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The Big Picture San Diego Blog


September 2015

September 25, 2015

 

As one of the foundations of San Diego’s economy, the military plays an integral role in San Diego’s economic vitality. Between the release of San Diego Military Advisory Council’s (SDMAC) 7th annual Military Economic Impact Report, the Governors Military Council (GMC) quarterly board meeting and the upcoming  airshow at MCAS Miramar, the military has been on the radar for many San Diegans this month.  

At the release of the SDMAC economic impact study this past Wednesday, updated data confirmed just how important the military is to San Diego’s economy:

·         The military sector is responsible for about 328,000 -  22 percent - of the region’s total jobs in 2015 after accounting for all of the ripple effects of defense spending – an increase from last year’s 317,000 jobs. 

·         An estimated total of $24.8 billion in direct spending related to defense was sent to San Diego County during fiscal year 2015, an amount equal to about $7,700 for each of the county’s residents.

·         In fiscal year 2015, the 49 U.S. Navy ships home-ported in San Diego will see direct spending of about $2.6 billion, which will equate to a total economic impact of $5.7 billion in GRP.

·         The two aircraft carriers based here will bring a combined $1.5 billion to the economy based on updated inputs, multipliers, and models.  San Diego’s home-ported ship count is projected to climb to a total of 84 by calendar year 2023.

Although these are impressive numbers in themselves, they do not capture the depth of the defense sector. Case in point: in the early ‘70s, two engineers – Irwin Jacobs and Andrew Viterbi -- received a SPAWAR contract to  advance communications technologies (CMDA). Years later, Jacobs would go on to form Qualcomm, San Diego’s largest private-sector employer, and the home of the modern day cell phone.  That is just one example - San Diego’s military drives billions of dollars of research to the region, attracts talent from around the country, and has proven to be instrumental in inspiring major technological innovations impacting both the defense and commercial markets.

 In addition to the numerous elected officials on hand for the study release, the Governor’s Military Council (GMC) simultaneously held its quarterly board meeting in San Diego. Started as an advisory council to protect California’s assets, the GMC became a standing committee with the passage of AB 442, which was signed into law on September 21. While in town, the GMC toured several military staples, including NASSCO, SPAWAR and Naval Base Point Loma. Building on the announcement and the momentum of the GMC’s statewide strategy release, EDC is working in close partnership with SDMAC to ensure San Diego’s key military interests are represented in the GMC's actions. We are pleased to confirm that RADM (ret.) Ken Slaght, a former commander of SPAWAR and the co-chair of the Cyber Center of Excellence (CCOE), will join the GMC as its newest member.    
               
 Our military drives innovation, attracts a diverse set of talent and remains the single most critical industry in terms of impact on our GRP.  The looming threat of sequestration coupled with leadership uncertainties in D.C. confirm that we need to stay diligent and focused as a region to provide the concerted effort required to adequately support our key military installations and our defense industrial base. Our economy depends on it.

 

September 24, 2015

This is part of an ongoing series on the recipients of the MetroConnect Prize, presented by JPMorgan Chase, a grant awarded to 15 companies looking to expand into new foreign markets.


Living in San Diego, businesses and its employees are fortunate to have the highest quality of life – with more than 3,055 hours of year round sunshine, access to nationally recognized beaches, and touted as one of the healthiest cities in the nation. San Diegans are able to go surfing in morning, go to work during the day, and make a tee time just before dinner.

Due in part because of the region’s high quality of life, San Diego’s Sports and Active Lifestyle (SAL) industry cluster is one of the most concentrated among major metropolitan regions in the U.S. In the economic impact study released by EDC in 2013, SAL in San Diego represented more than 1,200 businesses and approximately 23,000 employees.

No wonder that VAVi Sport & Social is quickly becoming one of the most prominent sport league and social event organizers in the nation. VAVi’s beginnings were in creating and carrying out sports leagues around the county – from kickball to dodgeball to soccer. Soon VAVi began to organize large scale events – like the Del Mar Mud Run, taking place this weekend for its 6th consecutive year, and the Ridiculous Obstacle Course (ROC) race.

In February of this year, VAVi announced it would be partnering with Endemol, the producers of “Wipeout”, to organize and promote the WIPEOUT Run. Now the new ROC race, WIPEOUT Run has more than quadrupled the size of VAVi in the last two years.

“In terms of size, WIPEOUT Run is 80 percent of our business,” said Steve Stoloff, CEO of VAVi, in an interview with ABC 10.

And the next step for VAVi?

