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The Big Picture San Diego Blog


Mega-Region

January 30, 2017

By Nikia Clarke, executive director of WTC San Diego and Peter Cowhey, interim executive vice chancellor for Academic Affairs at UC San Diego
 
During his first week in office President Trump made many bold moves, including an executive order to withdraw from the Trans-Pacific Partnership (TPP), a call to renegotiate NAFTA, and a threat to impose a 20 percent border tax on Mexican imports to the United States following a very public spat with Mexican President Enrique Peña Nieto. 
 
Trade matters for economies, big and small. For a border city on the edge of the Pacific, decisions on trade policy in Washington have outsized impacts on jobs, growth and opportunities for San Diegans. 
 
Take TPP — an international trade deal originally negotiated between the U.S. and 11 other countries, covering 40 percent of global GDP
 
Right now, the status quo makes it more expensive for U.S. companies to export to other countries than it is for foreign companies to sell goods and services here. TPP sought to level the playing field, especially for the small and midsize companies that make up more than 95 percent of San Diego’s business ecosystem. 
 
It also was the first trade deal to write the rule book for the economy of the future. It protected the intellectual property of American innovators, which matters when you live in the third most patent-intensive region in the world.
 
Scientific research and development, the heartbeat of our world-renowned life sciences ecosystem and an industry dependent on patents, is five times more concentrated here than in the U.S. as a whole. 
 
TPP eased restrictions on the movement of data and services across borders, which is important when you have a globally competitive cybersecurity cluster and revolutionary big data and genomics industries.
 
In San Diego, innovation is our livelihood, and TPP would have been a game changer for all those San Diego companies that export their knowledge across the globe. Killing TPP effectively cedes leadership on trade rules and norms to China, an outcome that is unlikely to be advantageous for U.S. companies and consumers.
 
And don’t forget that 97 percent of our goods exports — primarily high-value manufactured goods worth over $22 billion — are already sold in TPP markets, employing over 120,000 San Diegans. Most of those goods are exported to Mexico, sometimes crossing the border several times before they are fully assembled. This means that 40 percent of the content of imports from Mexico — the ones subject to a potential 20 percent tax — is American-made.
 
As we pivot from what could have been with TPP and look to NAFTA renegotiation, to building a wall, to a looming trade conflict with China, we should remember that trade has always been an American reality. 
 
Here in San Diego, we marvel at the transformation over the past 50 years from a sleepy Navy town to a global city that develops life-changing technologies. We didn’t get here by building walls, and we won’t get ahead that way either. 
 
 
This op-ed originally ran in the San Diego Union-Tribune: "Trump's trade moves impact San Diego economy"

For more more on TPP and San Diego, see WTCSD's economic impact report.

December 14, 2016

Often hidden behind San Diego’s pristine beaches and thriving regional economy are the  socioeconomic disparities that exist across the county’s 18 cities.

As an organization that aims to support growth of San Diego’s regional economy, EDC understands the importance of including all communities in our work. There is much debate about what the term ‘inclusive economic growth’ means, and it’s something we are working with partners to better define in 2017. In order to understand – and define it – we must know where we currently stand. 

EDC took a closer look at the 18 cities comprising the county. The large discrepancies in poverty rates, income and education across San Diego cities show that while we are part of the largest economies in the world, we have much to improve upon. 

According to the American Community Survey, San Diego’s poverty rate is 13.8 percent – slightly below the national and state rates of 14.7 and 15.3 percent, respectively. However, eight cities in the region have poverty rates above the national average. The region’s educational attainment of 36 percent is above the national and state rates of 30.1 and 31.7, respectively, but 10 regional cities fall below the national rate. Similarly, even when the region’s median household income of $66.2K is over 20 percent higher than the national median household income of $53.7K, six out of the 18 cities fall below the national median.

Highlights from the analysis:

  • National City, with a poverty rate of 24.5 percent, is almost 10 percentage points higher than the national rate of 14.7 percent.
  • El Cajon, with a median household income of $46K, has 49 percent of its total population living below 200 percent of the poverty threshold.
  • Del Mar, with the lowest regional poverty rate of four percent, has the highest median household income at $103K and the highest educational attainment at 72 percent.
  • On the other end of the spectrum, National City has the lowest median household income at $40K (less than 40 percent of Del Mar’s) and the lowest educational attainment at 12 percent (less than 20 percent of Del Mar’s). 
  • The cities of National City, Lemon Grove, Imperial Beach and Escondido have at least 25 percent of their under 18 population living below the federal poverty threshold.
 
