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The Big Picture San Diego Blog


Economic Drivers

June 21, 2016

This week, World Trade Center San Diego traveled to Washington, D.C. to attend the SelectUSA Summit.

For the first time ever, San Diego had an organized and coordinated effort for the nation’s foreign investment summit. In partnership with the City of San Diego and the City of Chula Vista, San Diego hosted a booth that attracted nearly 40 international companies and investors that communicated interest in the San Diego region. Their interests ranged from learning about the city’s concentration of innovation-based industries, San Diego’s climate action plan and additional details on the local talent pool. While quantifiable value is still be determined, the overall experience by the San Diego delegation was incredibly positive and we’re all in agreement that SelectUSA did a top notch job.

The summit hosted more than 2,400 visitors from 70 international markets, including some of San Diego’s priority markets – Japan, China, Germany, Canada and more. Foreign direct investment (FDI) is a key tenant of the work WTC San Diego undertakes, especially as it tends to increase the research & development funding of a region (great when your region’s R&D efforts contribute more than $14 billion), pay employees better wages/salaries (great when your region’s pay is already competitive for its employed citizens) and can fill key capital gaps of a region (which enhances the fact that  San Diego receives the 4th highest amount per capita of venture capital in the software industry).

Staying on the topic of foreign investment, WTC San Diego’s executive director Nikia Clarke attended the inaugural meeting of the Investment Advisory Council (IAC). The IAC is a group of key foreign and domestic business leaders that will advise Secretary of Commerce Penny Pritzker and the U.S. Department of Commerce on policies that will enable the government to ensure foreign investment flows into the U.S. economy. In an ever increasing global economy, where FDI is shifting from  advanced economies to emerging and from big business to small- and medium-sized enterprises, it has become apparent that the U.S. – both from a national and a local level – needs to proactively market and attract foreign investment. The IAC will meet over the next two years in order to advise the current administration and help streamline the transition into the new one.

Finally, we couldn’t have had the presence we did at SelectUSA without the help and success of our key local companies. To that effect, we want to thank Stone Brewing Co. for its incredible work in promoting the San Diego craft beer industry. Using their beer at the private reception WTCSD and the City of San Diego hosted on Monday night, we attracted more than 50 investors and educated them on the San Diego region’s offerings by allowing attendees to experience a little of our quality of life – craft beer (IPA’s of course) and sliders.

 

June 21, 2016

This week, the San Diego County Regional Airport Authority announced a new seasonal service between San Diego and Frankfurt, Germany. The new flight – operated by Condor Airlines – will provide the only nonstop connection between San Diego and Continental Europe.

EDC and World Trade Center San Diego (WTCSD) worked in partnership with the San Diego Tourism Authority to support the efforts of the San Diego County Regional Airport Authority to bring Condor Airlines’ direct daily service to Frankfurt.

New international route service is a core priority of the newly relaunched WTCSD and EDC’s global competitiveness interests. Making the business case, the EDC and WTCSD team prepared a package of materials, including research related to economic ties between both Germany and San Diego, and a series of case studies of German-owned firms operating in the San Diego region and a compilation of San Diego-based companies operating in Germany.

Key economic figures include:

  • In 2015, Germany ranked as the 4th largest source of foreign employment in San Diego, with more than 4,368 jobs in San Diego tied to German-owned businesses.
  • German companies such as Taylormade (Adidas), Kontron and Siemens all have locations in San Diego.
  • Germany is a top destination for San Diego exports, especially in the machinery, electronics and precision instruments industries.
  • Over the last decade, German companies have invested more than 300 million in new projects in our region, making Germany one of our top three largest greenfield investors.  
  • San Diego companies across diverse industries are targeting Germany, as seen with Stone Brewing Co.’s brewery in Berlin opening in late 2016.

Upon meeting with the Condor team, EDC prepared and delivered a presentation outlining the growing interests between Germany and San Diego. In the weeks following the presentation, EDC answered a series of follow up questions and requests from the Condor Airlines route planning division to help secure its commitment to San Diego.

“As one of San Diego’s top partners for exports and foreign investment, Germany is fast becoming one of our economy’s most important international markets,” said Mark Cafferty, president and CEO of San Diego Regional EDC. “Condor’s new direct flight will now link San Diego to one of Europe’s most important economic and cultural hubs.”