“VAVi is bringing its hit 5k obstacle series, ROC Race, to Australia,” said Stoloff. “The funds from MetroConnect will support our marketing and business development efforts in Melbourne and Sydney.”

Demand in Australia for the ROC race has been off the charts. According to Stoloff, “…the race sold out in less than 72 hours and we are getting ready to launch an additional day.”

The success of region’s small- and medium-sized businesses is critical to the region’s future, and increasing their global reach is crucial to that success. Through the MetroConnect Prize, companies such as VAVi Sport & Social received $10,000 grants to assist with their next step in going global.

 


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September 18, 2015


This is part of an ongoing series on the recipients of the MetroConnect Prize, presented by JPMorgan Chase, a grant awarded to 15 companies looking to expand into new foreign markets.


The wireless broadband industry contributed more than $146 billion to the U.S. GDP in 2011. It was responsible for 2.8 percent of all U.S. employment – 3.8 million jobs, directly and indirectly. When ranked among the largest industries in the world, wireless broadband would rank 46th, as measured by GDP – larger than publishing, agriculture, and motor vehicle manufacturing.

San Diego’s longstanding strength in the wireless and information technologies makes it the ideal place for the convergence of the healthcare and wireless industries. Aventyn, a digital health company specializing in cloud connected clinical information, is a company that represents this convergence. Its technology provides many solutions through medical imaging, analytics and genome reporting for health providers, pharma-life sciences, pharmacogenetics, and population health management.

“San Diego has been at the forefront of innovations in wireless technology, genomics, and biotech for decades,” said Michael LoVullo, vice president of integrated health solutions at Aventyn. “With the convergence of these significant industries, expertise and knowledge, in collaboration with our health systems, we are able to accelerate the innovation cycle in personalized medicine.”

It is because of small- and medium-sized companies that San Diego’s life sciences industry ranks fourth in the U.S. The success of these firms is critical to the region’s future, and increasing their global reach is crucial to that success. Through the MetroConnect Prize, companies such as Aventyn received $10,000 grants to assist with their next step in going global.

Aventyn plans to target the European market for its international expansion – specifically Germany, Sweden, and the United Kingdom. These are important markets for the wireless health industry since, according to Recon Analytics, the European Union (EU) “…wireless penetration continues to outpace the U.S., with the EU reaching 126.2 percent at the end of 2009 and the U.S. reaching 102.4 percent penetration in June 2011.”

“Currently, our remote monitoring and integrated disease management platform serves several thousands of patients in the U.S., Sweden, and India,” said LoVullo. “We continue to expand in Europe and the Middle East with strategic regional health system partners and globally recognized distributors.”

September 18, 2015

Phil Blair

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“San Diego continues to rise above the uncertainties facing many regions around the country. Earlier this month, we saw a weak national jobs report, but San Diego is bucking the trend and exceeding growth expectations.
Phil Blair, Executive Officer
Manpower San Diego


This post is part of an ongoing monthly series dedicated to the California Employment Development Department (EDD) monthly employment release and is brought to you by Manpower. Click images to enlarge in a new tab/window.

Highlights

The California Employment Development Department (EDD) released statewide county employment data today for the August 2015 period. This month’s data shows that despite a weak August U.S. jobs report released earlier this month, San Diego continued to show signs of a strong economy driven by its key sectors.

The unemployment rate fell back to 5.1 percent in August. The rate is 1.5 points lower than the previous year and 0.3 points lower than the previous month. The California and U.S. average rates also fell to 6.1 and 5.2 percent, respectively, but San Diego remained lower than the state and national averages.

San Diego’s rate fell both due to a drop in persons who identified as unemployed, as well as a small seasonal drop in the labor force. More importantly though, the labor force is up by 25,900 people from August 2014 and unemployment is down 21,500 people over that same period—all amid solid and steady employment growth.

Unemployment Rate

We should note that non-seasonally adjusted employment data for the summer months is almost always filled with wild swings in the labor force and in turn the unemployment rate. This is largely due to thousands high school and college students entering the labor force in May and June, then leaving again in August and September as they return to school. Therefore, summer swings from month-to-month should be taken with a grain of salt, while the focus should instead be on how the labor force is performing differently from the year prior.

On that note, the region’s economy continued to steadily grow above three percent, which we have not seen sustained since 2012. San Diego’s total nonfarm employment grew by 3.1 percent year-over-year, adding 42,400 jobs from August 2014 to August 2015. We have seen three percent growth or greater every month in 2015, other than April where we saw 2.9 percent growth. San Diego’s growth rate was again much higher than the 2.1 percent national rate. The San Diego region is now expected to average 3.1 percent annual growth in 2015, compared to only 2.3 percent in 2014.

