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Big Picture San Diego Blog

October 28, 2013
On the heels of the government shutdown, Congress’ perceived inability to work together and collaborate has become a serious issue. But if we look more closely at the San Diego’s delegation’s recent activities, we might have a different story to tell.
 
This past week, San Diego’s congressional delegation unanimously backed efforts to secure an unmanned systems test site in Southern California. Citing the region’s diverse terrain and existing aerospace stronghold, Reps. Susan A. Davis (D ), Duncan Hunter (R), Darrell Issa (R) , Scott Peters (D), and Juan Vargas (D) signed on to a support letter with the understanding that the site will help create jobs and further drive the Golden State’s economy. 
 
"Our entire delegation came together to support our defense and aerospace industries because they provide good jobs to thousands of San Diegans and groundbreaking technologies," Rep. Peters said. "This is how it's supposed to work: the private and public sectors, and leaders from both political parties coming together to support our economy and our national security." 
 
A recent study by the Association of Unmanned Vehicle Systems International found that California was poised to gain 18,161 jobs from unmanned systems - more than any other U.S. state. The industry would pump approximately $90 billion into the economy in the next decade, generating an estimated $70 million in tax revenue. 
 
“There’s no region more suitable than Southern California to be used as a UAS/UAV test site. In particular, San Diego, with its strong ties to the defense and aerospace community, is a premier location with its diverse training areas and support infrastructure already in place,” said Rep. Hunter. 
 
In the letter of support the delegation notes that San Diego already has an edge on the industry, with two of the nation’s leading UAS manufacturers based here. The region’s six universities are already taking steps to guarantee that the workforce is prepared with the technical skills to help the industry thrive. 
 
The FAA modernization and reform act of 2012 mandated the FAA to create six test sites across the country with a goal of working to integrate this technology safely into our airspace. The proposed testing site would start at the U.S./Mexico border and run to Bridgeport in Mono County to the North and to the Arizona/Nevada border to the East. As regulations do not allow testing within a 30-mile radius of installations including Lindbergh Field and McClellan-Palomar Airport, San Diego’s most densely populated areas would be excluded from the testing range. 
 
“As San Diegans, we are fortunate to have leadership that’s willing to reach across the aisle for the good of the economy and the people,” said Mark Cafferty, president and CEO of San Diego Regional Economic Development Corporation. “Our delegation recognizes that this is about more than just defense. With uses including wildfire fighting, food production and disaster surveying, unmanned systems is on course to have a strong impact on our region’s ability to be a global innovation hub.”
 
Although there are many things we may never agree on, it’s nice to know that San Diego’s congressional delegation are united when it comes to the importance of job creation in our region.
 
 
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October 21, 2013

Illustrating some of the dynamic uses for unmanned system.

Illustrating some of the dynamic uses for unmanned system. Clockwise from top left: Drone used for newspaper delivery (The Atlantic), prepping a wildfire- fighting drone for launch (The New York Times), simulation of a lifeguard/lifesaving drone (AUVSI), agricultural drone used for weed control (3dRobotics/ Diydrones.com) 

If you stopped 100 people on the street and asked them to name a technology in the past 20 years that has changed the world, it’s safe to assume that the internet would be a top choice. Yet if you ask people about the origins of the internet, many would have to pause for a second to think. In the 1950s, the internet was developed as a tool for military communication. It wasn’t until the mid-90s that the internet was adopted and commercialized for broader use. 
 
San Diego is used to seeing military innovations adopted for commercial use. In fact, many of the region’s largest and most well-known companies – including Qualcomm – were born out of military innovation. 
 
Now, a new technology is being developed for commercial use and San Diego, with its strong military history, trained talent, and diverse terrain, has a decent chance of playing a big role in something that has already began to revolutionize the world. 
 
Unmanned Systems – or drones as they’re often called – have uses ranging from agricultural production to disaster monitoring and wildfire fighting.  
 
