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The Big Picture San Diego Blog


April 2016

April 28, 2016

It’s clear that despite a healthy economy, not every part of San Diego is enjoying economic prosperity. This week, GlobeSt.com sat down with Jim Zortman, sector VP, strategic operations of Northrop Grumman and newly appointed chairman of EDC, for a chat about what he hopes to do about this issue and others. 

What are your goals in your new role as chairman of the San Diego Regional EDC?

Zortman: Over the past four years, EDC has introduced a number of important initiatives to expand our regional economy with and through a broad base of partners. For example, in partnership with the Brookings Institution and JPMorgan Chase, the “Go Global Initiative” aims to attract foreign direct investment, grow regional exports and strengthen economic ties in strategic international markets, as well as position San Diego’s unique global identity.

As chairman, I am committed to championing these initiatives, but it’s clear that despite a healthy economy, not every part of San Diego is enjoying economic prosperity. I hope to broaden our agenda to focus on economic development issues in communities that have not yet benefited from the region’s development. It is my vision that the broad-based coalition of partners that catalyzed the region’s life-sciences, technology, R&D, defense and aerospace sectors can also come together to develop job opportunities and prosperity for more San Diegans.

What do you feel are the biggest economic development challenges in the San Diego market?

Zortman: We have all heard the comment that businesses should operate “anywhere but California.”  We know it is not cheap to do business here. But it is our job as economic developers to understand and leverage our assets and competitive advantages—just as your readers often have to do as real estate professionals. California is number one in economic categories like foreign investment, venture capital and job growth; we rank first in sectors like agriculture, defense, biotechnology and life sciences; our public universities are nationally ranked and produce top-tier talent—the list goes on and on. San Diego plays an important role in each of these fields.

San Diego is home to the largest concentration of military anywhere in the world. It is the underpinning of defense sectors where we have unmatched dominance: cybersecurity, defense, communications, unmanned systems and maritime. San Diego is the epicenter of the future of biotechnology—specifically genomics. We are home to Craig Venter, who was the first person to sequence the human genome, and to Illumina, the company that can now sequence the genome in just over 24 hours for under $1,000. San Diego has more than 80 research institutions, more than any other region in the country.

Not only are we home to a diversity of thriving industries, but we are also a top-tier talent pool driving our region’s growth. Specifically, San Diego gained 72,000 degree holders in 2014 alone, more than any other major metro area in the country. Also, San Diego has the lowest turnover rate in tech and scientific R&D jobs, which is attracting the attention of technology companies across the country.

Continually, we have what talent wants: the lowest average commute time of any major metro area in the country; an influx of creative-office space as seen with iboss Cybersecurity’s space in UTC; competitive wages—ranking second average annual pay for R&D employees—and more.

And if that’s not enough, let me point out that the economy of Texas could pretty much double overnight and still not match the strength of California’s economy. In the end, dispelling myths about doing business here and telling San Diego’s story is our collective responsibility.

What do you feel are the biggest economic-development opportunities that are perhaps not being taken advantage of in the San Diego market?

Zortman: One of the biggest opportunities we have as a region is to help companies export their products and services. In 2013, San Diego ranked 18th of the 100 largest metro areas in total export value, export-supported jobs, GDP and population size. But the region was only 61st in terms of export intensity—total export value as a share of the region’s GDP. According to the Institute for International Economics, companies that export not only grow faster, but are less likely to go out of business than non-exporting companies.

World Trade Center San Diego – now housed within EDC – has introduced the MetroConnect Program to provide small- and medium-sized enterprises with resources and funding to help open new markets abroad. The Go Global Initiative and programs like MetroConnect help San Diego maximize its global competitiveness.

What else should our readers know about San Diego Regional EDC?

Zortman: The real estate industry is a key partner to EDC. Every day our team works with brokers and developers to help enable and encourage companies to grow here. Using data on the region’s industry clusters, workforce talent and network of partners, EDC is able to assist companies with expansions throughout the mega region. Some of San Diego’s recent wins include the attraction of tech companies such as Bizness Apps and Wrike.

Real estate professionals should also use the research EDC produces to better understand industry sectors poised for growth. For example, EDC recently released a study on San Diego’s software development industry. The study showed the region’s software ecosystem impacts more than 100,000 jobs in the regional economy, with an economic impact totaling $12.2 billion annually; venture-capital investment in software was up by 38 percent in 2015; and the industry has an anticipated employment growth of 18.1 percent in the next year—all signs that the region’s tech ecosystem is gaining national visibility.

 

Click here for the full story.

April 27, 2016

By Nikia Clarke, Director, World Trade Center San Diego

WTC San Diego is on the road again, with a focus on deepening channels of connectivity between global cities around trade, investment, innovation and thought leadership (as well as herring, it turns out).

