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Economic Development 101

March 10, 2015

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Didn't get a ticket to the sold-out Go Global San Diego Summit on March 11? You can tune in live, thanks to the UT.

Learn...

  • What Mayor Kevin Faulconer is doing to increase the region's competitiveness in order to create jobs
  •  Why San Diego must adopt a global mindset, in a keynote presented by Bruce Katz, renowned urban thought leader from the Brookings Institution
  •  Where San Diego stacks up in our ability to attract investment from overseas and export company products
  •  What Qualcomm, Ajinomoto Althea, San Diego County Regional Airport Authority, UC San Diego, and the Port of San Diego are doing to promote global business opportunities
  • How one company is planning to help other San Diego companies reach foreign markets

Tune in LIVE this Wednesday, beginning at 11:45 am on U-T. No prior sign-up required. Just head over to utsandiego.com/goglobalsd at 11:45am on Wednesday, March 11 to learn more about what 30 + San Diego organizations are doing to increase the region's global competitiveness.

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March 4, 2015

Leading up to San Diego’s Global Summit on March 11, we’ll be giving a rundown of some panelists, guest speakers and programs involved in the Summit every Wednesday.

Ajinomoto_althea_imagequote

Foreign direct investment inflows to the United States are big business. In 2012 alone, the U.S. attracted more than $160 billion in foreign direct investment, making our nation the world’s top destination for foreign direct investment. In 2011, foreign-owned companies in the U.S. were responsible for employing 5.6 million U.S. workers.

In San Diego, foreign direct investment supports more than 48,000 jobs, which pay an average of 30 percent more than industry average. Even though foreign owned firms in San Diego account for 5 percent of the region’s employment, they account for nearly 19 percent of all corporate R&D spending, 12 percent of the productivity growth, and 20 percent of the total goods exported.

The story of Althea Technologies, now known as Ajinomoto Althea, began in 1998, when Magda Marquet and Francois Ferre established Althea Technologies in San Diego and began developing plasmid kits and other related life sciences products. After 15 years of development and growth, the company was acquired by global Japanese manufacturer Ajinomoto Co. for approximately $175 million, which not only was a boon to San Diego’s economy, but also served to strengthen its ties to Tokyo and Japan.

Foreign direct investment from Japan in San Diego is a crucial part of the discussion when talking about our global competitiveness. Tokyo invests more in San Diego more than any other city, accounting for 13 percent of all foreign direct investment in San Diego. These investments bring capital, jobs and opportunities to the region and are important in supporting San Diego’s advanced industries.

Aside from explicit economic gains, these foreign ties will prove to be indispensable strategic partnerships for San Diego in the coming decades. Projections say that by 2030, 66 percent of the global middle class will be in Asia. Partnerships made in Asia today will undoubtedly pay dividends tomorrow. At the dawn of “America’s Pacific Century,” San Diego has the potential to be a national leader in the face of a changing economy.

On March 11 at San Diego’s Global Summit, Ajinomoto Althea and key leaders will launch the Go Global Trade and Investment Initiative.

The summit is SOLD OUT. You can catch the event live, starting at 11:45 am, courtesy of U-T San Diego. 


Join us as we formally launch the Go Global San Diego global competitiveness initiative on March 11. Subscribe here to receive new posts every Wednesday on this topic.

February 25, 2015

Qualcomm quote & image

There’s no better indicator for, or example of, San Diego’s global competitiveness than one of our very own Fortune 500 companies, Qualcomm.  

Qualcomm’s regional impact and global recognition offers the world insight into the broad scope and depth of San Diego’s economy. The company’s international presence adds credibility to other San Diego businesses to ensure they are globally competitive. 

Qualcomm has been a key factor in the healthy state of our region’s economy, and continues to prove itself as a globally competitive and highly innovative company.  Qualcomm contributes $4.53 billion in economic activity annually, which is the equivalent of one and a half 2012 London Olympic Games. The company’s economic footprint in the San Diego region includes almost 14,000 Qualcomm employees.  Additionally, each job created at Qualcomm supports three additional jobs locally. San Diego’s community is stronger thanks to the more than $85 million donated to local charities between 2000 and 2011.

The impact of Qualcomm is a vital component of our region’s economic growth highlighting the significance of exporting as an important component for San Diego businesses to thrive and reinforce the region as a global competitor.

Why should companies in San Diego go global?

Not only do global companies pay more and boost productivity through spillovers, global companies are able to quickly adapt with the changing national and global economy. According to a report by Brookings, “during the past five years, increased exports have been responsible for one-third of U.S. economic growth.”