A jobs generator 
 
Recognizing the importance of unmanned systems, the FAA has issued a call to establish six test sites across the country, with a goal of working to integrate this technology safely into our airspace.  A recent study from the Association of Unmanned Vehicle Systems International found that California was poised to gain 18,161 jobs if they created a test site- more than any other U.S. state. This does not even take into account the impact of non-aerial unmanned systems for marine and farming use, which will help create even more jobs. The industry would pump approximately $90 billion into the economy in the next decade, generating an estimated $70 million in tax revenue. 
 
In partnership with San Diego Military Advisory Council, EDC and other San Diego partners joined the CAL UAS portal. The proposed testing site would start at the U.S./Mexico border and run from Bridgeport to the North and to the Arizona/Nevada border to the East. The regulations do not allow testing within a 30-mile radius of installations including Lindbergh Field and McClellan-Palomar Airport, meaning most of San Diego’s metro airspace will not be included in testing ranges.
 
San Diego is at a significant advantage. Not only do we have one of the most diverse testing sites in the U.S., but we also have a strong private sector that would help support a testing site. Companies such as 3Drobotics, Northrop Grumman, General Atomics and 5d robotics provide a well-qualified talent pool to help the sector thrive. 
 
Maybe 10 years from now, if we ask people about a technology that has profoundly impacted society, unmanned systems will float to the top of the list. Our hope is that when it does, San Diego is thought of as a leader in this field.
 

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October 15, 2013

Economic snapshot graph

EDC’s economic snapshot shows that San Diego’s economy is gaining steam. From April 2013 to July 2013, the San Diego region added 13,000 private sector jobs. Although the metro’s unemployment rate still stands slightly above the national average, San Diego experienced one of the largest year-over-year declines in the U.S. from July 2012 to July 2013. Only four major U.S. metros – Seattle, Tampa, Detroit and Riverside - experienced a greater decline over that period.

Here’s how the numbers in the snapshot broke down:

  •  Private businesses added approximately 13,000 jobs in the quarter. Hospitality and tourism added the highest number of jobs this quarter, with 7,600. Construction industry added 4,100 jobs in the quarter, which is likely due to many major construction projects ramping up in the summer season. With the recently-approved expansion of the San Diego Convention Center (not included in these numbers), the region will add nearly 7,000 hospitality and tourism jobs and 3,000 construction jobs in a future quarter.
  •  This quarter, the snapshot took a closer look at the Sports and Active Lifestyle industry, based on a report that was recently released. With companies including Taylormade, Sector 9 and other well-known products, San Diego is a designated leader in this important sector. The report found that the industry’s economic impact is equivalent to hosting four Super Bowls annually.
  • San Diego’s foreclosure rate remained lower than the U.S. average in July2013, with only 2.31 out of every 10,000 homes foreclosed during that month
  • All major metros nationwide experienced positive growth in home prices over the quarter and the year, a symptom of the resurging US real estate market. From Q1 2013 to Q22013, home prices grew about 13.7 percent  in the San Diego region.

The quarterly snapshot reports on key economic metrics that are important to understanding the regional economy and San Diego's standing relative to other major metropolitan areas in the U.S. The snapshot only reported on data through Q2 2013. Amidst the current government shutdown, we can only hope that there’s data next quarter to produce a new snapshot.

You can find the complete snapshot here.


The economic snapshot was made possible by Chase Chase Logo
 
October 4, 2013

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Every San Diego company has a unique story to tell. That became very apparent as the region came together to celebrate MFG Day at San Diego City College on Friday. Four panelists representing a diversity of San Diego companies talked about the challenges and opportunities facing the region’s manufacturing sector, which employs more than 90,000 individuals.

