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The Big Picture San Diego Blog


November 2015

November 23, 2015

This week, EDC talked with Jay Scovie, director of Corporate Communications and Education at Kyocera International, Inc. The company – with its North American headquarters in San Diego – manufactures high-tech products for use by semiconductor companies, among others. In just under five decades, the company’s North American operations have expanded to more than 4,000 employees dedicated to the development of innovative products.

1) Please tell us what your company does.

Kyocera was founded in Japan in 1959 — our name comes from “Kyoto” and “Ceramic.”  We serve many diverse high-tech markets, including office document equipment, telecom equipment, solar energy, and engineered components, which are used in electronic, medical, industrial and automotive applications. Much of our work is tied to the semiconductor industry. In 1971, we became the first Japanese company with manufacturing operations in the State of California. We have manufactured ceramic semiconductor packages in San Diego for 44 years. Our telecom equipment business came to the U.S. in 2000 when we acquired Qualcomm’s wireless phone business.  And today, many leading institutions in San Diego (and worldwide) generate renewable power using Kyocera’s solar modules, which are based on silicon cells, a type of semiconductor.  It sounds trendy now, but Kyocera started its solar business in 1975, making us one of the early solar pioneers.

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

My short list would begin with “best climate on Earth,” which makes San Diego ideal for events and tourism. I’ve never lived in another city where you could enjoy pristine beaches, desert, mountains and snow, all in the same day.  From a business standpoint, San Diego has an entrepreneurial culture, globally-renowned universities, Pacific Rim gateway status, and of course, U.S./Mexico manufacturing and trade. We are a global hub for wireless and biotech, with legendary research institutes like Salk, Scripps, Venter, Sanford Burnham Prebys, and yes, the Zoo and SeaWorld. We have unique technology incubators like Biocom and Connect. These all make San Diego “the place” for great minds to meet, with unique meeting opportunities — like the Kyoto Prize Symposium.  Certainly, a lot of people moved to San Diego for the weather. That’s no surprise, but the weather is really just a bonus.

 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.

Can you really pick one favorite?  Ballast Point would have to merge with Rubio’s.  Nobody has a crystal ball, but if you ask this question in a year I think we’ll all be saying it’s Qualcomm — again. They are constantly reinventing, and their current restructuring is going to be pivotal. It’s easy to envision Qualcomm emerging leaner, more focused, and ready to establish new paradigms for the global communications industry — again.

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

Globalization will continue, and companies with a global network for R&D, supply, manufacturing and marketing will fare best.  That should be good for Kyocera. The forces shaping our global economy generally align to create new markets for Kyocera’s core products and technologies. Our founder, Dr. Kazuo Inamori, has always considered it impractical to make long-term business plans – even five-year plans – due to the pace of change in technology. Instead, we focus on accumulating small results daily, making today better than tomorrow, and tomorrow better than today. We are very fortunate that our advanced materials have such broad application in the fields of electronics and industry, in many of the most innovative new components, devices and equipment. This gives us potential to improve the lives of millions of people in the areas of information processing, communications, renewable energy, medical technologies, and automotive components. What do I anticipate in five years?  Kyocera will still be thriving. The company will still have North American headquarters in San Diego. And I expect to be here, too, although if it’s lunchtime… I may be at Rubio’s.

Kyocera Corporate Profile from CC&E on Vimeo.

 

November 20, 2015

Phil Blair

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“San Diego’s economy is continuing to grow, despite the forthcoming headlines about the seasonal rise in the unemployment rate. Most importantly, the unemployment rate is a full percentage point lower than it was a year ago, our labor force numbers are showing signs of confidence, and the region has added more than 40,000 jobs since last October.”
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 October 2015 period. This month’s data shows that after another a weak U.S. jobs report released earlier this month, San Diego showed some strong signs of growth, despite a rising unemployment rate.

The unemployment rate rose to 5.0 percent in October, up 0.4 points from September. The rate is still 1.0 points lower than the previous year, but now exceeds the U.S. rate of 4.8 percent. The California average rate also rose to 5.7, and San Diego remained lower than the state average.