 

Condor will begin service in May 2017 with up to three weekly flights on Mondays, Thursdays, and Saturdays. The route will operate on a Boeing 767-300ER aircraft and offer three classes of service: Business Class, Premium Class and Economy Class. Flights can now be booked online at http://www.condor.com/

June 21, 2016

First, Germany. Now, Switzerland. Q2 was chock-full of global wins for San Diego. The San Diego International Airport recently announced a new nonstop service to Zurich, Switzerland. Edelweiss, a Swiss leisure carrier owned by the German airline Lufthansa, will operate flights between the two cities on Mondays and Fridays starting in 2017.

As part of EDC’s efforts to increase San Diego’s global competitiveness, EDC and World Trade Center San Diego (WTC San Diego) worked in partnership with the San Diego Tourism Authority to support the San Diego County Regional Airport Authority in bringing Edelweiss’ nonstop seasonal service to Switzerland. Making the case for San Diego, WTC San Diego provided data and research on economic ties to the European innovation hub.

 Why Switzerland matters to San Diego:

  • Switzerland ranks third among all nations for the most foreign employment in San Diego.
  • Swiss companies such as Novartis and Genentech call San Diego their home.
  • In 2011, more than 50 percent of all Swiss employment entered San Diego through M&A activity.

Airport Authority CEO Thella Bowens said that with the addition of the flight, San Diego will have direct service to six countries and add to the list of foreign airlines operating out of Lindbergh Field.

June 14, 2016
This week, the Worth Group announced that San Diego has been named as a 2016 “Worth Destination.” Featured in the June/July issue of Worth magazine, San Diego is among 15 cities lauded for civic leadership, quality of life, business climate, sustainability, entrepreneurial community, cultural offerings and urban innovation.
 
After months of deliberation and research by Worth's editorial team, San Diego was chosen for its burgeoning technology and life sciences ecosystems, powerful cross-border manufacturing economy, unparalleled infrastructure and world-class cultural institutions.
 
“San Diego has long been famous for its incredible natural beauty and beautiful weather,” says Richard Bradley, Worth’s editor in chief and chief content officer. “But thanks to its close and mutually beneficial relationship with Mexico, its status as a global hub with a particular emphasis on Asia, and its world-class scientific community, San Diego is also an economic powerhouse.” “Recognition like this from a magazine as prestigious as Worth shows that San Diego’s reputation is shifting,” says Joe Terzi, President and CEO of the San Diego Tourism Authority. “The city is becoming known for more than beautiful scenery. Showcasing San Diego’s innovation, creativity and strong business sector is vital not only for attracting new companies and talent to the marketplace, but it is also key for attracting top conferences and business travelers, which are a critical part of the local tourism economy.”
 
“From advancing the human genome to developing cutting-edge military technologies, San Diego is a leader in global innovation,” said Mark Cafferty, president and CEO at San Diego Regional EDC. “Worth provides San diego with a powerful platform to tell our story to important audiences around the world.” Focused on entrepreneurship, wealth management, philanthropy, travel and lifestyle, the Worth media brand includes print, digital, broadcast and radio channels as well as the bimonthly magazine Worth. The full list of Worth Destination cities will be announced on June 21. The June/July issue of the magazine featuring San Diego will be available on newsstands beginning June 28, 2016.
May 17, 2016

By Jesse Gipe, manager, economic development

In partnership with more than a dozen organizations across San Diego County including the San Diego Military Advisory Council (SDMAC), EDC has established Operation San Diego, a strategy to support our military and defense assets in the region. As part of these efforts, I had the opportunity to attend the largest gathering of senior military officials ever hosted by the Governor’s Military Council (GMC) earlier this week. The two-day Defense Summit provided military leaders, support organizations, state agencies and elected officials an opportunity to discuss how to address some of the critical needs of bases and the personnel they house.

While in San Diego it can be hard to forget the impact of our military in our day to lives – with a $45 billion impact to our GRP – other areas in California do not share our military concentration. Recognizing the need for a strong voice from California in support of the military, and through efforts led by both SDMAC and EDC, Governor Brown established the GMC. The all-volunteer board members of the GMC form an impressive roster of retired flag officers from every branch of the DoD and Coast Guard. This group of well-respected former military leaders have answered the Governor’s call to serve on the council and lend their collective expertise to ensure that California is proactively supporting the military in DC and at the state level.

Kicking off two days of activities, the GMC hosted their quarterly board meeting attended by Governor Brown on Tuesday. The council, led by Chair Ellen Tauscher, former Under Secretary of State for Arms Control and International Security Affairs, discussed the GMC’s strategy to support bases and personnel in California. 