The prosperity of San Diego is dependent on the success and growth of all of the region’s cities. EDC is committed to increasing the dialogue around inclusive economic growth and, through data and analysis, shedding light on the region’s disparities. 
 

 

September 29, 2016

As part of the blog series leading up to San Diego MFG Day, we’re featuring 5 food and beverage items #MadeinSD enjoyed by millions of people across the world.

  1. Kashi – Started by a husband and wife duo in 1981, Kashi began with humble beginnings in La Jolla as the couple wanted to create food that promotes a healthy lifestyle. From their flagship cereal to granola bars and many other snacks, Kashi remains one of the largest and most recognizable natural foods companies in the world. 
  2. Suja Juice – A Forbes story from 2014 sums up the start of Suja perfectly: “A surfer dude and self-taught chef teams up with a law-school dropout turned yoga instructor to create one of the fastest-growing organic juice makers ever.” The San Diego company has become the fastest growing organic, cold-pressured and Non-GMO beverage company in the U.S. 
  3. Chuao Chocolatier – Bacon, potato chip, firecracker – these are just a few of the gourmet chocolate bars made by Carlsbad-based Chuao Chocolatier. Recently moving from a boutique retailer to a wide spread distribution model, Chuao continues to expand into new markets, both domestic and international. Already widely available in high-end hotels, Whole Foods, Target and Starbucks, the company recently inked a deal that puts the premium chocolate in 7,800 of 8,000 CVS stores in the U.S. 
  4. Mission Brewery – Established in 1913 and shut down during prohibition, Mission Brewery was reestablished by home brewer Dan Selis in 2007 in downtown San Diego’s East Village. With 40 national and international awards under its belt, Mission Brewery is a staple in the San Diego craft brewing industry. Check out their facility with a tour during Manufacturing Week, here
  5. Olli Salumeria – Salami manufacturer Olli Salumeria creates artisenal slow-cured salumi includes salami, salamini, cooking fats and whole-cured meats. Founded in 2010 by two friends, Oliviero (Olli) Colmignoli and Charles Vosmik, the company’s products are a favorite of celebs like Oprah Winfrey.

Celebrate all that's #MadeinSD on October 7. Visit sdmfgday.com to get involved. 

September 28, 2016
In the midst of one of the most interesting presidential elections in many of our lifetimes, the importance of maintaining close ties with the decision makers in Washington DC becomes increasingly important – most especially for our military community. That is in part why, for the last several years, EDC and the San Diego Military Advisory Council have attended the San Diego Regional Chamber of Commerce's annual trip to DC in order to lead the military and defense track. 
 
This year, with the support of Chamber staff and SDMAC Executive Director Randy Bogle, EDC discussed national security implications of TPP with thought leaders from the Trumann Foundation, ways our healthcare institutions and life sciences companies can better partner with the incoming commander of Navy Medicine West, key legislative priorities for 2017 with our congressional delegation and the future possibility of BRAC with experts from Dentons. 
 
This trip gave us the opportunity to not only expand and build relationships with key decision makers, but to give a broader audience from the Chamber a chance to hear about the leading issues impacting the region’s military.  
 
When the dust settles come November 9, whether Trump or Hillary is our next Commander in Chief, EDC – alongside regional peers – will continue to ensure that San Diego’s interests are well understood and represented in at our nation's capital.  
 
September 26, 2016
This week, Thermo Fisher Scientific, the global life sciences and biotechnology company, cut the ribbon on its Software Center of Excellence (COE) in Tijuana. Thermo Fisher Scientific is a world leader in serving science with $17 billion in revenues and approximately 50,000 employees in 50 countries. The company develops, manufactures and sells a wide variety of innovative biotechnology products including analytical instruments, equipment, reagents and software, and provides services for research, manufacturing, analysis and diagnostics.
 
Thermo Fisher’s expansion into Tijuana is exemplary of the cross-border collaboration between Mexico and San Diego – one of the leading life sciences hubs in the country. To stay current in a climate of rapidly evolving technology, the company made the critical decision to expand its software engineering division. Thermo Fisher was eager to explore the viability of opening software operations in a location with quality talent and in the same time zone as its corporate headquarters in Carlsbad. 

 
With the support of San Diego Regional EDC, UC San Diego and partners from Mexico including the city of Tijuana, state of Baja, Universidad Autónoma de Baja California and Tijuana EDC, Thermo Fisher completed several trips to Tijuana to explore viability. With this strong network of partners, Thermo Fisher made the decision to construct a world-class office facility just minutes from the San Ysidro border crossing and less than an hour drive to its Carlsbad office.
 