San Diego’s rate rose both due to a small seasonal spike in persons who identified as unemployed, as well as a rise in the labor force. Employment also grew steadily over that period, but was offset by those who joined the labor force not finding jobs immediately. Oftentimes, new job seekers take several months to find employment. If larger numbers are truly joining the labor force due to confidence in the labor market, this could potentially explain the rise in unemployment in spite of solid job growth. This was compounded by the tourism industry experiencing a larger than normal seasonal decline, though large October declines are typical for the industry.

Unemployment Rate

Despite this small seasonal up-tick in the unemployment rate, the non-seasonal figures remained positive. There are still 15,700 fewer unemployed than there were a year ago—a 16.7 percent decline. Meanwhile, the labor force is up by 16,600, which may indicate growing signs of confidence in the labor market.

The region’s economy failed to reach the 3.0 percent annual growth figure for the fourth time in 2015, but still remained very close at 2.9 percent. San Diego’s total nonfarm employment grew by 40,200 jobs from October 2014 to October 2015. San Diego’s growth rate was again much higher than the 1.9 percent national rate. The San Diego region is still 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 continued to drive the economy, as private employment drove 91.3 percent of all employment growth. The total private sector grew by 3.2 percent, out-pacing the private U.S. growth rate of 2.2 percent.

Professional, Scientific, and Technical (PST) services, which is strongly associated with the region’s innovation economy, grew by 7.0 percent and was one of the highest growth industries in the region. PST services accounted for more than one quarter of all private annual job growth in San Diego. The national PST sector grew by only 3.6 percent. Scientific research and development services, a subsector of PST that represents many cleantech and life science companies, showed solid growth at 4.6 percent.

Growth in goods-producing industries continued to be a bright spot in October, accounting for 13.6 percent of all private job growth. From October 2014 to October 2015, the manufacturing industry added 1,600 jobs. The ship and boat building industry continued to grow at an outstanding rate of 11.9 percent. Meanwhile, the construction industry added 3,500 jobs and grew by 5.3 percent. While the growth in these sectors is a bit slower than recent months, they are still overall exceeding the regional and national averages, and remain key drivers in the region’s economy.

YoY

Other key drivers for growth included the region’s healthcare sector, which added 8,900 jobs and accounted for 24.3 percent of the region’s private job growth. While tourism experienced a major seasonal hit, losing 4,300 jobs from last month, the industry added 5,200 jobs overall since last October. The annual growth number is slower than recent months, but the industry still contributed to more than 14 percent of the region’s annual job growth.

While the October jobs numbers for San Diego may not be as stellar as we’ve seen in recent months, the growth figures are still very positive. The region is far outpacing the state and national averages in terms of employment growth. More importantly, when we look at the region’s key economic drivers, the growth figures are outstanding. High wage industries like PST services, healthcare, and construction are driving employment growth as we enter the final quarter 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.

 

November 18, 2015

In an effort to cement San Diego’s reputation as a world class innovation hub and help SMEs expand their global reach, Mayor Kevin L. Faulconer, San Diego Regional EDC and JPMorgan Chase & Co. awarded the MetroConnect Grand Prize to San Diego-based genomics startup Cypher Genomics. The Grand Prize winner was voted on by an audience of more than 100 people at the MetroConnect PitchFest. 

Mayor Kevin L. Faulconer said, “San Diego’s world-class economy grows from local ideas, startups and businesses that sprout into global companies. I’m proud to host MetroConnect, which not only helps strengthen our overall economy at its roots, but fosters and supports startups like Cypher Genomics at the local level. I hope that Cypher Genomics will continue captivate investment abroad in the same way that they’ve found success here at home. ”

Ashley Van Zeeland, co-founder & CEO, Cypher Genomics said, “Cypher is grateful to win the MetroConnect Grand Prize and to participate in the vibrant and innovative San Diego entrepreneurial community. This award will help us build collaborations around the globe with countries who can use our genome interpretation technology to uncover the genetic causes of rare diseases and cancer, which can inform new therapeutics and improve healthcare around the world.”

Mayor Kevin L. Faulconer said, “San Diego’s world-class economy grows from local ideas, startups and businesses that sprout into global companies. I’m proud to host MetroConnect, which not only helps strengthen our overall economy at its roots, but fosters and supports startups like Cypher Genomics at the local level. I hope that Cypher Genomics will continue captivate investment abroad in the same way that they’ve found success here at home. ”

Pharmaceutical manufacturer IriSys also took home the runner-up prize.