Take D&K Engineering, a high-tech manufacturer.  When the entrepreneurs who created EcoATM were looking to make their idea a reality, they went to the Rancho Bernardo firm to create an e-recycling kiosk. As a result, D&K Engineering had to scale up its production and hire more employees. And they chose to do it in San Diego. “Access to talent and the border opportunities are one of the main reasons I chose to start D&K in San Diego. Besides, who wouldn’t want to live here?” said Alex Kunczynski, one of the company’s founders.

The border also adds a significant competitive advantage for local manufacturers. As Interim Mayor Todd Gloria said in his opening remarks, “this is a big deal.” San Diego and Tijuana are currently working together like never before. When asked about why Taylor Guitars chose to open up a manufacturing facility across the border in Tecate, VP of Manufacturing Chris Wellons said “We have a saying at Taylor Guitars. We say ‘We’ll we be happy we did this in 10 years.’” And happy they are. Manufacturing in Mexico, as opposed to China or somewhere else overseas, has given Taylor more control over its finished product. It’s also become more cost competitive.

Wellons alluded to the entrepreneurial spirit of another panelist. Stephan Aarstol started Tower Paddle Boards - a sports and active lifestyle company - in 2010. With a little help from ABC’s “Shark Tank,”he transformed his sales from $3,000 in 2010 to $3 million in 2013.  Although he only has four employees in San Diego, he plans on growing in the coming years, and he’s looking to do it in the region. To him, he’s not just selling a paddleboard but also exporting California culture to consumers all over the globe.

As Chris Wellons of Taylor Guitars echoed, keeping manufacturing jobs close to home really comes down to innovating the process. Taylor Guitars has more than 700 employees, with many of them working out of its El Cajon headquarters. Although customers can still rely on the same quality that made Taylor a household name when it was founded in 1974, the manufacturing process has evolved. Taylor used to carve each of its guitar necks out of an individual piece of mahogany, meaning 60 – 70 percent of the materials were wasted. In 1999, Taylor decided that process needed to change. The result was one of the greatest guitar innovations in the past 100 years.  Instead of using a one-piece neck, Taylor switched to a three-piece neck, which resulted in a 66 percent yield in materials and created a more sustainable product. This, Wellons said, was possible because of the ability to execute a vision, which he thinks is a strength of San Diego.

So what can San Diego do to continue incubating manufacturing?

The answer may be easier said than done. San Diego is fortunate enough to have a highly-educated workforce. The metro currently ranks fourth in the U.S. for Ph.D. attainment rates.  Although Ph.D.-trained workers are essential for many San Diego sectors, as the panelists noted, it’s not necessarily these types of jobs they have trouble filling, but the machinist jobs where workers require hands-on manufacturing skills.

Wellons learned these skills in his high school shop class, and so did many other highly-skilled manufacturers. Admittedly, we focus a lot of time on retaining and incubating high-tech talent, but as Interim Mayor Gloria pointed out “These jobs are important too. They provide a comfortable middle-class life.” San Diego City College provided the perfect backdrop to get this conversation going. As San Diego Community College District Trustee Peter Zschiesche noted, 98 percent of San Diego City College grads remain in San Diego. 

With the guidance of San Diego Community College District and organizations like San Diego Workforce Partnership, San Diego – and it’s nearly 2,800 manufacturers – are looking to put these grads to work.

Of course, this all starts with the conversation we had this morning. A conversation that I’d bet we’ll be happy we had in 10 years.

Please check out MFGday.com for a list of local companies that held tours today,

Media Coverage: 

KPBS, Taylor Guitars still strumming along as example of San Diego manufacturing success

U-T, S.D. county product makers open doors to public

 

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October 4, 2013

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More than 80 business and industry leaders gathered at the Challenged Athletes Foundation to mark the launch of San Diego County's Sports and Active Lifestyle Cluster Report, which quantified the impact of the cluster for the first time. In order to celebrate the industry and learn about challenges, a panel of sports innovators and experts who included John Sarkisian of SKLZ, Peter Callstrom of San Diego Workforce Partnership, and Stephan Aarstol of Tower Paddle Boards, spoke about a variety of topics related to the cluster. Opening remarks from Interim Mayor Todd Gloria and Council President Pro Tem Sherri Lightner emphasized the importance of the industry to both the region's economy and cultural identity. 

Funded by San Diego Workforce Partnership with assistance from San Diego Regional Economic Development Corporation and San Diego Sport Innovators, the study found that the economic impact of the region’s SAL cluster is equivalent to hosting four Super Bowls annually.
 
With more than 1,200 businesses representing approximately 23,000 employees, the industry’s presence on the regional economy adds $2.24 billion in economic activity annually. From 2012-2013, the employment in the sports and active lifestyle cluster outpaced that of the entire county, growing 3-5 percent in the SAL cluster, compared to 1-2 percent growth in San Diego County. Overall, the industry accounted for 1.3 percent of the region’s economy in 2011.
 
“With the release of the study, we have concrete data to talk about a growing industry that is an important part of San Diego’s story,” said Mark Cafferty, president & CEO of San Diego Regional Economic Development Corporation. “As home to the second highest concentration of sports and active lifestyle workers in the U.S., this economic driver has an important place in the region’s innovation economy.”
 
Home to miles of beaches and favorable weather, the study also concluded that San Diego’s natural assets are one of the reasons the region has excelled in forming this cluster.
 
“San Diego is every sports and active lifestyle company’s ideal location,” said Lisa Freedman, 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.”
 
As part of the workforce assessment, the study surveyed numerous local companies to determine their employment needs. With 32,407 jobs dependent upon sports, active lifestyle and recreation related activities, cultivating a strong workforce is essential to growing the industry.
 
“As a unified region, our goal is to forge partnerships with businesses, universities and government to ensure that companies continue to find the talent they need so the region can retain its share of the sports innovation industry, ” said Peter Callstrom, president and CEO of San Diego Workforce Partnership.
 
In order to continue grooming the industry for growth, the report concluded with recommendations for helping sports innovation companies thrive including supporting entrepreneurial skills and strengthening cross-border ties for manufacturing partnerships.
 
Check out the executive summary and complete study for more information. More pictures from the event can be found here
 

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September 27, 2013

The Fifth Annual SDMAC Military Impact Study was released this week, quantifying the impact of the military's boot print on the San Diego region. Although sequestration has authorized military cutbacks, the region still has a strong defense cluster, with $25 billion flowing into our economy and more than one in five jobs (22 percent) linked to military spending.  The study also illustrated how the defense sector is linked to other sector of the region's economy.

Military Impact Infographic

Media Coverage:

 

Coverage:

ABC 10 , San Diego Military Advisory Council releases Military Economic Impact Study

NBC 7, Local Economic Impact from Military Budget Cuts

KPBS, More military cutbacks will be felt in San Diego’s pocketbook

 

September 23, 2013

The expansion of the San Diego Convention Center has been front and center across the region, with everybody from sports fans to politicians expressing their views on the project.  With years of legwork done on the expansion’s behalf, the planned contiguous expansion promises to be a waterfront asset with public space as its focal point. When complete, the expanded San Diego Convention Center will create $700 million in economic impact and $13 million in additional hotel tax revenue.

Of course, keeping the Chargers in San Diego is a priority, but this is not seen as an either-or situation. San Diego can have a world-class convention center and a world-class football stadium. It would be a service to our economy and community to have both. The majority of San Diegans have worked hard to get to a place where we’re on the same page about the fate of the contiguous expansion. We need to move forward now. We need to show potential conference visitors and the rest of the world what we already know: San Diego is a great place to live and work.