Qualcomm has proved that our region is well positioned for global success. The business environment here in San Diego is bustling with companies that are highly marketable on the global scale. Qualcomm is just one of several local companies in the scientific and technical service industries, a sector that grew by 9% in our region throughout the course of 2014. In order to sustain and increase this growth, we must look beyond our borders, recognizing our ability to compete IN A global market.

On March 11 at San Diego’s Global Summit, Qualcomm and key leaders will launch the Global Trade and Investment Initiative.

The event is SOLD OUT. There will be a webinar available to those who cannot attend. Details to follow soon. 


Subscribe here to receive new posts every Wednesday on this topic.

 

February 20, 2015

Retail study coverEDC, The Jacobs Center for Neighborhood Innovation and City Councilmember Myrtle Cole's Office released a study on Thursday that revealed City Council District 4 residents face more than $1 billion in unmet retail demand,D1 study presenting an opportunity for retailers and developers in the region. The study analyzed data from the Nielsen Group to find that District 4 residents spent more than $1.9 billion on retail purchases in 2014. All sales made within the district, however, totaled only $889.6 million in the same year. This represents an unmet demand of more than a billion dollars—an apparent opportunity for investors.

"Imagine the possibilities. This could be Gaslamp East,” Councilwoman Myrtle Cole told the U-T and approximately 80 people who participated in a bus tour of the district.

To read the full report, click here.

For more information about development opportunities in District 4 and the recent bus tour, please contact Councilmember Cole's office here.

 

 

TAGS
February 18, 2015

Recently, EDC released its December Manpower Monthly Employment Report. Since then, the U.S. Bureau of Labor Statistics has released December 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 5.2 percent, San Diego’s unemployment rate ranked 12th among the 25 most populous U.S. metros.
  • From December 2013 to December 2014, San Diego's unemployment rate fell by -1.3 percentage points, which ranked 9th.
  • San Diego's total employment grew by more than 3.3 percent from December 2013 to December 2014, which ranked 3rd.
  • San Diego's employment in professional, scientific and technical services (PST) grew by 9.0 percent, the highest growth rate among major U.S. metros.
  • Manufacturing in San Diego grew by 4.1 percent from the previous year, the 3rd highest growth rate.

[Employment Chart]

The Bureau of Labor Statistics (BLS) recently released employment data for the December 2014 period for all U.S. metro areas. When looking at employment growth, San Diego was among the best in the nation. From December 2013 to December 2014, the region's employment grew by more than 3.3 percent, which ranked 3rd among the 25 most populous U.S. metros. The U.S. average growth rate was at only 2.3 percent. San Diego has consistently outpaced U.S. employment growth this year and has been one of the most competitive metros in the nation.

[Unemployment Chart]

At 5.2 percent, San Diego County’s unemployment rate fell by 1.3 points from this time last year. The unemployment rate fell 0.6 percentage points in one month, the 2nd largest drop during that period. That fall brought San Diego's rank to 9th among major U.S. metros and placed it below the U.S. overall rate of 5.4 percent.

[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. 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 9.0 percent since last December, the most out of any metro studied here. This figure was more than double the U.S. average and more than a full point more than 2nd placed Houston, which is a positive sign for the region's key traded clusters.

[MFG Chart]

We continued to see more  impressive growth in San Diego's manufacturing sector. 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 December 2013 to December 2014, manufacturing employment grew by 4.1 percent. San Diego's manufacturing employment grew at more than twice the rate of the U.S. (1.8 percent), and recorded the 3rd highest growth rate among major U.S. metros. 

We now have data for the full 2014 calendar year, which allows us to analyze non-seasonal annual average growth from calendar year to year. We covered how positive the local numbers were in detail in our most recent Manpower Monthly Employment Report, but it is important to understand San Diego's growth relative to its peers. San Diego's annual average employment growth from 2013 to 2014 ranked 9th, and rather substantially outpaced the U.S. average. Perhaps more importantly, key innovation sectors far outpaced peers and picked up even more in the latter months of the calendar year. PST services had the 2nd highest annual average growth from 2013 to 2014 at 5.7 percent, while manufacturing had the 8th highest annual average growth rate. Both key sectors far outpaced the national average. San Diego appears to be on solid economic footing heading into 2015.

EDC will be releasing the Manpower Employment Report with January 2015 data for San Diego on Friday, March 6thThank you to Manpower-SD for their ongoing support of EDC's employment trends research. Edit: Date was previously listed incorrectly as February 20th, 2015.