Software engineering talent in Latin America, in particular Mexico, has been emerging as a source for many companies such as Thermo Fisher, providing an alternative to hiring employees overseas where distance and time zones prove to be ongoing challenges. While Tijuana is traditionally recognized as a hub for advanced manufacturing, Thermo Fisher’s software COE highlights the availability of local talent in the software sector. The company successfully attracted an extremely skilled group of software personnel from around Mexico, all of whom were excited about the opportunity to be a part of Thermo Fisher’s software center. As of the ribbon cutting, the Thermo Fisher employs around 45 employees, with space to grow its team to 150 within the year. 
 
As a result of expanding operations to Tijuana, Thermo Fisher is realizing accelerated rates of innovation with less financial risk as well as unequivocal improvements in collaboration between its teams in Carlsbad and Tijuana.
 
“...being just one hour apart makes an amazing difference in how the teams are productive together," said Mark Field, CTO of Software Services, Thermo Fisher Scientific
 
September 15, 2016
The City of San Diego has been awarded $1.6 million grant by the Department of Defense to craft programs designed to enhance the resiliency of the region’s defense industrial base. As part of this grant, EDC’s research team will be responsible for conducting a county-wide supply chain mapping and economic impact study in order to arm the region with the foundational data necessary to inform the creation of effective programming. 
 
Why this matters?
The region has long benefited from strong defense companies who employ tens of thousands of San Diegans in a wide variety of industries including satellite communications, ship building, autonomous vehicles, cybersecurity and many more. 
 
We know San Diego is a hub of innovation for globally impactful defense technology, but it can at times be forgotten how these defense companies have evolved their defense expertise to transform commercial markets. Companies like ViaSat and Cubic Corporation – who started by innovating secure satellite communications and creating world-class training technologies – have grown to become major players in satellite internet technology and transportation management. 
 
The OEA grant will enable us to assess and create the tools necessary to help defense companies diversify their innovative technologies and services into commercial markets. 
 
Home to the highest concentration of military in the world, the OEA grant will ensure the City and regional peers continue to think creatively about how we leverage defense innovation to create more jobs and a more resilient economy.  
 
September 15, 2016

Fifteen years after September 11, 2001, we stand united as a country – remembering the travesty, but holding high the men and women who defend our country and freedoms every day.

As part of the blog series leading up to San Diego MFG Day, we’re featuring 5 defense technologies #MadeinSD used to protect our country, and U.S. allies across the world.

  1. Headquartered in San Diego, Cubic Global Defense (CGD) is a leading provider of virtual, constructive and game-based training solutions, special operations, mission support and intelligence for the U.S. and allied forces in more than 35 nations. CGD’s primary focus is to raise human performance by providing an integrated, effective learning assessment experience that drives combat readiness. 
  2. GKN Aerospace, a UK-based manufacturer with large operations in El Cajon, develops high-performance components and assemblies for aerostructures, engine products, landing gear, wiring systems and more. The company provides advanced transparent coatings and vertically integrated supply of aerospace grade acrylic material, and offers a full range of capability for design, analysis, testing and certification of military canopies, cockpit windows and passenger windows. 
  3. Science Applications International Corporation (SAIC) is a premier technology integrator in the technical, engineering, intelligence and enterprise information technology markets. With operations in San Diego, the company designs, develops and sustains offerings that empower diplomatic missions, support warfighter requirements and advance exploration from the ocean floor to outer space. Specifically, SAIC develops the Tsunami Buoy, a surface satellite communications buoy with deep-water data measurement sensors and mooring subsystem capable of detecting encroaching tsunamis and more. 
  4. Located in the San Diego bay, General Dynamics NASSCO is the largest full service shipyard on the West Coast. The company specializes in the design and construction of auxiliary and support ships for the U.S. Navy, and oil tankers and dry cargo carriers for commercial markets. NASSCO is currently building the USNS Hershel “Woody” Williams – the Navy’s second Expeditionary Sea Base – named for the last surviving recipient of the Medal of Honor from the Battle of Iwo Jima. The 784-foot-long ship will serve as a flexible platform to support a variety of missions, including air mine countermeasures, counter-piracy operations, maritime security and humanitarian missions.
  5. General Atomics Aeronautical Systems, Inc. (GA-ASI) is a leading manufacturer of Remotely Piloted Aircraft (RPA) systems, radars and electro-optic and related mission systems solutions. Located in Poway, GA-ASI is highly regarded for its development of the Predator aircraft: a long line of RPA systems, beginning with the highly successful "RQ-1" Predator aircraft first flown by the U.S. Air Force in 1995. Predator since has been named by Smithsonian's Air & Space magazine as one of the top ten aircraft that changed the world. The line of aircraft has been acquired by the U.S. Air Force, U.S. Department of Homeland Security, NASA, the Royal Air Force, the Italian Air Force, the French Air Force, the Spanish Air Force and others. 