After the GMC’s board meeting, nearly 40 active duty commanders and military personnel including some of the state's most senior commanders such as Brigadier General Edward Banta, Commander of Marine Corp Installations West and a strong contingent from Navy Region Southwest flew in to participate in a full day of workshops on Wednesday. In addition to the military leadership approximately 50 individuals from base support organizations such as SDMAC’s Executive Director Randy Bogle and other key agencies like SANDAG were also in attendance.

The workshops were designed to help bases and the communities supporting them identify solutions to address several common issues. These issues primarily revolve around the military’s needs for reliable and secure energy, the impact of the drought on water reliability, the demand for new creative funding partnerships to address budget shortfalls caused in part by sequestration, and of course how to help service members transition back into civilian life.

This message has certainly resonated with Governor Brown, who reiterated the significant role of the military in his remarks to the GMC: “There is a very important connection, because without the defense contracts, the aerospace contracts in California wouldn't be where it is today.”  Military bases across California not only continue to provide vital national security missions for the United States; they have been pivotal in the establishment of some of our state's most vibrant industries.  Most notably, of course, would be aerospace, but bases like SPAWAR in San Diego have created groundbreaking technologies such as radar, that have helped spur commercial innovation in a wide variety of industries.

Events like this provide unique value for San Diego as we strive to maintain and enhance what has always been one of our region’s critical economic and cultural pillars: the military.  EDC will continue to work closely with the GMC, regional partners including SDMAC, the State of California and in Washington DC to make sure that as our region continues to support the military.  

May 5, 2016

With over 3.2 million people and nearly 1.5 million jobs in the San Diego region today, San Diego’s extensive network of highways, roads, rail lines and public transit serves as the backbone of our economy. Essential for the movement of people and goods in and around the region, transportation infrastructure strengthens the regional economy and promotes future economic growth. Expansions and enhancements to roads, highways and public transit reduce congestion, decrease travel times and increase business productivity and overall economic competitiveness.

First approved by voters in 1988, TransNet – the region’s half-cent sales tax – has funded a variety of local transportation projects including roads, highway, public transit and active transportation. Since its inception, nearly $3.3 billion in funds collected by TransNet have been leveraged with nearly $10 billion more from federal, state and local funding sources to deliver more than 650 projects throughout the region. EDC released an economic impact analysis of TransNet, which reveals how investments in transportation over the last 25 years have impacted San Diego’s economy.

Key findings:

  • TransNet has a $20 billion economic impact.
  • 650 projects have been completed to date, including 6,500 acres preserved as open space.
  • Every $1 collected in TransNet taxes results in a $1.70 increase in the region’s GDP.
  • TransNet supports 5,300 jobs annually and has contributed $9 billion in total local wages.
  • Regional benefits from infrastructure investment include 12.4 million hours of commute time savings and $500 million in travel time savings annually.  

Read the analysis here.

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 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.”

March 4, 2016

Phil Blair

Download a printable version
 

“The local economy picked up steam in January after slowing a bit toward the end of 2015 – a typical trend as seasonal, holiday jobs phase out. Key sectors like manufacturing, construction, engineering, and health care all posted outstanding figures this month. These trends are also reflected in the demand for staffing services, which posted seven percent growth in employment in January.”
Phil Blair, Executive Officer
Manpower San Diego


This post is part of an ongoing monthly series dedicated to the California Employment Development Department (EDD) monthly employment release and is brought to you by Manpower

 

The California Employment Development Department (EDD) released statewide county employment data today for the January 2016 period, as well as revisions for 2015. This month’s data shows that San Diego's labor market fundamentals remained strong, as unemployment continued to fall amid solid and steady job growth.

The unemployment rate fell to 4.7 percent in January, the lowest since September 2007. The rate is down 0.1 points from the revised December number and 1.2 points from the previous year. The San Diego rate remained much lower than the statewide unemployment rate of 5.8 percent. The national unemployment rate rose substantially to 5.3 percent, well above the San Diego rate. The rate dropped in part due to a typical seasonal decline in the labor force from December to January, but the annual labor force increased by 6,100, with 16,900 fewer unemployed persons since January 2015.

Employment dropped back below 1.4 million in January, but seasonal declines are typical after the holiday season. More importantly, year-over-year employment went up by 38,200, a 2.8 percent increase. San Diego’s growth rate was again much higher than the 1.9 percent national rate. While the year-over-year growth slowed as 2015 progressed, the growth rate climbed again in January, which is a positive sign of momentum in the region.