For starters, we can take a look at the medical conventions hosted at the San Diego Convention Center. With six medical conventions slated for Fall 2013, the industry brings a reported $293.3 million in economic impact. Hands down, Comic-Con has the largest economic impact of any conference in San Diego. As Convention Center expansion proponents note, it is essential not only for economic impact, but also for maintaining the region’s cultural foothold. However, the Society for Neuroscience will bring 32,000 attendees and generate more than $131.9 million in economic impact. That’s nearly 75 percent of Comic-Con’s impact, with only a quarter of the number of attendees. Compounded with the region’s strong life sciences research – thanks to Sanford Burnham and others - and strong healthcare facilities, it would be hard to argue that these are not the exact type of people we want to attract to the region. Conferences are one way to get them here and we cannot delay the process any longer.

Every year, there is a plethora of conferences that San Diego cannot host simply because we do not have the capacity.  Our convention center business is already booming, but as conference organizers continuously expand, we cannot rest on our laurels any longer that our nice weather will bring people here. Yes, it helps but we need the capacity. The airport’s new Green Build just added 10 additional gates and numerous commercial opportunities. The expanded San Diego Central Library is slated to open next week. Now the convention center needs to follow suit.

Build it and they – the talent, the conferences, the investors -will come.

Now we’ll let the infographic do the rest of the talking

 

 
September 17, 2013

With more than 2,800 manufacturers spread out across San Diego County, the region is home to a diverse and growing manufacturing base which supports more than 91,000 jobs.  Yet there is a growing perception that manufacturing is on its way out, as jobs supposedly head overseas to remain cost competitive.  Every day, companies are finding ways to innovate and refine the manufacturing process and retain and bring back manufacturing jobs and it’s happening right here in our backyard.

On Oct. 4, many of these San Diego companies will open their doors to the public as part MFG Day, a national program that addresses common misperceptions about the manufacturing industry.  Participants include:

·         D&K Engineering – As the exclusive manufacturer of innovative e-recycler EcoATM, this Rancho Bernardo company also works in the medical device and 3d printing space. Register

·         Quality Control Manufacturing Inc. –  What started as a one man operation in a garage in 1978, has grown into a 95 person team for this Santee precision parts manufacturer Register

·         Taylor Guitars – Located in El Cajon, the Taylor Guitars’ factory tour takes guests through the steps of guitar construction. From wood selection to final assembly, guests will experience each process as a guitar evolves from raw wood into a finished instrument. Register

The tours will be preceded by a breakfast panel and discussion with representative from the touring companies at San Diego City College.

So why should San Diego County care about manufacturing? Here are a few reasons:

·         According to the Manufacturing Institute, every job created in the manufacturing sector supports 2.5 additional jobs

·         Manufacturing crosses all sectors – Military, tourism, and innovation- of San Diego’s traded economies; For example, the San Diego Military Advisory Council reports that the manufacturing industry is the largest business sector that provides goods and services to the military throughout San Diego County

·         The industry is more relevant than ever: According to the U.S. Census Bureau Quarterly Workforce Indicators, California's manufacturers created 51,571 new jobs in the third quarter of 2011

·         The Mega-region creates an economically competitive landscape for manufacturers—Just ask companies including 3Drobotics, Taylor Guitars, and Aqua lung

·         Small businesses are the lifeline of San Diego’s manufacturing ecosystem;  80 percent of manufacturers in San Diego and Imperial Counties have less than 10 employees

We hope to see you at Manufacturing Day, but if we don’t catch you there, you can still follow the conversation on twitter using the hashtag #MadeinSD.


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August 27, 2013

On the border of San Diego and Tijuana sits San Ysidro, the busiest land port of entry in the world. Every day, an astounding 50,000 vehicles and 25,000 pedestrians wait in line to enter the U.S. One in eight people who cross into the country daily will do so via the San Ysidro Port of Entry. And that’s only one of California’s six ports of entry.