Total Nonfarm Employment

Year-over-year private sector growth has also been outstanding and private employment drove 91.5 percent of all employment growth. The total private sector grew by 3.4 percent, out-pacing the private U.S. growth rate of 2.3 percent. Roughly two-thirds of all year-over-year private job growth in San Diego came from four key sectors: construction, tourism, healthcare, and professional, scientific and technical services (PST).

Growth in goods-producing industries slowed, but still showed growth, accounting for 13.1 percent of all private job growth. From August 2014 to August 2015, the manufacturing industry added 1,900 jobs and grew by 2.0 percent, a bit slower than recent months. The ship and boat building industry continued to grow at an outstanding rate. Meanwhile, the construction industry added 3,300 jobs and grew by 5.0 percent.

YoY

Other key drivers for growth included the region’s healthcare sector, which added 6,900 jobs and accounted for approximately 17.8 percent of the region’s private job growth. The tourism industry had a slower month than usual, but still added 5,600 jobs and accounted for 14.4 percent of the region’s growth. Employment services or staffing in the region grew by 4.0 percent and has been steadily growing all year, a good sign for job growth. All of these industries grew faster than the overall private economy.

Given a sluggish national jobs report and uncertainty around global events and interest rates, the August employment report showed good signs for San Diego’s economy. Employment growth remained above three percent and the unemployment rate is creeping back toward five percent or lower. Moreover, 21,500 less San Diegans are unemployed than they were in August of 2014 and 25,900 more have entered the labor force. Important sectors like PST services and construction drove most of the region’s employment growth. San Diego’s economy has shown resiliency during times of national uncertainty, due largely to its concentration in innovative sectors. We expect that trend to continue through the rest of 2015.

Contributions

Note: Our Economic Indicators Dashboard will show how our unemployment rate compares to other US metros and the US total rate when that information is released in the coming weeks.

 

September 15, 2015
This week we sat down with Phil Blair, Executive Officer of Manpower-West, to learn more about the company’s vital role as one of San Diego’s largest and most prominent employment agencies. For four decades, Blair and Mel Katz have worked to build their thriving temp-to-hire firm into San Diego’s fourth largest employer. Manpower is dedicated to enriching people's lives with meaningful employment and development opportunities, and providing companies with innovative workforce solutions that help them increase agility, improve productivity and boost the bottom line - in San Diego and beyond. 
 
1) Tell us about Manpower-West.
We help our corporate clients throughout the county to find trained and capable employees to fill their temporary, temp-to-hire, and staff positions. Through Manpower Search, we provide permanent placement search, specializing in the placement of executive assistants, CFOs, controllers, and marketing professionals.  We are also pleased to offer discounted rates for non-profits.
 
Manpower-West is the largest Manpower franchise in the U.S., with annual revenues exceeding $125 million. Each day, we employ 3,500 associates jobs in our region, allowing our clients’ companies and their employees to thrive in the ever-changing world of work. 
 
2) What are some advantages to being located and doing business in San Diego?
With all the great economic strides San Diego has made in recent years, we’ve become home to some of the world’s most innovative and vibrant companies, especially in the fields of science, engineering, medicine, and cybersecurity. Learn more about Manpower's critical presence in San Diego here.
 
3) San Diego is full of dynamic companies, firms and service providers influencing global trends and innovation. Pick another San Diego company that is at the top of its game. 
Qualcomm will always be near and dear to our heart.  It continues to be the employer of choice and one of the most innovative and exciting companies in our region.
 
4) What do you anticipate for your company in five years? What do you anticipate for San Diego? 
We’re excited about the potential for growth -- not only throughout the soon to be eight states in which we operate franchises, but also about San Diego’s continued potential as a global economic hub. That’s true in so many ways, especially within the past decade or so. We truly believe the best is yet to come.
 

September 11, 2015

This is part of an ongoing series on the recipients of the MetroConnect Prize, presented by JPMorgan Chase, a grant awarded to 15 companies looking to expand into new foreign markets. Subscribe here to receive new posts every Wednesday on this topic.


“San Diego is every sports and active lifestyle company’s ideal location,” said Lisa Freedman, former executive director of SD Sport Innovators. “While there are other important and larger verticals in San Diego, the sports and active lifestyle cluster is a very strong community where authenticity goes hand in hand with innovation. As a result, people around the globe not only purchase and use, but they also rely on products developed and manufactured right here in Southern California.”

