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The Big Picture San Diego Blog


Economic Drivers

March 29, 2018

By Jesse Gipe, senior economic development manager

Across San Diego in the coming months, you may see a drone mapping a fire in real time, delivering a snack from your favorite fast food chain to your doorstep, dropping off a package in your neighbor’s front yard, transforming regional fireworks shows into digital storytelling platforms, or delivering medical samples to a lab reducing patient wait time in local ERs. This is all because of unique regional collaboration with the Federal Aviation Administration (FAA).

In 2010, EDC, in partnership with SDMAC and other institutions, assessed our regional defense industry to better understand what facets of our defense ecosystem were most resilient to decline even as the conflicts in Iraq and Afghanistan drew down. Drones were identified as one of the major technology areas in which the region had unique expertise and would continue to be acquired by the Department of Defense. Subsequently, EDC has worked on a variety of initiatives to support the development of this evolving industry.

By 2022, the FAA estimates that 451,800 commercial drones – up from just over 100,000 in 2017 – will be flying across our skies performing a wide variety of unique tasks that will change our day to day lives. This growth is being driven by companies already solving problems like critical infrastructure inspection, incident response, and real-time fire management. In addition to very serious use cases, drones are now transforming Olympic Opening Ceremonies, delivering medical supplies to those in need, and acting as valuable sensor nodes for smart city infrastructure. With so many exciting use cases, you may wonder why we don’t see more drones flown by companies as opposed to your 14-year-old neighbor across the street.

The reality is that the U.S. airspace is a complex web of overlapping operations that remains one of the statistically safest things you can do. The FAA, who has the responsibility of adjusting rules to allow drones in the national airspace, is laser-focused on safety. With this, the FAA is also very conscious of the opportunity that drones present for all types of industry and use cases.

To expedite industry demand, the FAA and Department of Transportation launched a new program in November 2017 called the Unmanned Aircraft Systems Integrated Pilot Program (IPP). This project asked local and state governments to submit a detailed application in partnership with industry outlining how they could partner to demonstrate a variety of technologies critical for flying safely in and around people in more urban and suburban environments.

The City of San Diego offices of homeland security and economic development, supported by EDC, put together a competitive application in response to IPP. The application was supported by academic, government, and nonprofit partners including the Port of San Diego, City of Chula Vista, UC San Diego Health, Governors Military Council, Governor’s Office of Business and Economic Development, Palomar Community College, Coleman University, and AUVSI. Just as importantly, the application included corporate support from Qualcomm, AT&T, UBER, Intel, GE, Matternet, AirMap, CAPE, and others.  These companies each have tremendous technical experience in the underlying fields essential to the development of the drone industry and have proposed a series of truly Life. Changing. use cases.

With the application submitted, San Diego alongside the other 149 applicants from across the country are waiting to hear from the FAA. Stay tuned to find who will be among the final 10 selected to move forward with IPP in May 2018.

 

March 23, 2018

Each month the California Employment Development Department (EDD) releases industry data for the prior month. This edition of San Diego’s Economic Pulse covers February 2018 data, including unemployment, new business establishments, and job postings.
 
Highlights include:
  • The region’s unemployment rate was 3.5 percent in February, down 0.1 percentage points from last month, and 0.7 percentage points lower than a year ago.
  • Most jurisdictions saw an increase in the unemployment rate from the month prior. However, five did see a small decrease, while one remained unchanged. 
  • The labor force grew again after two months of consecutive declines, adding 11,700 workers during the month. The labor force is now up 28,300 compared to a year ago.
  • Year-over-year, wholesale trade growth outpaced all other key sectors, up 9.4 percent.
 
Read the full Economic Pulse here.
March 5, 2018

This op-ed was first published in the San Diego Union-Tribune, authored by EDC's Mark Cafferty and Biocom's Joe Panetta.

Largely due to its recent marketing campaign, Qualcomm is recognized by San Diegans as the company that puts the “smart” in our smartphones. But behind the billboards, there is a deeper story about how this homegrown San Diego company became the world’s largest smartphone chipmaker while redefining corporate citizenship and putting our region on the map as a tech and life sciences powerhouse.

Qualcomm is the quintessential San Diego story, but to understand its true impact you need to understand its origin: In 1966, Irwin Jacobs came to San Diego to take a job at UC San Diego. Two years later, he founded Linkabit — a telecom company specializing in government contracts — that served as a precursor to Qualcomm. In 1985, Qualcomm was officially founded by five individuals in Jacobs’ La Jolla home.
 