MFG Day – and the manufacturing companies it spotlights – serves as a testament to San Diego’s impact around the world. Companies here develop products and services that change, save and better the lives of millions of people every day. Join us October 7 to celebrate.

August 5, 2016

This week, U.S. Secretary of Commerce Penny Pritzker and Qualcomm CEO Steve Mollenkopf joined a panel of local business leaders from Solar Turbines, Solatube and Northrop Grumman to unveil UC San Diego School of Global Policy and Strategy’s new study on the importance of the Trans-Pacific Partnership (TPP) to the nation and San Diego. The summary, “San Diego and the Trans-Pacific Partnership,” produced by World Trade Center San Diego, explains how San Diego’s unique economic assets position the region to realize relatively greater benefits from TPP than the U.S. as a whole.

TPP, an international trade deal negotiated by the Obama administration and 11 other Pacific Rim countries, seeks to lower trade barriers for exporters and increase intellectual property protections for multinational companies.

San Diego’s prime location on the edge of the Pacific Rim, as well its specialization in advanced manufacturing and other key industries tied to the innovation economy – including scientific R&D, engineering, software and cybersecurity – position the region to benefit disproportionately from TPP.

Key findings include:

  • When compared to other TPP member countries, the U.S. has one of the least restrictive markets – it is easier for foreign markets to export to the U.S. than it is for U.S. companies to send their products abroad.
  • More than 97 percent of San Diego’s exports – primarily high-value advanced manufacturing products – are sold in TPP markets and are collectively worth $22 billion.
  • Enhanced IP protections would benefit San Diego’s innovation economy; San Diego is the third most patent intensive region in the world and five times more specialized in scientific R&D than the nation as a whole.
  • Increased export growth could produce real rising wages for 150,000 high-wage jobs in the region’s manufacturing and innovation sectors.
  • San Diego’s service-providing sector – generally non-traded industries accounting for 87 percent of total employment – is largely insulated from foreign competition. 
July 22, 2016

The California Competes Tax Credit is a program created by the California legislature and managed by the Governor’s Office of Business and Economic Development (GO-Biz). The tax credits are awarded by the state to companies who are looking to move to, or stay and grow in, California. In the 2015-16 round, the state awarded more than $150 million in tax credits to 259 companies who pledged to create almost 20,986 jobs over the next five years.

Within each year of the Cal Competes program credits are awarded over three separate rounds. In the last round of the 2015-16 fiscal year of the program, which closed in June, San Diego companies captured $7 million in tax credits – the largest amount of tax credits in the state and 16 percent of the total allotted credits. San Diego received more than $1 million more in tax credits than the second-place region, El Centro – San Diego’s neighbor to the east.

Throughout the entire 2015-16 program (encompassing three rounds), the California Competes program granted 38 San Diego companies more than $19.7 million in tax credits – 13 percent of the total tax credits awarded and the second highest of all regions in the state. With this, local companies committed to the creation of 2,070 jobs over the next five years, which will result in more than $369 million in wages. Those same companies will be investing $214 million in a variety capital projects over that same period.

The program divides companies into either the small or large business category where companies compete separately for a tax credit. In San Diego, large businesses received 7.6 percent – or $11.6 million – of all tax credits for the 2015-16 year. The region’s small businesses were awarded $8 million in tax credits, or 5.32 percent of the year’s pool.              

The Cal Competes program will open its first round of the 2016-17 fiscal year on Monday, July 25 where $75 million of this year’s $250 million is up for grabs. If your business is considering relocating to, or expanding in, California, we encourage you to look at the program as tool to reduce your tax liability. Our team stands by to assist with applications, as we have with many other San Diego companies including Hunter Industries, Taylor Guitars and more.

Attend a workshop to learn how your business can apply for a tax credit, or contact Jesse Gipe for more information.