Brennon Crist, head of JPMorgan Chase’s Middle Market Commercial Banking Group in San Diego said, “JPMorgan Chase is delighted to recognize all of these outstanding San Diego businesses that have thoroughly embraced the region’s go-global vision. We hope the MetroConnect Prize Program will enable Cypher Genomics and IriSys to continue advancing their global strategy by connecting with potential customers in target international markets. Over time, this outreach can be a win not only for these companies, but for economic growth and job creation for the region.

Nikia Clarke, direct of World Trade Center San Diego said, “MetroConnect targets small and medium sized businesses like Cypher and Irisys because they are really the drivers of the regional economy. The more they export their products and technology, the more connected, competitive, and resilient San Diego becomes.”

Managed by San Diego Regional EDC, and presented by JPMorgan Chase, the MetroConnect Grand Prize offers $50,000 – $35,000 for the winner and $15,000 for the runner-up – to further aid these companies in foreign market expansion. In June, 15 San Diego companies were selected as finalists for the MetroConnect prize, and given $10,000 to pursue strategies to export in foreign markets. Over the course of four months, the 15 companies demonstrated their ability to export to foreign markets. A panel of judges consisting of representatives from  Biocom, CONNECT, Qualcomm Ventures, Quantum Designs, San Diego Regional EDC, Tech San Diego and Wireless Life Sciences Alliance reviewed companies’ accomplishments and goals as a means of selecting the top four finalists to present at the PitchFest: Applied Membranes, Aventyn, Cypher Genomics and IriSys.

A spin-out of the Scripps Research Institute, San Diego-based Cypher Genomics is a 13 person startup that’s revolutionizing the way we understand and deliver personalized healthcare. Through its technology, Cypher Genomics is able to rapidly sequence the human genome, enabling scientists and medical professionals to find individualized therapies to combat rare diseases. With the MetroConnect Prize, Cypher was able to partner with Genome England on its large-scale study to sequence 100,000 human genomes. 

With the $35,000 Grand Prize, Cypher will be exploring additional foreign markets, such as Saudi Arabia and Sweden, that are investing in population-scale genomics.  Because of this foreign activity, Cypher is able to boost product innovation, translating into further job creation and capital investment in the San Diego market.

Global engagement is essential if San Diego wants to catalyze its economy and workforce. The benefits of companies going global and engaging foreign markets are well-documented. According to the Brookings Institution, companies that are global pay their employees higher wages, are less likely to go out of business and spur more efficient development of technology and R&D.

November 9, 2015

This week we sat down with Kurt Chilcott, president and CEO of CDC Small Business Finance. Headquartered in San Diego, the nonprofit serves the financing needs of small businesses in California, Arizona and Nevada. CDC offers fixed-rate, low down-payment loans to promote economic development and business expansion. Since 1978, the organization has helped provide 174,000 jobs throughout the country.

 

1) Tell us what CDC Small Business Finance does.

Our roots go back nearly 40 years when a seasoned businessman with a passion for community development – Art Goodman – launched CDC Small Business Finance. In many respects, Art, along with the old Bank of Commerce, pioneered Small Business Administration (SBA) lending in San Diego and beyond. They fine-tuned a loan production process that made SBA lending attractive to traditional banks and set the stage for the development of SBA financing for small businesses. Today, CDC offers financing to startups, as well as more established businesses. Our financing capabilities range from $50,000 to over $20 million. The capital is the means to an end: job creation and economic development in the communities we serve throughout California, Arizona and Nevada. We are the nation’s largest SBA-504 program lender (loans used to buy commercial real estate), as well as the largest SBA Community Advantage lender. And we continue to innovate within the small business finance space, a huge asset for San Diego.

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

San Diego has always been small-business centric, which lines up perfectly with CDC’s mission to help small businesses grow and create jobs.  Small business by its nature is entrepreneurial and so are we. We’re constantly developing better ways to help entrepreneurs pursue their small business dreams via access to capital. Our own entrepreneurial spirit and belief in the power of economic development motivated us to put down our corporate anchor in Liberty Station in 2004 before any of the new development became reality. It was a bold move at the time, but we feel good about being a corporate pioneer in one of the city’s more successful revitalization areas.