Fast forward more than 32 years, and Qualcomm is San Diego’s largest publicly traded company, employing nearly 13,000 locally. As a global company, it has offices on nearly every continent, yet its headquarters has remained in San Diego.
 
A recent economic impact analysis conducted by San Diego Regional EDC found that Qualcomm added $4.9 billion in economic activity to the San Diego region in 2017 alone — the equivalent of hosting 35 San Diego Comic-Cons. Additionally, every job at Qualcomm supports an additional 1.8 jobs in the San Diego region.
 
Qualcomm has led by example, with its founder, leaders, employees and alumni creating new companies, teaching at our schools, hiring our local population, advocating for positive public policy steps, and accelerating the growth of San Diego’s innovation economy.
 
While Qualcomm is a wireless company, its focus on connected devices and the internet of things has impacted nearly every high tech industry, from healthcare to smart cities. Qualcomm/Linkabit alumni have gone on to start or sell their inventions to major companies including Viasat, Leap Wireless, Kyocera, Motorola, Ericsson and more. Qualcomm Ventures has proved a vital backer of San Diego startups including Edico Genome and Brain Corp., and is a key player in the rise of telemedicine. Today, San Diego stands as the third most patent-intense region in the U.S., not only due to the intellectual property the chipmaker has developed and the innovation it has catalyzed throughout the region but also due to its relentless advocacy for intellectual property rights for all industries.
 
Its work in the San Diego community starts long before one steps foot on Qualcomm’s campus. Spend one day at its Thinkabit Lab™ — a part art studio, part engineering lab that is introducing middle school students to careers in technology — and learn how it has transformed the way students from all backgrounds think about the world of work. The successful program has been expanded to schools in Chula Vista, San Diego and Vista.
 
Everyone has a story about how Qualcomm has affected our community. In fact, we kicked off the #QualCOMMUNITY campaign with the support of Mayor Kevin Faulconer, the San Diego Regional Chamber of Commerce and other business leaders so San Diegans can share their story about the company’s impact. From the Old Globe to the San Diego Symphony to the new Central Library to our world-class universities, Qualcomm’s impact can be seen and felt across our region.
 
Qualcomm has given San Diego an opportunity to reinvent itself. It has been an anchor as we have transformed from a military town to an innovation hub and one of the top biotech clusters in the world. Qualcommers go to bat for San Diego. As employees, they define the next frontier of invention. As residents, they spend money at our businesses and enliven our neighborhoods; and as philanthropists, they donate millions to our universities and causes.
 
While the specifics around the deal are in flux, most everyone is aware that the homegrown wireless giant has been in conversations with Broadcom, a competing telecommunications company, about a potential merger.
 
Shareholders and regulators will decide what happens next, but outside the boardroom, this culture of innovation, collaboration, and community will always remain core to the San Diego story.
 
It’s a story that many companies and people, in San Diego and beyond, can learn a lot from.
 
Cafferty is president & CEO of San Diego Regional Economic Development Corporation. Panetta is president & CEO of Biocom.
February 28, 2018

By Kate Gallagher, economic development coordinator 

With the largest concentration of military assets in the world and the largest federal military workforce in the country, it’s no surprise that San Diego has the 3rd highest population of veterans in the United States.

Each year, more than 20,000 Sailors and Marines stationed in San Diego leave military service, a third of whom are expected to stay in the San Diego community. Individuals transitioning to civilian life are trained, team oriented, and hardworking, but can also face challenges adjusting to life outside the military structure and regime. According to the National Veterans Transition Service Inc. (NVTSI), “81 percent of transitioning military personnel do not feel fully prepared for the process of entering the job market.”

There are countless support services to help veterans through their transition, but navigating the programs and resources can be a daunting challenge. To provide a fresh perspective and tackle the transition experience through an educational lens, the University of San Diego, in partnership with EDC, hosted its third annual Military Transition Conference. The USD Military Transition Conference focused on translating military experience into skills and knowledge applicable to a wide variety of industries, and addressed key questions military personnel and veterans have around educational benefits, job hunting, and more.