July 22, 2016

By Mark Cafferty, president & CEO, San Diego Regional EDC

Each time I have the opportunity to travel and represent our binational economy in foreign markets, I leave with new ideas, opportunities and connections that I see pay off for our region. My trip to London this past week will no doubt yield similar results. But I also can't help but feel like I was part of something bigger this time.

I began the trip as a proud member of the ProMexico Pavilion at the Farnborough International Airshow and Trade Show. Reminding the world's aerospace community of how actively San Diego supports Baja's robust aerospace/manufacturing economy is a role I am always excited to play. And while the legendary English rains put quite a damper on the first day of the show (flooding the trade show floors and completely knocking out electrical power), we still managed to pack in a lot of important meetings.

Returning bright and early for day two, we started off meeting with global manufacturer, Esterline to get an update on the status of their expansion efforts within Baja. Our mega region was out in full force as Baja Governor Francisco A. Vega de Lamadrid brought the newly elected mayors from Tijuana, Mexicali and Tecate together, along with Cristina Hermosillo (President of the Tijuana EDC) and I to talk about how we can continue to support the company from both sides of the border. The respect and support the delegation was able to convey to Esterline, and the company's clear appreciation and enthusiasm were worth the cost of the trip.

After this meeting, Cristina and I were able to get additional time with mayor-elect, Juan Manuel Gastelum of Tijuana, to develop a strategy to position the city as a software support hub and a key asset for San Diego's innovation economy. This meeting proved to be timely and important as well.

Between meetings and ceremonies at the Mexico Pavilion, I ventured out through the acres of trade show space to link up with representatives from the U.S. Department of Commerce, economic development colleagues from the State of Washington and local industry giants, Cubic and General Atomics. And as is often the case at Farnborough, a chance encounter on the ride back to London led to a new business relationship between an Italian-based supplier who Cristina and I stood next to on the train and a Baja-based manufacturer who was part of our delegation. Tri-national economic development at its best!

Days three and four were a whirlwind of walks, black cabs and tube rides through London. We were meeting with and feeling out various businesses and political leaders for the potential of a San Diego trade and investment mission in early 2017, led by Mayor Kevin Faulconer. The reception and feedback was overwhelmingly positive.

Despite the rather historic backdrop of both the Brexit and the appointment of a new female Prime Minister, the political and economic leadership in London is clearly not breaking stride. We met with representatives from Mayor Sadiq Khan's office and learned that climate change, economic inclusion and cross-border relationships—all hallmarks of our Mayor's administration in San Diego—are at the top of their London agenda. These items combined with a broader dialogue around data, open government and other "smart cities" topics will clearly make for a strong and timely series of meetings between the mayors.

The leaders at super-agency, London and Partners, pledged to work closely with our team at EDC to ensure that a potential visit in 2017 is mutually beneficial and showcases both long-term opportunities and measurable results. Additional meetings with Tech London Advocates (a large Connect-like network that supports London's start-up community), OneNucleus (a small BIOCOM-like entity that brings together London's life sciences companies) and MedCity London (a large network of well-funded life sciences incubators that have been spinning out new biotechnology and medical technology companies for almost a decade) confirmed that the interest in San Diego's biotech, high-tech and startup communities has never been higher.

We had a final meeting with a fascinating NGO called Nesta, where we explored the opportunity for San Diego to be included in some of their research and benchmarking efforts with other major global cities. It turns out they have been looking to engage more with cities in North America...sometimes timing is everything.

Looking back at my week overseas, my key takeaway is just how much our geographic proximity to Mexico and our strong regional collaboration with our partners in Tijuana/Baja have become key to our global identity. And at a time when the world is hearing international news reports of divisive and hateful rhetoric coming from one of our nation's Presidential candidates, the realities of Tijuana and San Diego working together and supporting each other have never meant more to our region and our nation's reputation abroad. We were told as much at the end of just about every meeting we had.

So I truly hope we will be returning to London in 2017 to see our two mayors open up a new connectedness between our highly innovative cities. I hope that business and university leaders from throughout our region will be there with us to generate new investment, trade and strategic partnerships. And I also hope that our partners and friends from Mexico will be right there by our sides—as always—continuing to show the world what binational leadership and collaboration looks like. I believe this can be one of the most important overseas missions our region will ever embark on. And I am certain that the results will pay off in more ways than we can possibly measure.

So as our #GlobalSD campaign marches on, we want to once again thank all of our partners and investors who are continuing to make it all possible. And if you see Mayor Faulconer, don't forget to remind him how much you appreciate, support and encourage his leadership in these efforts.