I spent last week in Stockholm, Sweden, participating in a Brookings/JPMorgan Chase Global Cities Forum. San Diego joined the Global Cities Initiative (GCI) almost four years ago, led by WTC San Diego founding partners—the City of San Diego, San Diego International Airport and the Port of San Diego—and followed by more than 30 other metros. Stockholm is now joining the GCI and drafting its own internationalization strategy. Together with four other GCI representatives, I spoke on panels and participated in working groups convened by Brookings, the Stockholm Chamber of Commerce and CONNECT Sweden to share San Diego’s experience of building a data-driven trade and investment strategy backed by a regional coalition of partners.

And, as is always the case with these Brookings Metro Exchanges, it’s a wonderful opportunity to learn from our peer cities. Philadelphia’s Economy League, together with their very active WTC, just launched a regional export plan, leveraging service provider networks to reach exporting firms. In London, the Mayor’s office and London & Partners are linking with private sector multinationals to create opportunities for 800 SMEs in new markets. Minneapolis-St. Paul has built strong regional economic development infrastructure that drives significant foreign investment to their bi-city region. World Business Chicago has been leading an effort among dozens of counties to move from competition to collaboration in a metro region that is one of the country’s largest foreign investment destinations.

At the close of the forum, the Chamber—along with the Mayor, Governor, Airport Authority and other public and private sector senior leadership from the region—launched Team Stockholm to drive the effort forward. As the CEO of AstraZeneca—an English-Swedish firm that is the seventh largest pharmaceutical company in the world—spoke to the group about the importance of global connectivity, on the other side of the world, his company inked a deal with San Diego’s Human Longevity Inc. to sequence more than 500,000 genomes and analyze samples from clinical trials. Indeed, competitiveness is all about connectivity.

So how do we continue to grow this kind of connectivity here in San Diego? Turns out Stockholm is the perfect place to reflect on this question, which is why innovation economy experts, like our own Mary Walshok, have been building linkages between our two regions for decades. Stockholm and San Diego have a lot in common: we are both metro regions of 2-3 million with world-class research ecosystems, strong life sciences, telecomm and technology sectors and we happen to be two of the top three most patent intense regions in the world. It is why as you drive down the road you see big names in our region that are also big names in Sweden: Thermo Fisher, Kyocera, Trinity Biotech, Ericsson, JLabs among others.

And in both our cities, so much of the innovation ecosystem is driven by SMEs—which in both San Diego and Stockholm make up around 95 percent of all companies—and the ways in which they are able to engage with large firms and global networks. I visited a number of the institutions that incubate, accelerate and commercialize technology in the region and there is much we can learn from Stockholm.

The Karolinska Innovation Institute spins life sciences and pharmaceutical discoveries out of the university research hospital. Sting—a city-university-private sector collaboration that runs a network of incubators, accelerators and co-working spaces in the region—is launching a new digital health accelerator program that will launch firms into international markets.

EpiCentre is an innovation house founded as a temporary experiment in a downtown high rise awaiting redevelopment last year. Now it has 600 members—large tech corporates, entrepreneurs and everything in between—who run incubators, accelerators, hackathons and labs. As companies grow and scale they move through the flexible, diverse office spaces throughout the building. It will anchor plans for an expansive downtown redevelopment with hotels, restaurants and office space all linked by aerial walkways. Too cool, right?

I had the opportunity to continue these conversations with a brief stopover in London on the way home to visit co-working spaces, tech hubs and San Diego company Cubic’s new transit innovation centre. Cubic already moves 10 million people around London every day as the operator of the Underground’s oyster card payment system. But here they are working with universities, transport providers and entrepreneurs on what’s next for the ever smarter, safer cities of tomorrow? (hint: it might involve talking holograms and buying your ticket with the veins in your hand

One of WTC San Diego’s primary mandates is to grow opportunities both for local firms in overseas markets, and for foreign ones investing in our region. To this end we’ve spoken with more than 400 investors in Japan, taken a group of water tech companies to England and France and are about to select our 2016 cohort of MetroConnect firms. As we reflect on what’s next for our region in terms of boosting our global competitiveness, it is clear that international innovation networks are critical. Certainly some great lessons were taken from this trip: creating great spaces, collaborating with diverse partners and being a little wild and very flexible.

As always, at each stop we were sure to leave behind one of San Diego’s best exports: Stone Brewing Co. craft beer—this time the Bitter Chocolate Oatmeal Stout. No wonder they like us.

Cheers to Stockholm and London, and see you soon, San Diego. 

April 22, 2016
Once again 800 of the region’s executives, elected officials and community leaders joined EDC at SeaWorld San Diego for our Annual Dinner.
 