February 11, 2015

Leading up to San Diego’s Global Summit on March 11, we’ll be giving a rundown of some panelists, guest speakers and programs involved in the Summit every Wednesday.

JPMorgan quote & image

1,300 employees, 900,000+ consumer customers, and more than 66,000 small business clients in the San Diego region:  JPMorgan Chase’s incredible community involvement and collaboration ensures San Diego companies and organizations have the tools necessary to promote job growth and secure investment for the region.

JPMorgan Chase has been one of the key drivers behind the Global Cities Initiative. From the funding of the BEAM Kentucky Export Promotion Grant to arming local businesses and community leaders with the information they need, JPMorgan Chase successfully assists companies throughout the nation to go global.

For example, in the case of San Diego’s global trade and investment initiative, no other business has supported its successful implementation more than JPMorgan Chase. Through JPMorgan Chase’s major contributions, the global trade and investment initiative will enable San Diego companies to reach markets around the world by exporting or receiving foreign investment. In addition to providing companies access to global markets, this initiative will also provide companies with a roadmap to better understand the exporting process by  identifying organizations to work with and other important information empowering San Diego companies.

“The strategies outlined in San Diego’s global trade and investment initiative will help our region’s employers realize their export potential and strengthen our position as a hub for international investment,” said Brennon Crist, head of JPMorgan Chase’s Middle Market Commercial Banking group in San Diego. “As we invest in the future of San Diego, we hope our commitment will serve as an example of the impact that the private sector can have on local and regional economic development.”

JP Morgan Chase, EDC and other key partners will announce San Diego’s global trade and investment initiative during  San Diego’s Global Summit on March 11 (sold out).  Without the generous support from JPMorgan Chase, the execution of the initiative’s programs would not be possible.

In the coming week, EDC will announce details for a live webcast of San Diego’s Global Summit. Stay tuned to learn more about San Diego’s global trade and investment initiative.    


Join us as we formally launch San Diego's Global Summit, a global competitiveness initiative, on March 11. Subscribe here to receive new posts every Wednesday on this topic.

February 4, 2015

Leading up to San Diego’s Global Summit on March 11, we’ll be giving a rundown of some panelists, guest speakers and programs involved in the Summit every Wednesday.

UCSD Picture

From launching the region’s first biotech company in 1978 to creating companies which continue to drive the region’s innovation economy, UC San Diego elevates San Diego’s global profile. They have been ranked in the top 20 universities in the world.

“With more than $3.8 billion in total revenues, and over 650 companies launched by UC San Diego alumni, faculty and staff, UC San Diego is an economic engine that helps to drive the future of our region,” said Dr. Pradeep Khosla, chancellor at UC San Diego.

UC San Diego’s impact on the region cannot be overstated. It accounts for more than 60 percent of all bio-related degrees conferred from regional institutions. Its researchers attract more than $1 billion in funding to cure diseases and create some of the most innovative healthcare solutions. Each of these contributes a tremendous amount to San Diego’s rank nationally as one of the top biotech regions.

It doesn’t stop at the biotech industry. UC San Diego’s engineering program ranks 14th in the nation and 18th in the world. According to UC San Diego, startup companies created out of the university reported more than $31.6 billion in annual sales in 2012-2013.

How do these thousands of students from UC San Diego and the region’s institutions contribute to San Diego’s global profile?

When you look at the top 20 most populous metropolitan regions in the nation, San Diego ranks 2nd in percent of college grads with STEM degrees, 5th in percent of population with a doctorate degree or higher, and 3rd in the world in patents per million residents, San Diego stands tall as one of the premier destinations for innovative companies to locate and expand their footprint.

Businesses from around the nation and world continue to want to locate in San Diego because of the incredible talent funneled out of the region’s institutions. More than 200,000 students currently study at the region’s world-renowned institutions. These students go on to start their own businesses or work for some of the most creative and disruptive companies the world has seen.

UC San Diego, especially Dean Peter Cowhey and his staff at the School of International Relations and Pacific Studies, has been an integral partner since the beginning. It assisted in the development of the original Global San Diego Export Plan, released early 2014, and the global trade and investment plan to be released on March 11. Its students and staff assessed the region’s export market and dug deep into the region’s foreign direct investment dollars and jobs supported by foreign firms.

At San Diego’s Global Summit on March 11, Chancellor Khosla will join other community leaders to discuss San Diego’s competitiveness when attracting the smartest and most inventive individuals on the planet.

More information on March 11 is available here.

 


Join us as we formally launch San Diego's Global Summit, a global competitiveness initiative, on March 11. Subscribe here to receive new posts every Wednesday on this topic.

