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The Big Picture San Diego Blog


MetroConnect

May 29, 2015

Earlier this week, the Brookings Institution published The 10 Lessons from Global Trade and Investment Planning in U.S. Metro Areas.

As one of the pilot cities in the development of a trade and investment plan, San Diego has learned a lot about itself in its ability to better compete globally. Below are the lessons learned:

 

(1) The primary benefit of global trade and investment is increased competitiveness, not quick jobs.

There is a reason the goal of the Go Global initiative is to maximize San Diego’s global competitiveness and prosperity through increased global engagement: increasing exports and attracting foreign investment (FDI) take time. Once a company decides to go global and export, it takes the firm 18 months on average to finally get its product abroad. 

 

(2) The most important firms are the ones you already have.

When more than 98 percent of the national job growth comes from startups and business expansions, it’s hard to ignore San Diego’s most important assets – its own companies.  When Takeda Pharmaceuticals, one of the oldest and largest companies in Japan, decided to condense its West Coast operations, it chose San Diego – closing the San Francisco office and moving those jobs into the region. 

       

 

(3) FDI and exports are closely linked.

Innovation-based industries that export San Diego’s leading products and services are also the drivers of FDI into the region. Reinforcing this relationship, FDI in these industries has catalyzed international exports as parent companies open new markets for San Diego establishments.  Aerospace products, pharmaceuticals, communications equipment, and semiconductors – all of which are strong exporting industries and large sources of FDI. 

 

(4) Leading with real specializations opens doors for firms.

Case in point: Go Global San Diego Strategy 4, Tactic 5: Reinforce research institutions leading innovation. Leading with San Diego’s premier research institutions will enable the spillover effects these institutions create – starting new companies and growing jobs. Hybritech, San Diego’s first biotech company, was co-founded by two professors from UC San Diego. Since then, UC San Diego’s faculty, staff, and students have founded more than 640 companies. 

“Our location is key for collaboration and talent recruitment with institutions like UCSD and Scripps. These assets make San Diego an attractive place for foreign firms to establish U.S. beachheads.” – San Diego pharmaceutical company                                                

 

(5) The middle market offers outsized opportunities.

EDC’s MetroConnect prize, funded by JPMorgan Chase, will assist small and medium sized enterprises (SMEs) in their ability to go global. SMEs represent more than 99 percent of businesses in the region and are responsible for much of the innovation and job creation activity that propels our economy. The success of these firms is critical to the region’s future, and increasing their global reach is crucial to that success.

 

(6) Mergers and acquisitions are the dominant form of FDI.

Of the FDI that came to San Diego between 1991 and 2011, 60 percent did so through M&A activity. This represents more than 72,600 jobs that transferred from domestic to foreign ownership. Post-acquisition, some of these companies continue to grow. Althea Technologies, acquired by Japanese food and chemical company Ajinomoto, has had access to new markets and new capital previously unseen by the company, growing by more than 20 percent since its acquisition.

 

(7) Global engagement must be a demonstrated priority.

Focus on high impact trade missions. Implement a global identity campaign. Build a proactive protocol network of civic and business organizations. Retain and attract international flight routes to key markets.

One thing these tactics have in common is that organizations throughout San Diego must have a mindset and culture that is global in nature. Having one organization carry the weight of interacting with global players is a lot of work. Having a network of organizations that work together in attracting new flights, execute trade missions, and implement a global identity ensures San Diego can reap the benefits of global connectivity. 

 

(8) Global commerce is driven by relationships and networks.

San Diego is one of the most active binational cross-border regions in the world. Global trends are making Mexico, and Baja California in particular, an increasingly favorable location for manufacturing. Their proximity to San Diego gives our region a clear competitive advantage.

 

(9) Metro areas are unsure of how to harness emerging forms of global capital.

When it comes to global patent intensity, San Diego ranks third, yet when compared to U.S. cities, it ranks a distant eighth in terms of the amount of venture capital activity in the region. Because of this, venture capitalists, entrepreneurs, research institutions, and a whole host of other entities are increasingly looking to alternative sources of capital – EB-5, limited partners, sovereign wealth funds, corporate partnerships. Finding ways to leverage these resources can help bridge these capital gaps. 

 

(10) Competing on a global scale requires that metros intensify efforts on other critical economic issues.

“Workforce and infrastructure have consistently surfaced as the two issues that are increasingly threatening the competitiveness of companies and regions.” Feeding talent to companies and releasing the bottleneck from inefficient infrastructure can improve economic competitiveness and help grow the economy. Hence why the Link2 series, activating alumni networks, and modernizing key infrastructure assets are all key tactics of the Go Global San Diego initiative.

 

March 13, 2015

MetroConnect Header

Go Global San Diego has laid out the facts. If San Diego wants to compete in a global marketplace, it must encourage companies to increase their global engagement. JPMorgan Chase & Co. has stepped up to the plate to catalyze small and medium sized enterprises to take their businesses to the rest of the world.

At the Go Global San Diego Summit on Wednesday, San Diego Regional EDC and JPMorgan Chase announced the MetroConnect Prize. MetroConnect will provide selected company with up to $10,000 in matching funds to cover up to 50 percent of the costs associated with the company’s next steps to going global.

Thanks to support from the JPMorgan Chase & Co., San Diego Regional EDC will award the MetroConnect Prize to at least 20 companies trying to take their innovative products abroad, secure strategic partnerships and boost international sales, that ultimately translates into increased economic activity in San Diego.

Deadline to apply is May 4. Head over to MetroconnectSD.org to learn more and apply.