San Diego’s sports and active lifestyle (SAL) manufacturing is the most concentrated industry among major metropolitan regions in the U.S. In an economic impact study released by EDC in 2013, the sports and active lifestyle industry in San Diego represented more than 1,200 business and approximately 23,000 employees. These companies had a direct economic impact of $1.35 billion and accounted for 1.3 percent of San Diego’s 2011 economyequivalent to hosting four Super Bowls every year.

Bounce Composites, an Oceanside-based company, is one of these 1,200 businesses that capitalize on San Diego’s strong SAL industry.

“First of all, we really like living here. It's pretty hard to beat it,” said James Hedgecock, founder & general manager at Bounce Composites. “On a more business-oriented note, San Diego is an amazing area for composites manufacturing as well as the sporting goods market, two industries in which Bounce is deeply invested. In addition, the proximity of Baja California's manufacturing community for the production of some products and applications cannot be ignored.”

Bounce Composites designs, engineers, and manufactures high-quality and durable composite goods for multiple industries including wind energy, automotive, aerospace, and sporting goods. Its stand up paddleboards (SUPs), produced under the brand Bounce SUP, is its largest revenue generator. Bounce SUP’s patented design allows for serious performance and usage while maintaining a minimal environmental footprint. 

Driven by startup activity, the success of San Diego’s small- and medium-sized SAL companies is critical to the region’s future, and increasing their global reach is crucial to that success. Through the MetroConnect Prize, made possible by JPMorgan Chase, companies such as Bounce Composites received $10,000 grants to assist with their next step in going global.

“The recent grant money we were awarded assisted in the implementation of outreach programs within social media websites for domestic and foreign export growth,” said Hedgecock. "Encouragingly, we are experiencing a high return on the international targets within our current marketing plan.”


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September 8, 2015

Four decades of innovative musical technology poured into millions of acoustic and electric guitars has made Taylor Guitars a leading contender in instrument manufacturing. The company has equipped world-renowned artists from Taylor Swift and Jason Mraz to Black Sabbath’s Toni Iommi with well-crafted, easy-to-play guitars. With more than 900 employees, the company produces hundreds of guitars per day in its state-of-the-art factory complexes in both El Cajon and in Tecate, Mexico. For the third consecutive year, Taylor Guitars will open its doors alongside 30 other regional manufacturers to celebrate National Manufacturing Day on October 2.

 This week we talked with Barbara Wight, CFO of Taylor Guitars, about why the company chose San Diego.

Tell us what your company does.

Established in 1974 by Bob Taylor and Kurt Listug, Taylor Guitars has evolved into one of the world’s leading manufacturers of premium acoustic and electric guitars. Renowned for blending an innovative use of modern technology with a master craftsman's attention to detail, Taylor guitars are widely considered the best sounding and easiest to play in the world. The company was a pioneer of the use of computer technology, lasers and other high-tech tools and machinery. Today, Taylor Guitars is widely recognized throughout the musical instrument industry as the visionary acoustic guitar manufacturer. Outstanding playability, flawless craftsmanship, and stunning aesthetics are just a few of the reasons that many of today’s leading musicians make Taylor their guitar of choice.

What are some advantages to being located/doing business in San Diego?

Since the company’s inception, Taylor has remained located in San Diego as it gives us the ability to attract and retain quality employees who want to live here, resulting in increased tenure and a quality pool of employees. Along with this, we are able to operate as a binational manufacturer with factories in both El Cajon and Tecate giving us a high-level of quality control over our products.

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

Deering Banjos is known throughout the world as a leader in its product class, and for good reason. Founded in the same shop as Taylor Guitars by Greg and Janet Deering 40 years ago, the company has continued to thrive in San Diego. If you turn on the TV or look in any entertainment magazine, alongside the acoustic guitar, Deering banjos are the instruments du jour of some of today’s biggest acts. 

What do you anticipate for your company in five years? What do you anticipate for San Diego?

As a company, we anticipate additional growth in size, capacity and market share. We will continue to grow our brand presence and the true ‘Taylor experience’ in additional regions in the world. We expect San Diego to continue to be a world-class location for both businesses and families.

September 4, 2015

This is part of an ongoing series on the recipients of the MetroConnect Prize, presented by JP Morgan Chase,  a grant awarded to 15 companies looking to expand into new foreign markets. Subscribe here to receive new posts every Wednesday on this topic.