EDC’s new Chairman Jim Zortman of Northrop Grumman Aerospace Systems shared his vision for the organization; Conrad Prebys was recognized as the Herb Klein Civic Leadership honoree for his many contributions to the region and Illumina’s former CEO Jay Flatley accepted the Duane Roth Renaissance Award on behalf of the company for its life changing genomics technology. 
 
Throughout the evening, guests had the opportunity to interact with SeaWorld animals and enjoy a unique array tastes and treats spread over a large section of the park. 
 
EDC’s Annual Dinner is underwritten by Point Loma Nazarene University, with additional support from sponsors.
 
April 15, 2016

The California Competes Tax Credit is an income tax credit available to businesses that want to locate in or expand in California. Since its launch in 2014 as part of Governor Jerry Brown’s economic development initiative, the California Competes Tax Credit will award close to $380 million in credits to California companies.

On April 14, 103 companies were awarded more than $68 million in tax credits, creating close to 9,370 jobs over the next five years. In total, these companies will invest more than $1.3 billion over the next five years, aiding the state’s long term growth.  

San Diego boded especially well in this round. Eighteen San Diego companies are receiving more than $11.2 million in tax credits, ranking second among all metropolitan regions in the state. San Diego also ranked second in the amount of jobs created among all metros, with more than 1,330 jobs. Some of the companies that will be will awarded the credits include: Hunter Industries and Sentek Global, and many more. These funds will help the 18 San Diego companies invest more than $139.7 million into the community and pay more than $252.8 million in wages over the next five years.

 

April 15, 2016

Joining forces to make a binational push to promote innovation, trade and jobs within the San Diego-Tijuana Mega Region, San Diego Mayor Kevin Faulconer and Tijuana Mayor Jorge Astiazarán welcomed more than 50 high-level leaders from Brazil, Mexico, Canada and South Korea and other countries from across the globe to San Diego for the Fifth Americas Competiveness Exchange (ACE V).

Organized by the World Trade Center San Diego, U.S. Department of Commerce and the Organization of American States, ACE V – a three-day tour of San Diego – made stops at iboss, Qualcomm, UC San Diego and more. As part of the visit, the U.S. Department of Commerce and the participating countries signed a Memorandum of Cooperation (MOC) to support initiatives that promote trade and investment partnerships, stimulate job creation and eliminate barriers to commerce.

“We’re proud of the role that we’re playing in fostering innovation, collaboration and technology. It’s part of the DNA of what’s happening here in San Diego,” said San Diego Mayor Kevin Faulconer. “This is in fact part of what I think makes this region special, when we talk about the relationship that we have for investment, for our business communities, for our start-up communities. You will not find a region that collaborates better than this region.”

April 15, 2016

Over the past year, EDC has partnered with the Brookings Institute’s Bilateral Cities Exchange to refine the economic development approach between Tijuana and San Diego. In parallel, EDC’s recent engagement with the site selection industry through Explore San Diego – a tour hosted for 12 site selector consultants earlier this year – enabled our facilitation of a cross-border business attraction project that will provide jobs and investment on both sides of the border. Per terms of confidentiality, this project is being referred to as Project Scout.

During EDC’s inaugural Explore San Diego tour, we focused not only on success stories in San Diego, but highlighted companies who had set up operations on both sides of the border, including Thermo Fisher and BD. Although we frequently hear about cross-border collaboration in San Diego, we soon realized that it was a story that many outside the region – including these site selectors – hadn’t thought about; companies can easily do business on both sides of the border.

In early March, EDC received a request from an Explore San Diego attendee whose client was looking to scale manufacturing operations outside of its current high-cost pilot facility. Given the consultants’ recent exposure to the bi-national mega region, San Diego-Tijuana made the long list of 20 potential sites. In response, EDC provided data, real estate market figures and other strengths regarding our cross-border economy. Just two weeks later, a call came in that San Diego-Tijuana had made the top three, alongside North Carolina and Texas.

In a tour on behalf of Project Scout, EDC rallied the necessary business and political partners in order to put the region’s best foot forward – making the case for a cross-border operation. With partners including CaliBaja, city of San Diego, city of Tijuana, San Diego Mayor Faulconer, Tijuana EDC and UC San Diego, EDC showcased Tijuana’s dynamic manufacturing facilities. Here, the group shattered stereotypes by exposing not only the quality and efficiency of Tijuana manufacturing, but also the cross-border collaboration that makes our region so unique.

Project Scout ultimately chose to scale 80,000 square feet of manufacturing operations in San Diego-Tijuana – beating out North Carolina, Texas and other competitors. The local operation will provide jobs on both sides of the border beginning in August.

Stay tuned for more as Project Scout develops.