Attended by more than 75 veterans and their dependents, the conference showcased opportunities for veterans to continue meaningful, innovation-driven work in San Diego. The day kicked off with a keynote address by Maurice Wilson, president and executive director of NVTSI and creator of REBOOT, a cohort-based program designed for transitioning military to develop skills necessary for successful reintegration into civilian life. Following the keynote were a series of breakout sessions where participants could get their resumes reviewed, speak one-on-one with industry representatives, or get coached on job search strategies. Finally, a panel of veterans – representing Bank of America, SONY, Intuit, TaylorMade Golf, and Sentek Global – wrapped up the conference by sharing their transition stories into successful careers across tech, finance, and manufacturing.

With veterans representing nearly 10 percent of San Diego’s population, the development of this important pool of talent is pertinent to San Diego’s economic success. EDC will continue to support the veteran ecosystem, helping to elevate local opportunities for transitioning military. 

 

February 23, 2018

A world leader in 3G, 4G and 5G wireless technologies, Qualcomm is San Diego County’s largest publicly traded company. The locally-grown company has, quite literally, put the smart in our smart phones.

More than that though, Qualcomm has poured into the San Diego community. Its innovation and investment in this region has catalyzed life-changing developments in robotics, unmanned systems and mobile health, as well as inspired more than 3,300 students to pursue careers in STEM through its Thinkabit Lab.

And as Qualcomm juggles an unsolicited offer from Broadcom and a record-breaking acquisition of NXP Semiconductors, there is no denying that this San Diego tech innovator has shaped the region's economy and connected millions across the globe.

EDC recently produced an economic impact assessment of Qualcomm, based on 2017 data. The numbers:

  • In 2017, the total economic impact of Qualcomm on the San Diego region’s economy was an estimated $4.9 billion. This is equivalent to 35 Comic-Cons.
  • While Qualcomm directly employs 13,000 people locally, Qualcomm’s presence in the region impacts an estimated 36,050 jobs when considering direct, indirect and induced effects (expenditures of production, B2B spending and local spending of wages by employees and other businesses).
  • Every dollar generated directly by Qualcomm results in an increase of almost $2 in the San Diego region’s GDP.
  • In 2017, Qualcomm impacted approximately $3.4 billion in wages in the regional economy.
  • In 2017, Qualcomm impacted an estimated $7.9 billion in economic activity (output).

EDC will release the full economic impact assessment on Qualcomm in April. Stay tuned.

Follow along and share your support with #QualCOMMUNITY.

 

February 15, 2018

Today, EDC launched a data-driven initiative to drive economic growth and inclusion in the region. Catalyzed by San Diego’s participation in the Brookings Institution’s Metropolitan Policy Program learning lab in 2017, EDC released research that highlights the region’s economic pain points and necessity for an employer-led approach to tackling inclusivity issues.

Despite record-low unemployment and a renowned innovation ecosystem, San Diego has an inclusion problem that cannot be ignored,” said Mark Cafferty, president and CEO, San Diego Regional EDC. “Small businesses cannot compete with larger corporations, while one million people cannot afford to live here. This initiative is a call to action for San Diego’s employers – we must come together to bridge the gaps in our economy.”

While the rise of the innovation economy has created wealth and opportunity across the region, it has also widened economic inequalities. If San Diego does not change its status quo, the region will lose employees and companies to other regions. 

Key facts:

With the combination of a high cost of living, low educational attainment in our fastest growing population and a small business-centric economy that struggles to pay competitive wages, it is imperative that San Diego employers take action to promote economic inclusion.

Convened by EDC, a Steering Committee of local employers will work to create an actionable platform to achieve three goals: close the minority achievement gap; equip small businesses to compete; and address the affordability crisis. The committee consists of nearly 40 local employers including Northrop Grumman, Solar Turbines, Sempra, Thermo Fisher Scientific, San Diego Padres and more.

Inclusion is not a philanthropy issue. This is about economic competitiveness, and San Diego’s employers must lead the charge in addressing inequity in our local workforce, said Janice Brown, founder and owner, Brown Law Group, and incoming board chair, San Diego Regional EDC. “But if any region can change and reinvent itself, it’s this one.” 

If the region intends to compete in the global market, employers and economic development leaders must work to ensure all workers have equal opportunity to thrive. While talent attraction efforts are necessary in an increasingly global economy, San Diego must ensure its future workforce is prepared for jobs in the innovation economy and recognize opportunity within its local talent pool.

To view the research summary, click here.

Over the next year, EDC and the Steering Committee will produce ongoing research and develop actionable recommendations to inclusive economic development in San Diego that will be updated on sandiegobusiness.org/inclusivegrowth.