The private sector drove employment growth in January, as private employment accounted for 90.3 percent of all employment growth over the year. The total private sector grew by 3.1 percent year-over-year, out-pacing the private U.S. growth rate of 2.2 percent.

Private growth was driven largely by service providers, but goods producers experienced another strong month. Manufacturers and construction companies drove 24.0 percent of private job growth in January. The two industries added a combined 8,300 jobs in January. The manufacturing industry in particular had a very strong month, posting 3.4 percent growth, compared to the national growth rate of 0.4 percent in the industry. Revisions showed that 2015 was an even stronger year than previously understood, with an annual 2015 growth average of 3.7 percent.


Professional, scientific, and technical (PST) services, which is strongly associated with the region’s innovation economy, slowed substantially in January, but it is unclear if there are complications with the EDD revision. Prior to the revision, the industry showed6.6 percent growth in 2015. With revisions, that growth is only 1.9 percent. It is unclear if job growth previously categorized as PST was moved to another sector like manufacturing or management, as national revised figures don't show the same dramatic shift. Architecture and engineering, a subset of PST services, showed solid growth of 5.1 percent despite the overall PST figure.

Other key drivers for growth included the region’s healthcare sector, which added 7,100 jobs and accounted for roughly one fifth of the region’s private job growth in January. Tourism experienced strong year-over-year growth, adding 5,900 jobs and contributing to 17.1 percent of growth.

In all, the January report released today showed many continued positive signs for San Diego's economy. The dramatic adjustment to PST employment raises some questions, and we will have to wait and see what was behind this revision by EDD. Otherwise, the region posted another month of solid yearly job growth, in large part due to the booming manufacturing and construction industries. Unemployment fell despite statewide and nationwide increases, and growth was spread out across a variety of key high-wage and base sectors in the region.

This report was performed with assistance from the CBRE research team in San Diego.

 

March 3, 2016

By Matt Sanford, director of economic development

As I fly over Palmdale and glance down at one of the last large aerospace manufacturing facilities in the Southern California, it is a reminder that the aerospace industry as a whole is experiencing dramatic change. Some of the large industrial centers still exist and are highlights of the heritage of the industry. But the landscape as a whole is changing.
 
San Diego is the place where Charles Lindbergh built the Spirit of St Louis and since then, Southern California has been at the forefront of aerospace innovation. Today, it continues to be a hub for innovators looking to push the envelope. But instead of erecting more large manufacturing facilities, we will see this innovation in entrepreneurs and startups, in tech companies that are entering the industry, and in legacy industry leaders who are pioneering new technologies, and driving convergence with other tech sectors to create new capabilities.
 
Now, we are creating new sensors and systems to push the envelope even further. The James Webb Space Telescope being developed by Northrop Grumman in El Segundo will give us the most comprehensive look at the universe to date. The technology developed at ViaSat in Carlsbad is creating the fastest satellite broadband available to the public. San Diego is also home to Brain Corporation, 5D Robotics and the Center of Excellence for Northrop Grumman’s unmanned systems division. These companies, among others, are creating systems that will work autonomously to take on the dull, dirty and dangerous tasks that put people, both services members and private citizens, at risk.
 
So how do we quantify this activity? Through a report by the Los Angeles County EDC and San Diego Regional EDC covering the eight county Southern California region, we learned there are over 85,000 direct jobs in our aerospace industry. The total employment impact is nearly a quarter million people and it’s growing. In San Diego County alone, the industry has grown by 66.7 percent since 2004. 
 
The rich heritage of the industry has brought companies and talent to Southern California and San Diego to create a formidable ecosystem. But there are challenges. As we move forward, we must continue to support our aerospace manufacturers. We must also be proactive in identifying and supporting new sectors by aligning our universities to stay at the forefront of research and innovation, and working with the state to refute the claims that aerospace is a dying industry. Finally, we must stay at the forefront of the convergence between tech and aerospace, as it will continue to be where Southern California and San Diego can lead the industry. 
 
Even with new large contracts to develop platforms like the Long Range Strike Bomber, we must realize that as a percentage, those in the industry will be fewer on the factory floor, and more in labs and behind computers.
 
It is an exciting time for the aerospace industry in Southern California. The ecosystem is changing rapidly. It brings with it opportunity for seemingly endless growth and development of new technologies.
 
For more information, see the full study and fact sh eet.