The border provides enormous economic opportunities for the region, but wait times are impeding our ability to harness this potential. Current infrastructure needs must be addressed. According to the San Diego Metropolitan Export Initiative: Market Assessment, San Ysidro is an “infrastructural bottleneck,” with many respondents citing difficulties with border crossing as a barrier to doing business in Mexico.  Even with the recent expansion of several border crossings, today’s average wait time sits at 70 minutes, translating into more than eight million trips lost due to congestion each year. In fact, more jobs are lost in San Diego every year to border congestion than the government’s recent budget sequestration.*

A new bill is trying to speed up border wait times. SB 397, sponsored by Sen. Ben Hueso (D- San Diego), calls for the creation of an Enhanced Driver’s License (EDL), which will permit carriers to use “Ready Lanes.” The technology in these new driver licenses, which will be issued by California’s DMV—eliminates the need to manually key –in travelers information, translating into a 60 percent faster processing time.

Several Canadian border states have successfully implemented EDLs and Arizona and Texas are working on instituting similar programs for our neighbors to the south.  

Although SB 397 is only a small part of a long string of reforms that are needed to expedite border crossing, it’s a step in the right direction. The San Diego region cannot afford to lose out on the $1.3 billion in revenue and $ 42 million in wages that dissipate due to border congestion every year. The border is one of the most unique aspects about the region. Companies including 3Drobotics and Aqualung don’t shy away from the fact that this is one of the reasons they are proud to call San Diego home. Through work with the CaliBaja Bi-National Mega-Region, EDC understands the fundamental necessity of teaming with Baja California, Mexico and Imperial County to the East.

Bottom line: the border means big business for the mega region. SB 397 is one step in helping us maximize our cross-border potential.

 

Sources:  AB 17, SB 397, SB 397 Fact Sheet

*Projected impact of sequestration was 10 percent of military personal across board in San Diego; Recent SDMAC report found that the military had  311,000 direct employees in the region, SDMAC Military Impact Report 2012

 


 

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August 19, 2013
This summer, EDC participated in Connect2Careers,a program that places young adults in summer internship programs across San Diego. Funded by the City of San Diego, the program works to address San Diego’s ongoing skills gap by providing meaningful summer work experiences that prepare young adults for in-demand jobs.
 
Before he heads back to school this fall, we gave our Intern Regan Pecjak one last assignment: reflect on his internship experience. Here’s what he had to say:
 
Supervisor Daichi Pantaleon with Regan PecjakWhen I began my internship at San Diego Regional EDC at the beginning of the summer I was in a position that I feel was representative of many San Diegans; I had only a vague idea of what economic development was and had absolutely no idea how it would pan out. The past weeks at EDC have given me an intimate understanding of both and provided me with an experience that I would have never had without the Connect2Careers program. 
 
Working at EDC has given me the opportunity to learn firsthand how the region is marketed to businesses and of the various efforts to expand the region’s economy. One of the major projects at EDC during my time here as the Brookings Institute’s Metropolitan Export Initiative. The plan is meant to address the under performance of San Diego’s international exports; despite having the 17th largest metro area population, San Diego’s export production ranks 55th. Sitting in these meetings gave me an in-depth understanding of the nature of some components of the region’s economy. 
 
Sitting in meetings and honing my office skills were not the only things I did; I really enjoyed the research assignments I was given. One of my favorite assignments involved researching incentives that US cities offer businesses to expand and relocate. It helped me understand what goes into creating a successful business climate and even got me thinking about some ideas that could potentially improve our own region!
 
After seven weeks at EDC, I’m happy to report that it’s been an invaluable experience. Working downtown provided me with access to key policy makers, as well as an informal network of economic development professionals. Within EDC’s walls, my co-workers were extremely cordial and were happy to talk with me. Thanks to the San Diego Regional EDC and the Connect2Careers program, I’ve had an excellent summer.  
 
Dec. 2013 update: EDC likes to keep in touch with interns following their experience to further help them on their professional paths. We're excited to share that Regan has been accepted early to Harvard. Although he is undecided on his major, he hopes to focus on economics and mathematics, while further exploring his interest in public service. Congratulations Regan!
 
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