finance workshops:
1. Export financing is a key tool in international expansion.
Export financing and export credit insurance can be important tools in your arsenal. With it, you can find more attractive payment terms and mitigate risk. For instance, export credit insurance can allow your business to offer competitive credit terms to foreign buyers for up to 180 to 360 days. Plus, it can protect you against non-payments by foreign buyers due to commercial and political risks.
2. Certain programs might be better tailored to your business needs.
Export Working Capital provides vital resources for exporters to fulfill new orders, such as loan advances up to $5 million. You can use these funds to purchase finished products, raw materials, and supplies, or cover labor and overhead costs.
Export Express Program allows small businesses to borrow up to $500,000 from a local partnering bank. It is the simplest export loan program offered by the SBA, and offers flexibility and ease of use for borrowers and lenders.
3. A range of partners are here to help you.
SBA is an independent agency of the federal government dedicated to providing aid, counseling, and assistance to small businesses in order to preserve free competitive enterprise and strengthen the overall economy. Companies receiving SBA services must meet the SBA small business definition.
EXIM Bank is the official export credit agency of the United States. When private-sector lenders are unable or unwilling to provide financing, EXIM fills the gap by equipping small businesses with financing tools needed to compete in the global economy.
Finally, you can find a wide variety of lenders willing to assist. Lenders can be traditional banks or Community Development Financial Institutions (CDFI), such as Lendistry or CDC Small Business Finance.
Interested in learning more about export financing through a lender’s perspective? To learn more about export financing and the application process, tune in to these on-demand webinars:
World Trade Center San Diego operates as an affiliate of the San Diego Regional Economic Development Corporation. WTC San Diego works to further San Diego’s global competitiveness by building an export pipeline, attracting and retaining foreign investment, and increasing San Diego’s global profile abroad.
Do you want to know more about the work of World Trade Center San Diego? Click here to receive our monthly Global Brief Newsletter, delivered straight to your inbox.