“Global SaaS software revenues are forecasted to reach $106B in 2016, increasing 21 over projected 2015 spending levels.” - Louis Columbus, contributor, Forbes

According to Cisco®’s Global Cloud Index, “By 2018, more than three quarters (78 percent) of workloads will be processed by cloud data centers…22 percent will be processed by traditional data centers.” The growth of cloud-based systems over the next three to five years will be exponential, leading many companies to implement these technologies into their companies for ease of use.

One sector which could benefit from this technology is the healthcare industry, giving  hospitals the opportunity to seamlessly integrate data into the patient experience . Data management from drug treatments and lifestyle can be streamed in real-time to a doctor.

Enter VisionTree Software’s Optimal Care platform.

VisionTree was founded more than 12 years ago by its current CEO, Martin Pellinat. VisionTree is a leader in data collection, workflow integration, and cross platform applications for improved quality and efficiency of the communication, decision making, and planning processes within the healthcare system.

Pellinat and his team have worked with many of San Diego’s innovative medical centers with the VisionTree software. They have worked with the Scripps Proton Therapy Center to improve its workflow for its leading edge cancer treatment program, and UC San Diego’s health system for both research and clinical use for patient-centered outcomes.

“San Diego is known for medical, life sciences and technology innovations,” said Pellinat. “It is because of this, that VisionTree continues to attract a leading software engineering team to work at its headquarters in San Diego.”

The success of the region’s small- and medium-sized companies is critical to the region’s future, and increasing their global reach is crucial to that success. Through the MetroConnect Prize, made possible by JPMorgan Chase, companies such as VisionTree received $10,000 grants to assist with their next step in going global.

VisionTree is using the MetroConnect funds to expand its software platform to deliver an interoperable solution with all electronic health records in international markets. This integration allows the software to be used more effectively.

“VisionTree is focused on the Australia and European markets,” said Pellinat. “Certain markets are launching national cancer registries and the VTOC platform has been proven in the U.S. with its data-collection elements and workflow system (e.g. prostate, breast, lung, brain) for scalable, multi-center, cloud-based deployments in these new global markets."


 

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September 1, 2015

For 138 years, Dentons' presence in San Diego has been a vital part of business and civic life. Operating out of its downtown and La Jolla offices, Dentons’ lawyers provide comprehensive legal counsel to a broad spectrum of businesses, including startup ventures, closely held firms, publicly traded companies and multinational corporations headquartered in Southern California, the U.S. and across the globe. This week, we talked with Kurt Kicklighter about why San Diego’s innovative culture matters to Dentons.

1) Please tell us what your company does.

On July 1, 2015, Dentons US and McKenna Long & Aldridge merged, expanding Dentons’ geographic reach and strengthening our talent base in the U.S. Dentons offers clients the full range of business and dispute resolution services through approximately 3,000 lawyers and professionals, 1,100 of whom are located in the U.S., delivering integrated, multidisciplinary cross-border solutions at any one of our 80-plus locations in 50-plus countries.

Dentons is driven to provide a competitive edge in an increasingly complex and interconnected world. A top 20 firm on the Acritas 2014 Global Elite Brand Index, we are committed to challenging the status quo in delivering consistent and uncompromising quality in new and inventive ways. With a legacy of legal experience that dates back to 1742 and builds on the strengths of our foundational firms—Salans, Fraser Milner Casgrain (FMC), SNR Denton and McKenna Long & Aldridge—the Firm serves the local, regional and global needs of private and public clients.

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

Dentons is a polycentric firm with no dominant national culture or single headquarters. This approach benefits our clients as they compete in their particular industries and in global markets, providing legal talent from diverse backgrounds regardless of geography. While this polycentric approach may sound like some futuristic vision, it is happening today—in San Diego and elsewhere. Marketplaces that were out of reach only a few years ago are today eager to have San Diego usher in this new era of commerce. Witness, for example, how quickly our city’s biotech sector has blossomed in a relatively short time period. According to a recent study, nearly 450 technology and life sciences startups were founded in San Diego just last year. These companies emerge here and quickly flourish on the international scene.

3) What do you anticipate for your company in five years? What do you anticipate for San Diego?

Earlier this year, the Firm launched NextLaw Labs—a collaborative innovation platform focused on investing in, developing, and deploying new technologies to transform the practice of law and benefit our clients—and we continue to find timely, innovative and practical solutions to get a deal done or a dispute resolved.  As our clients’ business changes, we change ours as well.

San Diego’s development depends more than ever on attracting international partners to our city’s collaborative, innovative culture and bi-national economic engine, and Dentons is excited to be a part of this growth.