 

January 28, 2015

Airport Image with Quote

Businesses have come together. Research has been compiled. Organizations have marching orders. What will San Diego do in order to project its competitiveness and ensure the entire world knows San Diego is the place to live and work? For starters, we’ll make sure people can get to and from the region.

San Diego International Airport (SAN) is one of the region’s premier vehicles lifting the region’s profile and connecting its businesses and people to the globe. With flights to more than eight nonstop international destinations, such as Tokyo through Japan Airlines (JAL) and London through British Airways, San Diego businesses have access to virtually any market around the globe.

The airport has been strategic about its global work. It’s no coincidence that San Diego’s two largest sources of foreign direct investment* are Japan and England, also the location of the region’s two direct intercontinental flights.

How else does the airport increase the region’s global profile and competitiveness?

In 2012 alone, San Diego International Airport created $9.2 billion in annual economic activity and supported nearly 89,750 jobs in the San Diego region. Additionally, SAN served a record 18.7 million passengers during 2014, the highest total seen since 2007.

The airport is a travelers’ first impression of the region as well as their last thoughts. With the newly-completed Terminal 2 “Green Build” expansion, travelers coming through the airport experience the best San Diego has to offer. When your regional airport includes one of the nation's fastest growing breweries and is infused with local cuisine, visitors coming to San Diego understand why so many people want to work and live in the metro region.

As the U.S.’ closest major airport to a downtown urban core, it makes sense that innovative technologies and solutions easily permeate into the daily activity at SAN. As the busiest single runway in the U.S., San Diego has adapted and implemented new and innovative technologies to improve efficiency and ensure reliability as planes arrive and depart from the airport. In 2012, JAL was the first airline to debut the sleek, innovative 787 Dreamliner aircraft.

As Bowens adds, “With the advent of new aircraft models better suited to San Diego’s unique environment, coupled with a new regional export strategy, San Diego is poised to further expand its global reach.”

At San Diego’s Global Summit on March 11, Thella Bowens, president/CEO of the San Diego County Regional Airport Authority, will join other community leaders to discuss San Diego’s ability to compete on the global runway.

More information on March 11 is available here.

Next week: San Diego is not only home to one of the best universities in the nation, but one of the top 20 universities in the world. So how do we leverage these strengths of having one of the world’s most innovative universities in our global competitiveness plan? More on that, next week.

*Based on jobs in San Diego’s MSA in Foreign-owned establishments


Join us as we formally launch San Diego's Global Summit, a global competitiveness initiative, on March 11. Subscribe here to receive new posts every Wednesday on this topic.

January 23, 2015

Download a printable version

"San Diego’s economic potential was really on display in 2014. We saw our traded sectors really drive huge employment gains throughout the year, providing many good-paying jobs to the previously unemployed."
Phil Blair, President and CEO
Manpower San Diego


[Highlights]

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.

The California Employment Development Department (EDD) released statewide county employment data today for the December 2014 period. As expected, San Diego County rounded out the year with more outstanding job growth. Note that December data allows us to look at annual averages, which is simply the average of all twelve months of data in a calendar year. This allows us to make statements about total job growth from one calendar year to another, without specifying a certain month. This report will look mostly at changes from December 2013 to December 2014, as it does every month, but will also discuss annual averages where relevant.

Unemployment rate will likely dominate much of the story this month, since the region experienced such a dramatic decline and finally fell back below the U.S. average. San Diego County’s unemployment rate fell to 5.2 percent in December, 0.6 points lower than November. The unemployment rate in the region was 1.5 points below California’s 6.7 percent rate and now 0.2 points below the U.S. average of 5.4 percent.

[Total Chart]

While a declining unemployment rate is certainly a positive sign, the rate fell in large part because of an above average drop in the labor force. Declines in the labor force are often explained by temporary seasonal workers, retirees and students exiting the labor force. However, 16,100 less in the labor force is above average even for the November-December. This could in part be explained by the sectors where the region experienced seasonal job loss, like tourism-related sectors, construction and public education. It could also be due to a correction, since the labor force grew faster than usual in October and November. Regardless, the number is high but not too negative, since there are still 28,100 more participants than December 2013 and 19,400 less unemployed—all amid high job growth.

San Diego County employers added only 600 jobs from November to December, but a total of 44,500 jobs since December 2013. This equals a job growth rate of 3.3 percent, which eclipsed the U.S. total employment growth rate over the same period.

[Unemployment Chart]

As noted in previous releases, most economists projected the region’s annual average employment to grow by roughly 2.0 to 2.5 percent from 2013 to 2014, or approximately 25,000 to 30,000 jobs. Average annual 2014 figures exceeded those estimates and grew by 2.6 percent or 34,025 jobs, with accelerated growth coming in the later months of the year—a good sign as we head into 2015.

Job growth in December continued to be fueled by our private sector. San Diego County private businesses added 1,200 jobs in December and 42,000 since December 2013. When looking at annual averages, we see that the private sector added 31,867 jobs from 2013 to 2014, a 2.9 percent growth rate. Private sector jobs accounted for 93.7 percent of average annual growth from 2013 to 2014.

[PST Chart]

Construction and manufacturing industries experienced outstanding job growth in 2014. From December 2013 to December 2014, the construction industry added 2,400 jobs—a 3.7 percent growth rate. Over that same period, manufacturers added 3,900 jobs and grew by 4.1 percent. When looking at annual averages, construction was the highest growth industry and grew by 8.6 percent from 2013 to 2014. Growth in the industry slowed later in the year, but remained well-above overall employment growth.

Innovation sectors continued to show high job growth. The professional, scientific and technical services (PST) sector grew by 9.0 percent from December 2013 to December 2014. This sector represents many of our innovation employers. More specifically, scientific research and development services, which represents many cleantech and life science companies, grew by 5.2 percent since last December. Both were among the highest growing industries in annual average figures as well.

[Growth Chart]

With December data in, we now know that 2014 was truly an outstanding year for job growth in the region. San Diego’s key traded industries led the way and the region outpaced what many anticipated at the outset of the year. When looking ahead to 2015, we see many positive signs. Year-over-year employment growth increased as the year progressed, with figures exceeding the annual average in the later months. This trend held among our key traded sectors as well, particularly in PST services and manufacturing—sectors that generally pay above average wages. We foresee many of the same possible obstacles in 2015, such as looming federal budget sequestration and rising interest rates. Regardless, San Diego enters the year on solid footing.

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.

January 21, 2015

Leading up to San Diego’s Global Summit on March 11, we’ll be giving a rundown of some panelists, guest speakers and programs involved in the Summit every Wednesday.

San Diego quote graphic

With new and stable city leadership, sustained recovery from the Great Recession, and a balanced city budget, San Diego is poised for future and sustained growth.

San Diego’s ability to maintain long-term economic growth and job creation will depend on its ability to attract additional investment and promote exports in the region’s key  industries.

Have no fear; San Diego’s leaders are prepared to do just that.

San Diego’s participation in the Global Cities Initiative (GCI) began in 2012 when the Brookings Institution selected San Diego as one of eight metro areas to participate in the Metropolitan Export Exchange program whose goal is to help regional leaders create and implement strategic action plans to increase exports. This effort culminated locally in the release of the Global San Diego Export Plan in early 2014 and the formation of the Global Competitiveness Council to champion international efforts.

The initial plan revealed some stark facts about San Diego’s position in the global economy. San Diego is the 17th largest metro by GDP and population in the U.S. but it ranks 49th in the US in terms of the percentage of jobs in foreign-owned firms and 61st in terms of export intensity. However, it also gave us an opportunity to change things.

Immediately following the release of the Export Plan, San Diego was selected as one of six cities to participate in a new pilot GCI program, the Metropolitan Foreign Investment Initiative. What started as a program focusing on educating leaders about the benefits of foreign direct investment (FDI) and helping regions create policies and programs to attract additional FDI evolved into cities actually creating a global trade and investment plan – which marries the action plans of increasing exports and attracting FDI.

Foreign direct investment may seem like an elusive term, but it can be defined as when a foreign entity invests in a domestic organization either by locating part of its business here or by infusing capital or buying a domestic business. The benefits of increasing exports and attracting FDI are key to San Diego’s future and sustained growth.  Global companies – those that export or receive foreign direct investment –  pay their employees higher wages, invest more in R&D, and increase the global exchange of ideas; all important and relevant if San Diego wants to compete in the international marketplace.

At San Diego’s Global Summit on March 11, EDC and its partners will release the region’s Global Trade and Investment Plan, a culmination of research, action plans, and programs which aim to increase the amount of foreign investment into the region and assist companies in the region in their effort to go global.

More information on March 11 is available here.

Next week, we’ll take a look at a regional asset that contributes more than $10 billion in economic activity and connects San Diego’s businesses and people to the globe. In regards to San Diego’s position in the global economy, there’s no place to go but up. 


Join us as we formally launch San Diego's Global Summit, a global competitiveness initiative, on March 11. Subscribe here to receive new posts every Wednesday on this topic.