The initiative launched at an event hosted by EDC at the Jackie Robinson YMCA, with special guest Amy Liu, vice president and director of the Metropolitan Policy Program, at the Brookings Institution.

Other partners and organizations are making progress as well. On February 27, National University and the San Diego Workforce Partnership are hosting Dr. Raj Chetty, leading impact economist from Stanford University, and the author of research that inspired much of the focus on inclusion, nationally.  He will discuss social mobility markers and the link between mobility and economic growth. To RSVP for the event, click here.

 

February 14, 2018

Last week, President Trump signed a two-year budget deal that included a hike in the debt ceiling and agreements to raise spending caps for domestic and defense programs.

For San Diego, a community where 20 percent of our GRP is tied to the military, this bill provides some stability and relief from the constant threat of continuing resolutions and sequester.

In order to better understand how fluctuations in defense spending impact our regional economy, EDC has released “Mapping San Diego’s Defense Ecosystem,” as well as a data visualization tool at SanDiego.DoDspend.com. This is the first of its kind regional analysis that focuses on the industrial composition of the defense supply chain and quantifies the number of firms and jobs that are impacted by defense spending. This project was executed as part of phase one of Propel San Diego, a Department of Defense funded grant initiative awarded to the City of San Diego.  

Specifically, the web tool provides deal flow information at the zip code level and by industry across the county. Why this matters: the 2019 budget includes two Fleet Replenishment Oilers (T-AO) priced at $1.1 billion. These ships will likely be built by General Dynamics NASSCO here in San Diego. While those contracts are awarded over a period time, by using this new tool, users can see that this funding will have a direct impact in creating more than 1,000 jobs in the shipbuilding and repair industry.

Key study findings include:

  • San Diego is the second largest recipient of defense procurement dollars in the U.S. 
  • A strong network of suppliers and access to customers are key reasons that 71 percent of firms have a favorable view of San Diego as a place to do business.
  • Defense contractor jobs have grown 6.3 percent over the last three years, and are expected to grow another 9.3 percent over the next year.
  • Since 2012, the majority of contract dollars received by the region were awarded by the Department of the Navy, each year awarding between 44 and 55 percent of total awards.
  • The majority of contract dollars were awarded to companies in the manufacturing industry, each year receiving anywhere between 47 and 68 percent of total contract dollars.


These resources provide companies, city planners, workforce agencies and economic development organizations better insights into how legislation like the bill signed into law last week can impact the San Diego community. The data has the potential to help companies prepare for new market opportunities and help communities prepare for changes in workforce demands, as has helped inform how EDC can better prioritize our limited resources in support of the region’s defense industry.

Following the successful execution of Propel San Diego’s phase one, the City of San Diego has been awarded a phase two grant for an additional $1.7 million. For more information, visit sdmac.org/propel.

Read the full study here.

 

January 30, 2018

On the heels of EDC's 2017 U.K. trade mission, San Diego-based Edico Genome and Genomics England announced a new partnership to strengthen the accuracy and consistency of next-generation sequencing (NGS) data analysis in Genomics England’s Rare Disease Pilot. The partnership will support Genomics England in making NGS the standard of care across the U.K.’s National Health Service in 2018.

Specifically, the partnership will focus on the analysis pipeline − improving alignment and variant calling of whole-genome sequencing data. Genomics England selected DRAGEN for its industry leading accuracy and speed, enabling the organization to accelerate analysis of large clinical genomic datasets.

Read more from Edico Genome.

January 19, 2018

Each month the California Employment Development Department (EDD) releases industry data for the prior month. This edition of San Diego’s Economic Pulse covers December 2017 data, including unemployment, new business establishments and job postings.
 
Highlights include:
  • The region’s unemployment rate was 3.3 percent in December, unchanged from November. The unemployment rate is nearly one full percentage point below the December 2016 rate of 4.1 percent, and the lowest since December 2000.
  • Most jurisdictions saw no change in their unemployment rates from the month prior. However, four jurisdictions did see small increases of 0.1 percent.
  • The labor force shed 7,700 workers in December, after adding 4,800 workers in November. The month’s decline effectively halved the year’s gain, which ended up 7,800.
  • Year-over-year, construction growth outpaced all other key sectors, up 4.3 percent.
 
