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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.

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Today, San Diego Mayor Faulconer announced The City of San Diego has been awarded a $1.6 million grant from the Department of Defense’s Office of Economic Adjustment to support the resiliency and growth of local defense contractors.

The City of San Diego and key partners, including San Diego Regional EDC, County of San Diego, San Diego Military Advisory Council, East County Economic Development Council and South County Economic Development Corporation – collectively named Propel San Diego – will deploy programs to support the region’s defense ecosystem. 

Leveraging the grant, the Propel San Diego team will concentrate on economic development strategies for companies expanding in or at risk of leaving the region. As part of this work, Propel San Diego will create a database of all defense firms in San Diego County and deploy an interactive tool to explain and model changes in defense spending activity.

Home to the largest concentration of military assets in the world, San Diego’s economy is inextricably linked to the national defense ecosystem. According to SDMAC, the total economic impact of the defense industry is nearly $45 billion.

Defense-related organizations are as diverse as San Diego’s key industries and include companies specializing in aerospace, maritime, unmanned vehicles, robotics, autonomous systems, cybersecurity, advanced manufacturing and more.

Leveraging DoD support, Propel San Diego programs aim to help San Diego retain highly-skilled talent and create increased stability for defense companies in an increasingly uncertain defense budget world. 

Propel San Diego sentiments:

• “San Diego is proud of its military roots and our defense industry plays an integral role in our local economy,” Mayor Faulconer said. “This grant will help support our local defense contractors so they can keep creating the kind of good-paying jobs San Diegans deserve.”
• “From Qualcomm’s mobile technology to Cubic’s smart card systems and ViaSat’s broadband satellites, some of the world’s most game-changing technology is rooted in San Diego’s defense industry. Supporting the commercialization and visibility of the region’s defense-related firms, small and large, is critical to economic growth. The OEA grant and Propel San Diego collaborative enables us to do just that,” said Mark Cafferty, president and CEO of San Diego Regional EDC.
• “The Propel San Diego initiative and OEA funding will enable a complete technology refresh of East County Economic Development Council‘s Connectory.com Network, an online resource that contains detailed capabilities profiles of industrial and technology companies across all industries,” said Joe Mackey, chair of the East County EDC board and CEO of XL Staffing and XL Security. “An upgraded Connectory that takes advantage of big data analytics will allow Propel San Diego to understand and track the wide, deep and diverse defense supply chain resident in the San Diego region, now and into the future.”
• “SDMAC is honored and excited to be a recipient of the OEA grant. We look forward to playing a key role in facilitating the exchange of contractual information that will keep business in the San Diego region,” said Randy Bogle, executive director of San Diego Military Advisory Council.

For more information, visit OEA.gov.