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.

Manufacturers are among the most dynamic small businesses because they comprise a strong industry that keeps dollars and jobs in the San Diego economy.  A couple of examples that we have helped grow are Stone Brewing Co. and Steico Industries. Stone Brewing really took off when it built its new San Marcos production facility which we’re proud to have financed. And Steico Industries, which manufactures precision components for aerospace and medical industries, created an entire manufacturing village, buying multiple buildings in the same business park with the help of SBA financing.

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

We envision a good deal of regional innovation and diversification, all in pursuit of developing and delivering the best low-cost, easy-to-access loan products and services to small businesses. Their success is the catalyst for job creation in San Diego.  The small business landscape is changing dramatically for San Diego, with the amount of available capital growing and coming from a variety of sources, the newest one being online lenders. Collaboration has been the hallmark of the San Diego business community and that should continue, as it helps us compete effectively against other regions. Our challenge going forward is to create new business in a variety of industries that spawn quality, high-paying jobs.

November 3, 2015

Recently, EDC released its September Manpower Monthly Employment Report. Since then, the U.S. Bureau of Labor Statistics has released September employment data on all U.S. metros, which allows us to analyze some key indicators across geographies. Click on images to enlarge in a new window/tab.

HIGHLIGHTS

  • At 4.6 percent, San Diego’s unemployment rate ranked 9th among the 25 most populous U.S. metros.
  • From September 2014 to September 2015, San Diego's unemployment rate fell by -1.5 percentage points, which ranked 4th.
  • San Diego's total employment grew by 3.5 percent from September 2014 to September 2015, which ranked 2nd.
  • San Diego's employment in professional, scientific and technical services (PST) grew by 7.4 percentwhich ranked 2nd.
  • Manufacturing in San Diego grew by 2.6 percent from the previous year, the 4th highest growth rate.

[Unmployment Chart]

The Bureau of Labor Statistics (BLS) recently released employment data for the September 2015 period for all U.S. metro areas. At 4.6 percent, San Diego County’s unemployment rate fell by 1.5 points from this time last year. This was the 4th largest drop in the nation, among the 25 most populous U.S. metros, and the three metros with larger drops have the three highest unemployment rates. That fall put San Diego's rank at 9th among major U.S. metros and it remained below the U.S. overall rate of 4.9 percent.  

[Employment Chart]

When looking at employment growth, San Diego outpaced most of the nation. From September 2014 to September 2015, the region's employment grew by 3.5 percent, which ranked 2nd among the 25 most populous U.S. metros. The U.S. average growth rate was at only 1.9 percent. Growth has slowed substantially across the U.S. in the past few months, but San Diego has consistently outpaced the national employment growth this year and has been among the top competitive metros in the nation.

[PST Chart]

San Diego's innovation economy is largely driving the region's growth. The region is outpacing all other major metros in professional, scientific and technical services (PST) growth except San Francisco. PST is a sector of the economy very heavily associated with the region's innovation clusters. Much of the companies and employment in clusters like biotechnology, biomedical products, cleantech and information technology fall within the PST sector. Employment in the region's PST sector grew by 7.4 percent since last September, the 2nd most out of any metro shown here. This figure was double the U.S. average and far ahead of other top tech markets like Seattle, Boston, and New York, which is a positive sign for the state and region's key traded clusters.

[MFG Chart]

San Diego's manufacturing sector also led most of the nation. Manufacturing is another key industry for growth in the region, not only because manufacturing jobs are accessible and pay well, but also because certain manufacturing subsectors are critical to the region's innovation clusters. From September 2014 to September 2015, manufacturing employment grew by 2.6 percent. San Diego's manufacturing employment growth was more than triple the U.S. rate of 0.7 percent. The region recorded the 4th highest growth rate among major U.S. metros. Only Detroit, Riverside, and Portland showed stronger growth than San Diego.

So while many key peer metros and the nation as a whole show signs of slower growth, San Diego's economy continues to buck that trend. More importantly, critical sectors like PST and manufacturing are not only showing signs of growth, they're outpacing nearly all of the region's key peers.

EDC will be releasing the Manpower Employment Report with October 2015 data for San Diego on Friday, November 20thThank you to Manpower-SD for their ongoing support of EDC's employment trends research.