Read the full Economic Pulse here.
December 19, 2017

San Diego’s 2017 story was one of growth, innovation, global connectivity and collaboration across different communities and industries. And even in a year riddled with uncertainties, San Diegans remained committed to driving positive change – and EDC remained committed to delivering news about this change to your inbox each week.

So, we’re sharing San Diego's top 10 'Good News' stories from 2017 as a reminder of just how lucky we are to call this life-changing place home.

From all of us at EDC, we thank you for being a part of it (and a special thanks to Phil Blair at Manpower San Diego for sponsoring this Good News all year long). Here’s to 2018.

  SD deploys largest IoT platform in the world
San Diego might just have the smartest streetlights in the world. The city of San Diego partnered with GE to upgrade streetlights to reduce energy costs by 60 percent, as well as transform them into a connected digital network that can optimize parking and traffic, enhance public safety and track air quality. With 3,200 smart sensors, it is the largest city-based deployment of an IoT platform in the world. Read more.
 
  Airport expands, adds new nonstop flights
It was a big year for the nation's busiest single runway commercial airport. A few highlights from San Diego International Airport:
 
  Cubic moves the world
Cubic Transportation Systems is quite literally moving the world. This year alone, the San Diego transportation technology company netted more than $1 billion in contracts to implement next-gen payment systems for the New York Metropolitan Transportation Authority and Massachusetts Bay Transportation Authority. Cubic also signed contract extensions with Transport for London, and with the Metropolitan Transportation Commission in the Bay Area
 
  Amazon expands in San Diego. No, not HQ2
Amazon committed to growing its footprint in San Diego, with more than 100,000 square feet of office space leased from Alexandria Real Estate. While Amazon has a small office in Solana Beach, as well as distribution facilities in the region, this is its first major office/engineering presence in the region – with room for 500 employees. While this move is separate from its highly-publicized HQ2 bid, it does signal that Amazon sees viability in the San Diego market. Read more.
 
  San Diego's Toni Atkins tapped to lead CA State Senate
State Senator Toni Atkins is set to become the California Senate President Pro Tem. She is the first woman and first openly gay legislator to hold the leadership position – and she hails from none other than San Diego. No stranger to leadership roles, Atkins previously served nearly two years as speaker of the California Assembly. Read more.
 
 

Former Google Ventures exec chooses SD as VC fund home
While San Diego may not be viewed as VC heavy weight, this year proved that we can still hold our own in the VC ring. When former Google Ventures exec Bill Maris was closing on his venture fund, Section 32, he chose San Diego as its home. While local companies do command VC (82 deals totaling $903 million as of Q3 2017), there are few funds based here. Maris’ decision to operate out of San Diego brings a new type of VC ecosystem to town. Read more.

 
  Comic-Con commits to SD through 2021
Staying true to its 1970 commitment, Comic-Con International announced it will remain in San Diego through 2021. With more than 130,000 attendees from across the world, Comic-Con is the San Diego Convention Center’s largest event and is estimated to generate $135 million regionally and $2.8 million in tax revenues for the city. Plus, it makes for some great people watching. Read more.
 
  SD ushers in new era of precision medicine
As the most patent intensive genomics market in the U.S., San Diego is leading the charge in a new era of healthcare. Kicking the year off, local genomics giant lllumina unveiled a new machine that is expected to sequence a whole genome for less than $100, in less than one hour – down from $1,000 in 2014. Also making waves in the genomics space, Edico Genome set (another) world record by processing 1,000 pediatric genomes in two hours and twenty-five minutes. Read more about the industry in the first-ever genomics study, which EDC released at BIO 2017.
 
  Local universities expand, bolster talent pipeline
San Diego universities produce a top-tier talent pipeline for employers both here and across the globe. And now more than ever, San Diego State University, UC San Diego, Point Loma Nazarene University and other locals are expanding programs and campuses to accommodate increased enrollment and industry needs. This year's university successes include:
  • UC San Diego broke ground on a state-of-the-art facility in East Village that will connect students to downtown's diverse, entrepreneurial community
  • San Diego State University quantified its impact, highlighting $5.67 billion in economic activity and 42,000 jobs supported
  • Local philanthropist T. Denny Sanford donated $28 million to National University System to address critical needs in teacher education, PreK-12 instruction and nonprofit fundraising
 
  San Diego tops the charts
San Diego made its presence known in many of this year's national rankings. From the region's entrepreneurial culture to its quality of life, top-tier publications and organizations took notice of what San Diego brings to the table. Here are some of our favorite rankings of the year: