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October 7, 2014

Meet Gafcon, one of the companies shaping Southern California’s skyline. Consistently ranked among Engineering News Record’s 100 Top Project Management Firms, Gafcon is the company behind some of the region’s most iconic locations, including the Del Mar Fairgrounds.Gafcon Logo

Founded in 1987 by Pam and Yehudi Gaffen, the company now has more than 100 employees at its offices in San Diego and Los Angeles. They seek to use their construction expertise to build vibrant communities.

We recently sat down with CEO Yehudi “Gaf” Gaffen to hear firsthand why the company thrives in San Diego.

Tell us about Gafcon

Never losing sight of an owner’s objectives and perspective, Gafcon anticipates a challenge, delivering with certainty while making the complex simple. We take command of multilayered projects by applying decades of specialized experience. Gafcon is confident in our project management teams and our deliberate approach, and are committed to the communities in which we live and work.

Our mission—27 years in the making—is to safeguard success. Gafcon project management teams consistently focus on an owner’s best interests. Our technology and management tools maximize the value in every investment. And every goal is achieved by adhering to The Gafcon Way: A process that ensures transparency, facilitates confident decision-making, and constantly strives for perfection. Our people, our technology and our processes are unique within the industry. Combined, they are a driving force that delivers certainty.

Our most important measure of success: Longstanding client relationships built on trust, personal attention and mutual respect.

What are some advantages to doing business in San Diego?

I migrated to San Diego from South Africa in search of a better place to raise a family.Why Gafcon Chose San Diego   I had received a call from a business associate asking if I was interested in working in San Diego.  I didn’t even know where San Diego was.  Once here, I quickly realized that one of the great things about San Diego is that it’s small enough to build relationships, yet large enough for opportunity.  27 years later, it is those relationships and opportunities that have helped our business grow and thrive.  I also found that San Diego businesses are also very supportive of the community at large. Being a valued “Corporate Citizen” is foundational for sustainable success and for Gafcon this has resulted in long term repeat relationships that have been mutually rewarding. 

San Diego is full of dynamic companies, firms and service providers influencing global trends and innovation. Pick another San Diego company that is at the top of its game.

Gafcon is a partner with AECOM on projects in San Diego and Los Angeles. AECOM is a true global leader. Over the years, they have been entrusted with the management and control of hundreds of major capital programs across all continents and market sectors, including transportation/infrastructure, environmental, facilities, mining and minerals, and energy. Engineering News Record ranked AECOM as #1 in the Top 500 Design Firms in education.  We have enjoyed our partnerships with them.

What do you anticipate for your company in five years?
In the next five years, Gafcon is looking towards geographic expansions into northern California and Texas. We are also looking to diversify into new markets, including infrastructure (water and transportation) and private mixed-use projects.

We reinforce our brand which is focused on delivering complex projects that power vibrant communities.  The underpinnings of this mission are: creating value for our clients, seeking new knowledge, delivering with the highest  quality, looking beyond the obvious for solutions, becoming our clients partners  and last but not least working hard and playing hard.

In San Diego, we will continue our focus on the education sector, and look forward to expanding on projects that improve the city’s infrastructure as well as deepening our involvement and contributions to the social, business and philanthropic fabric of our community.

 

September 30, 2014

Ask any company why they chose San Diego, and chances are, they will mention these two things: the strong talent pool and the community collaboration. Whereas many innovative technology companies take care of the first item, it's places like the YMCA of San Diego County that help foster a collaborative community. By incubating strong communities, they help ensure that San Diego is a place where people - and companies - thrive.

We sat down with the Y's President & CEO Baron Herdelin-Doherty to learn about how the YMCA of San Diego County - the second largest Y in the U.S. - helps support the region's dynamic economy.

Tell us about the YMCA
Our Y is driven to help families thrive as we serve more kids and families than ever before. We provide child care resources, financial assistance and active, healthy fitness programming for all ages that reflect our core values of Caring, Honesty, Respect and Responsibility. The YMCA of San Diego County is here for families at each and every stage of their journey. We focus our work in three key areas, because nurturing the potential of kids, helping people live healthier and supporting our neighbors are fundamental to strengthening communities. This year, we have secured new sites and are expanding existing sites to be able support even more families in the years to come. Since 2010, we have secured an incredible $43M in capital campaign contributions alone and we are especially thrilled to be very close to completion on the Copley-Price Family YMCA by the end of 2014. The Y is so much more than a gym. We touch the lives of nearly one out of every eight people in our community. For 132 years, we’ve been proud to help our neighbors learn, grow and thrive. 
YMCA on San Diego's talent pool

What are some advantages to doing business in San Diego?
The communities of San Diego County are so incredibly diverse and we are thrilled to be able to serve all. Throughout San Diego County, countless people know the YMCA. But there’s so much more to our Y than one might think. From exercise to education, from volleyball to volunteerism, from preschool to preventive health, the Y doesn’t just strengthen our bodies. It strengthens our community. We are the second largest Y in the US in part because of our location. San Diego attracts the best and brightest minds. We are able to keep great leaders because of all the attributes of the region.

San Diego is full of dynamic companies, firms and service providers influencing global trends and innovation. Pick another San Diego company that is at the top of its game.
I immediately think of San Diego Gas & Electric (SDG&E). Not only are they committed to energy efficiency but environmental stewardship is an essential part of its culture and day-to-day business. They are vested in the quality-of-life of our region, and they give back and volunteer to improve our communities. For nearly fifteen years, San Diego Gas & Electric has been the exclusive sponsor of the YMCA’s Character Development program, a year-round focus on teaching and demonstrating the core values of Caring, Honesty, Respect and Responsibility in all Y programs.

What do you anticipate for your company in five years?
Research shows that families who spend more time together are stronger and happier. Over the next five years, the Y will focus on strengthening families in even bigger and better ways. The Y is committed to providing the memberships, programs, activities, facilities, and resources to help more families in San Diego County thrive.

 With 20 membership facilities, three overnight camps and multiple locations focused on childcare and youth and family services, we see opportunity to improve our services. We aim to expand to  over 400,000 existing members and program participants, progressively engaging new families among the 3.2 million residents of San Diego County in youth development, healthy living, and social responsibility.  By 2020, we want to have more Y family branch locations within 5 miles of every resident in the region. Additionally, we want every Sunday night to be YMCA Family Night. We will provide tools to help families track how much time they spend together and help them make plans to spend more time together. We hope you’ll engage more deeply with the Y as we officially launch our “Family Strengthening” vision in 2015.

 

The Y- more than you know:

September 19, 2014

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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. Click images to enlarge in a new tab/window.

HIGHLIGHTS

  • As predicted, August marked the rebound from the seasonal effects experienced in the previous two months.
  • At 6.2 percent, San Diego’s unemployment rate fell in August by 0.7 percentage points from July. In addition, unemployment was down 1.5 points from August 2013.
  • San Diego’s unemployment rate was lower than the California average, and returned below the U.S. average.
  • The region gained 3,500 jobs from July to August, and added 34,200 jobs since last year.
  • A booming construction industry added 6,800 jobs since August 2013, a more than 10.8 percent increase over the year.
  • The manufacturing industry added 2,200 jobs since the previous August.
  • Staffing services grew by more than 2.5 percent since last year, indicating demand for hiring services.
  • San Diego’s traded economies continued to drive much of the monthly and annual employment growth.

[Unemployment Chart]

The California Employment Development Department (EDD) released statewide county employment data today for the August 2014 period. At 6.2 percent San Diego County’s unemployment rate dropped 0.7 points from July to August, and fell by 1.5 points from this time last year. The unemployment rate in the region remained lower than California’s average, and returned to below the U.S. average of 6.3. As predicted in previous monthly reports, August began the seasonal decline of the unemployment rate. However, unlike the U.S. jobs report released earlier this month, August’s decline in San Diego was not driven by a lower labor force. In fact, San Diego’s labor force increased by 5,500 from July to August, as 6,600 less people registered as unemployed.

[Employment Chart]

When looking at employment growth, we’ve continued to see positive signs of steady growth, particularly in San Diego’s private sector. From July to August, the region added 3,500 jobs, more than 82 percent of which came from the private sector. The private sector added 2,900 jobs from July to August, a sign of continued economic growth. When looking at overall growth since last August, the region’s economy added 34,200 jobs, a 2.6 percent increase. Meanwhile, the region’s private sector grew by more than 3 percent over that period. With unemployment down and the economy consistently adding jobs, it appears as though many job seekers are finding landing spots as the economy continues to improve, and much of the growth is in middle-to-high paying industries.

[Growth Chart]

San Diego’s traded economies continued to drive much of the region’s employment growth. Professional, scientific and technical services (PST), heavily associated with innovation, added 1,600 jobs since July 2014, which accounted for more than half of private sector job growth since July. PST added 7,800 jobs since August 2013, for an annual growth rate of an impressive 6.2 percent, well above the economy-wide average of 2.6 percent. PST includes subsectors like scientific research and development, which is a key driver of our life sciences. This subsector grew by more than 4.2 percent over the year.

San Diego’s tourism industry began its seasonal decline, losing 2,700 jobs from July to August. However, the industry added 3,600 jobs since August 2013, indicating that the industry is still performing well. Health care and social services was another major contributor, adding 5,700 jobs since August 2013. Combined, PST, Tourism and Health Care accounted for more than half of the region’s annual private employment growth.

San Diego’s goods producing industries continued their steady employment growth. Manufacturing remained flat from July to August, but added a total of 2,200 jobs since August 2013. Meanwhile, the construction industry continued to boom. The industry added 500 jobs from July to August and 6,800 jobs since August 2013, for an astounding 10.9 percent annual growth rate. Combined, the manufacturing and construction industries accounted for more than one quarter of private employment growth from 2013 to 2014.

[Construction Chart]

The August employment report confirmed that much of the negativity that we saw in June and July were simply seasonal effects and not indicative of any negative trend. The recession is clearly in the rear-view mirror and has been for some time. May 2011 was the last month in which San Diego didn’t record a year-over-year job gain. We haven’t even experienced a month-to-month loss in private employment in 2014, an indication of how steadily the economy has been growing so far this year. Finally, the unemployment rate declined as a result of job-seekers finding employment, not job-seekers leaving the labor force, an important sign of a healthy regional economy.

Note: Our Economic Indicators Dashboard will show how our unemployment rate compares to other US metros and the US total rate when that information is released in the coming weeks.

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August 15, 2014

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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. Click images to enlarge in a new tab/window.

[Unemployment Chart]

HIGHLIGHTS

  • July is a historically misleading month, as state and local public education employees are subject to seasonal layoffs.
  • At 6.6 percent, San Diego’s unemployment rate went up again in July, this time by 0.5 percentage points from June. However, unemployment was down 1.4 points from July 2013.
  • San Diego’s unemployment rate was lower than the California average, but climbed slightly above the U.S. average.
  • The region lost 5,900 jobs from June to July, but added 37,200 jobs from the previous year, the highest year over year job growth recorded in 2014.
  • Construction industry employment in July was up more than 11.3 percent from the previous year.
  • The manufacturing industry added 2,200 jobs since the previous July.
  • Staffing services grew by more than 3.3 percent since last year, more than any other professional or business service subsector.
  • Tourism, innovation, construction and healthcare sectors continued to drive much of the monthly and annual employment growth.

[Unemployment Chart]

The California Employment Development Department (EDD) released statewide county employment data today for the July 2014 period. San Diego County's unemployment rate went up from June to July, but fell by 1.4 points from this time last year. The unemployment rate in the region remained lower than California's average, but is now barely higher than the U.S. average (0.1 points higher). As stated in last month's report, a summer rise in the unemployment rate is common, as many students and other seasonal workers begin looking for summer employment, but struggle to find employment, driving up the labor force. The labor force increased by 14,800 from June to July, more than one-third of which found employment. The other two-thirds entered the unemployed category during a season when thousands of state and local educators, among other seasonal employees, are temporarily out of work. While there's no certainty in the future, history tells us to expect the unemployment rate to decline steadily from here on out through the end of the year.

[Employment Chart]

When looking at employment growth, we continue to see positive signs of steady growth, despite a misleading seasonal decline. From June to July, the region lost 5,900 jobs. On the surface, this seems negative until you consider that state and local public education contributed 12,800 lost jobs to the region as a result of seasonal layoffs. The private sector actually added 6,800 jobs, a sign of continued economic growth. When looking at overall growth since last July, the region’s economy added 37,200 jobs, a 2.8 percent increase and the largest annual growth recorded in 2014. Meanwhile, the region’s private sector grew by more than 3.1 percent over that period. Over the same period, San Diego experienced a 1.4 percentage point drop in the unemployment rate and a 17 percent drop in people who identified as unemployed, even with a slight increase in labor force participation.

[PST Chart]

San Diego’s traded economies drove much of the region’s employment growth. Professional, scientific and technical services (PST), heavily associated with innovation, added 2,200 jobs since June 2014 and 6,700 jobs since July 2013, for an annual growth rate of 5.4 percent, well above the economy-wide average. PST includes subsectors like scientific research and development, which grew by more than three percent over the year. PST accounted for nearly one-third of the private employment growth from June to July. San Diego’s tourism industry accounted for more than 39 percent of the region’s private employment growth from June to July, adding 2,700 jobs. In addition, the industry added 6,000 jobs since July 2013. Most of the growth is driven by food service businesses, but arts and recreation businesses also grew by six percent since last year. Health care and social services was another major contributor, adding 6,000 jobs since last July.

San Diego’s goods producing industries continued their steady employment growth. Manufacturing added another 200 employees from June to July, for a total of 2,200 jobs added since July 2013. Meanwhile, the construction industry continues to soar, and not just because of summer seasonal growth. The industry added 1,500 jobs from June to July and 7,000 jobs since July 2013, both of which represent more than 20 percent of private employment growth over those periods. 

[MFG Chart]

When going beyond the basic headlines of job loss and unemployment growth, the July employment report was actually full of good signs for San Diego’s economy. Our private sector economy continued to grow at a steady pace of more than three percent year-over-year. Goods-producing industries like construction and manufacturing continued to add jobs, and our innovation sectors grew well above the normal economic pace. While higher unemployment and overall job loss is concerning, it is very clear that these are simply seasonal trends related mostly to annual public education layoffs.

Note: Our Economic Indicators Dashboard will show how our unemployment rate compares to other US metros and the US total rate when that information is released in the coming weeks.

July 18, 2014

[Banner]

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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. Click images to enlarge in a new tab/window.

[Quote]

HIGHLIGHTS

  • At 6.1 percent, San Diego’s June unemployment rate went up 0.3 percentage points from May, but down 1.7 points from June 2013.
  • San Diego’s unemployment rate was lower than the U.S. and California averages.
  • The region added 9,700 jobs from May to June, and 34,600 jobs from the previous year.
  • Construction industry employment in June was up more than 8.4 percent from the previous year.
  • The manufacturing industry added 2,400 jobs since the previous June.
  • Tourism and Innovation sectors continued to drive much of the monthly and annual employment growth.

[Unemployment Chart]

The California Employment Development Department (EDD) released statewide county employment data today for the June 2014 period. San Diego’s unemployment rate went up from May to June, but remained lower than California and U.S. averages. Historically, a rise in the unemployment rate is common in June, as many students and other seasonal workers begin looking for summer employment, thus driving up the labor force. The labor force increased by 3,200 from May to June. Meanwhile, total unemployment increased by 3,900, presumably comprised mostly of those entering the labor force. This trend is expected to continue throughout the summer, but is typical both historically and across the country.

[Employment Chart]

When looking at employment growth, we continue to see positive signs of steady growth. From May to June, the region added 9,700 jobs, more than 90 percent of which came from the private sector. When looking at growth since last June, the region’s economy added 34,600 jobs, a 2.6 percent increase. Meanwhile, the region’s private sector grew by more than three percent over that period. Over the same period, San Diego experienced a 1.7 percentage point drop in the unemployment rate and a 19 percent drop in people who identified as unemployed (after adjusting for lower labor force participation).

San Diego’s innovation sectors drove much of the region’s employment growth. Professional, scientific and technical services (PST) added 1,400 jobs since May 2014 and 6,800 jobs since June 2013, for an annual growth rate of 5.5 percent, well above the economy-wide average. PST accounted for more than 20 percent of the annual private employment growth—more than any other sector. The region’s maritime industry also experienced significant growth, with the ship and boat building sector growing 6.8 percent over the year.

[PST Chart]

San Diego’s tourism industry accounted for more than 34 percent of the region’s private employment growth from May to June, adding 3,000 jobs. In addition, the industry added 5,700 jobs since June 2013, with most of that growth coming from the food service industry. Health care and social services was another major contributor. The sector added 1,100 jobs since May and 5,700 jobs since last year.

San Diego’s goods producing industries continued their steady employment growth. Manufacturing employment has been rocky, but steadily grew year-over-year for more than five years. From June 2013 to June 2014, the industry added 2,400 jobs for about a 2.5 percent growth rate. Since June 2010, the industry has added more than 3,600 jobs. Meanwhile, the construction industry continues to soar. From June 2013 to June 2014, the industry added 5,200 jobs, about 8.5 percent growth. 

[MFG Chart]

While again this month’s job growth was led by only a few sectors, it’s important to note that most key industries have grown steadily from the previous year. Additionally, the sectors that drove the employment growth this month are either from our traded economies or are middle-to-high wage jobs in the region. For instance, employees in the PST industry make on average more than $100,000 per year. Manufacturing employees make more than $75,000 per year, more than 40 percent above the region’s average annual wage. High wage jobs help support other sectors in the economy by circulating more dollars throughout the economy. Therefore, consistent growth in these sectors is important for the economy as a whole.

Note: Our Economic Indicators Dashboard will show how our unemployment rate compares to other US metros and the US total rate when that information is released in the coming weeks.

July 15, 2014


The ‘World’s Smartest Company’ just made one of the world’s smartest decisions. Today, genomics pioneer Illumina announced its plans to expand in San Diego.  With the help of EDC, the City of San Diego has announced an agreement that will help keep the biotech company and hundreds of high-paying jobs in San Diego. The City will provide a tax rebate in exchange for the retention and creation of 300 well-paying jobs.

This is a perfect example of how San Diego can support middle class jobs while also encouraging economic growth,” said Mayor Faulconer. “This agreement keeps hundreds of high wage jobs in San Diego, ensures city residents benefit from over a million dollars in annual sales tax revenue, and strengthens our region’s leadership in biotechnology.”

The announcement was made today at press conference at Illumina’s headquarters with CEO Jay Flatley, City of San Diego Mayor Kevin Faulconer,  Council President Pro Tem Sherri Lightner and EDC President and CEO Mark Cafferty. The City Council will now vote to ratify the agreement during the week of July 21.

Founded in 1998 with 15 employees, Illumina now has 3,000  employees – 1,500 which are in San Diego –   with offices in virtually every continent. The innovator has also emerged as one of the most important companies in the global biotech field. Earlier this year, they became the first company to sequence the human genome for under $1,000 a person, making one of the most significant strides in personalized medicine in the past decade. That’s one of the reasons Illumina was recently named “World’s Smartest Company” by MIT Technology Review, ahead of Tesla Motors, Google and Samsung.

“We’re excited to continue to grow a state-of-the-art campus that will not only contribute to Illumina’s success, but also contribute to the growth of San Diego’s life sciences community, to the advancement of genetic research, and ultimately to help people around the globe realize the benefits of personalized medicine,” said Jay Flatley, Illumina’s CEO.

“The fact that the ‘World’s Smartest Company’ has decided to expand its footprint in San Diego speaks volumes to the quality of our biotech industry and innovation economy,” said Mark Cafferty, president and CEO of EDC. “Not only do we have a Mayor that values economic development and job creation, but we also have a cutting-edge company showing how much they value San Diego’s dynamic workforce, manufacturing expertise and research capabilities.”

After an initial meeting with Illumina,  Mark Cafferty called Mayor Faulconer to express his concerns about Illumina expanding outside the region. Within 24 hours, Mayor Faulconer had cleared his schedule to sit down with key Illumina stakeholders to discuss the innovator’s growth plans. 

Like most of San Diego’s successes, collaboration helped us get to this point. Cushman & Wakefield’s Steve Rosetta and Former EDC Board Chair Stath Karras were able to spot a need to engage with Illumina early on in this process.  BIOCOM, Go-BIZ and partners at the State of California were also involved in guiding Illumina’s decision. Another EDC Board Member David Hale, considered one of the godfathers of biotech in San Diego, had flagged Illumina as the “next big thing.” All bets are, David is right.

As San Diego works to tell its innovation story to the rest of the world, we can look to Illumina as a strong global company. They have chosen to stay in San Diego because of the collaboration between the City and other partners as well as the strong talent pool that exists here. They are in England. They are in Brazil. They are in the UK. They are in Japan. But at the end of the day, they are headquartered in San Diego. And that’s the story we need to continue to tell.

U-T has more.

June 20, 2014

This post is part of an ongoing monthly blog series dedicated to the California Employment Development Department (EDD) monthly employment release. Click images to enlarge in a new tab/window.

[Unemployment Chart]

The California Employment Development Department (EDD) released statewide county employment data today for the May 2014 period. San Diego's unemployment rate continued to decline from April to May, with the rate now down to 5.8 percent, the lowest it has been since May 2008. Unlike the major decline in April (read the full report here), the decline in May came without a drop in the region's labor force. From April to May, 3,000 joined San Diego's labor force, while the region experience a 3,800 person drop in civilian unemployment. Where last month's unemployment rate free fall was somewhat alarming, this month's decline appears to be a good sign for the economy. The region's unemployment rate is now below the national rate and remains well below the California rate.

The region added 5,100 jobs from April to May, 4,800 of which were in the private sector, which is another healthy sign for steady economic growth. Potentially more noteworthy, the region's economy added 29,300 jobs from May 2013 to May 2014, a 2.2 percent increase. The region's private sector grew by 2.5 percent from May 2013 to May 2014, a number roughly in the middle of expectations of the region's leading economists. As of May 2014, the region had 1,342,700 non-farm jobs, more than 82 percent of which were in the private sector.

[Construction Chart]

San Diego's goods producing industries continued their steady employment growth. Construction was up more than 1.5 percent from April to May, adding 1,000 jobs to the region. From May 2013 to May 2014, the construction industry has added 5,100 jobs, an 8.5 percent increase. Manufacturing growth has been a bit slower, but still steadily increasing, which is a great sign for the industry. From April to May, the manufacturing industry added 100 jobs. The industry added 1,700 jobs from May 2013 to May 2014.

As the region ramps up for summer tourism and convention season, the leisure and hospitality industry led most of the growth from April to May, adding 3,900 jobs to the economy, as expected. The industry was also up 3.7 percent from May 2013. Most of this month's growth came from the region's food services and drinking places. Health care and social assistance was the only other significant job creating industry from April to May, adding 1,000 jobs over the month period. 

[PST Chart]

The professional, scientific and technical services sector dropped by 700 jobs from April to May, but these monthly ebbs and flows are common in the industry, and we expect the industry to grow in the near future. From May 2013 to May 2014, the sector added 5,800 jobs, a 4.7 percent increase, which is among the highest growth sectors in San Diego over that period. Other significant growth sectors over the annual period include scientific research and development services sector and the region's retail and wholesale trade sectors. The former added 1,400 jobs while the latter combined to add 3,500 jobs.

While this month's job growth was led by only a few sectors, it's important to note that most key industries have grown steadily from the previous year. Additionally, the sectors that drove the employment growth this month are either from our traded economies, like tourism, or are leading indicators for strong economic growth, like construction and manufacturing. It is also positive to see the region's unemployment rate continue to fall while adding people to the labor force.

Note: Our Economic Indicators Dashboard will show how our unemployment rate compares to other US metros and the US total rate when that information is released in the coming weeks.

June 19, 2014

Today, the Brookings Institution released its first-ever metro-level analysis of foreign direct investment’s role in the San Diego metropolitan area’s economy as part of its Global Cities Initiative, a joint project of the Brookings Institution and JPMorgan Chase. The report analyzes the types of foreign-owned businesses located in the San Diego metropolitan area, outlines the region’s sources of foreign investment and shows that 48,370 jobs are supported by FDI locally.

The research finds that San Diego has seen a steady climb in its FDI ranking, which is based on the top 100 most populous metropolitan areas in the US. In 1991, San Diego ranked 31 on the list with 25,600 jobs in foreign-owned establishments (FOE). In 2011, the region ranked 24th with 48,730 jobs, signifying more than a 90 percent increase in the number of jobs in FOEs in a 20 year period. Other key finds specific to the San Diego region are bulleted out below:

  • Industries with the highest concentration of jobs in FOEs include precision instruments (unmanned systems, medical devices), grocery stores and semiconductors
  • The largest share of jobs by FOE were created from mergers and acquisitions (36 percent)
  • FOEs have become more goods-intensive. The most recent data shows that 2011 was the first time more jobs in FOEs were concentrated in goods as opposed to services
  • Tokyo (13 percent) followed by London (12.1 percent) are the top sources of FDI by city

Since April 2014, San Diego has been part of a Global Cities Initiative pilot program to create and implement metropolitan plans to secure and sustain FDI. The FDI in U.S. Metro Areas report will help the region’s Global Cities Initiative team – comprised of leadership from the City of San Diego, San Diego Regional EDC, BIOCOM and Qualcomm – design its plan to maximize the amount, quality and economic benefits of FDI in the region and integrate FDI into an overall smart economic global trade and investment strategy.  San Diego is one of two cities - and the only in California - that Brookings selected to publish and develop its FDI plan.

“San Diego is global city,” said Mark Cafferty, president and CEO of San Diego Regional EDC. “It’s no coincidence that our top two FDI-generating cities– Tokyo and London – are also the two direct international flights out of San Diego. This report gives the San Diego region a key resource to take full advantage of this important economic development tool.”

 

While the United States remains the world’s top destination for foreign investment, its position has been steadily eroding. Between 1999 and 2012, the U.S. share of global FDI inflows dropped from a high of 26 percent to just 12 percent. However, metropolitan areas are the country’s strongest magnets for global investment and so understanding the San Diego metro area’s FDI starting point will help the region fully leverage FDI to advance its economic development.

Brookings Panel in Seattle

According to the Brookings report, the benefits of FDI extend well beyond the millions of jobs supported. For example, U.S. affiliates of foreign companies pay well above average wages. These companies strengthen U.S. trade, producing more than one-fifth of all U.S. goods exports. Additionally, nineteen percent of all corporate R&D expenditures in the United States come from foreign-owned companies. Finally, 48 percent of total FDI flows in 2012 went to manufacturing industries, shoring up the nation’s eroding production base.

While metro areas have traditionally focused on attracting greenfield investment, this new data shows that most FDI enters regions through mergers and acquisitions. In the average year, mergers and acquisitions account for 87 percent of all FDI inflows into the United States. These investments have significant economic potential—for example, cash infusions can help local businesses expand, and new access to global distribution networks can boost exports.

“This new data allows U.S. metro areas, for the first time, better grasp FDI sources and trends, and its impact on local economies,” said Brad McDearman, Brookings fellow and director of metro trade and investment. “As part of the Global Cities Initiative, San Diego is now at the forefront of U.S. metro areas seeking to position themselves as more globally fluent and competitive regions by developing a metropolitan global trade and investment plan.”

Next week, leaders from San Diego will travel to Louisville, Ky. to take part in a Global Cities Initiative panel. 

May 29, 2014

On May 28, U.S. Secretary of Commerce Penny Pritzker announced the first 12 communities that have been selected to participate in the Investing in Manufacturing Communities Partnership (IMCP). Joining forces with many partners across the region, San Diego is included in the Southern California Designation, which was led by a team out of the University of Southern California Center for Economic Development.

The IMCP program is an initiative designed to revolutionize the way federal agencies leverage economic development funds by encouraging communities to develop comprehensive economic development strategies that will strengthen their competitive edge for attracting global manufacturing and supply chain investments.

“The 12 Manufacturing Communities announced today represent a diverse group of communities with the most comprehensive economic development plans to attract business investment that will increase their competitiveness,” said U.S. Secretary of Commerce Penny Pritzker. “IMCP is a critical part of our ‘Open for Business Agenda’ to strengthen the American manufacturing sector and attract more investment to the United States. Innovative programs like IMCP encourage American communities to work together to craft  strong, clear, strategic plans to attract manufacturing investment and jobs to transform themselves into globally competitive commercial hubs.”

So what exactly does this mean for San Diego and the Southern California region? As home to the world’s largest concentration of military personnel and with more than 80 percent of the state’s aerospace workers, the Advanced Manufacturing Partnership of Southern California Manufacturing Community (AMP SoCal) will concentrate on further transforming the aerospace and defense industry. Home to companies including Northrop Grumman, the Southern California region is positioned to be in the vanguard of  future avionics and aerospace industries.

Of course, you can’t become a leader in aerospace and defense without the workforce to get you there. Part of the strategy will involve a significant workforce training component that will partner with local colleges and universities to streamline certificate programs. The strategy also focuses on building a supplier network, research and innovation, infrastructure and site development. The strategy will also focus on creating an export acceleration workshop, which dovetails nicely into the Global San Diego Export plan, which was released in conjunction with the Brookings Institution this year.

On the local front, the partnership involves the City of San Diego, CONNECT, UC San Diego, Cleantech San Diego, San Diego East County Economic Development Council, San Diego Workforce Partnership and San Diego Regional EDC.

Following the success of last year’s MFG Day, on Oct. 3, many of the partners listed above will team up with local companies as they open their doors to the public to showcase an industry that supports nearly 90,000 local jobs. Stay tuned for more details.

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May 16, 2014

This post is part of an ongoing monthly blog series dedicated to the California Employment Development Department (EDD) monthly employment release.

2014_04_Unemployment

The California Employment Development Department (EDD) released statewide county employment data today for the April 2014 period. The big headline in this month’s report is that San Diego County's unemployment rate has dropped nearly a full percentage point, down to 6.0 percent from 6.9 percent in March 2014 and 7.2 percent in April 2013. While this number appears encouraging, it is also noteworthy that the labor force lost 25,000 workers. This is the single largest month-to-month drop in the labor force on record (since 2000), and the lowest the labor force has been since October 2011. Meanwhile, the economy added 2,900 nonfarm jobs from March to April, which makes this month's report particularly perplexing. 

There are several possible explanations for this drastic decline in the labor force. First and most commonly, many long-term unemployed have simply given up looking for work or found work outside of the San Diego region. This most likely explains the 16,000 unemployed who exited the labor force. There may also have been less people who decided to enter the labor force, possibly out of lack of confidence in employment opportunities or lack of relevant skills. However, we also saw 9,000 employed persons leave the labor force, presumably because of a combination of retirements, seasonal exits and moves to other regions. It is not uncommon to see the labor force seasonally decline from March to April, just not to this magnitude. 

2014_04_LF

It appears contradictory that despite this massive labor force decline, the economy actually added jobs. It is worth noting that from February to March, the economy added 12,400 jobs while the labor force lost 11,200 workers. This is likely due to a discrepancy in the surveying, since labor force numbers come from household surveys and job numbers come from surveys of businesses. It is also possible that those who were employed found second jobs. The result is likely a mix of all of these factors, which leaves us with an unusual report for April.

As noted, the economy added 2,900 jobs total from March to April 2014. The private sector outperformed by adding 3,400 jobs in the month, with government job decline accounting for the 500 less jobs. Service providing industries added most of the jobs, while we saw job losses from the goods producing industries like construction and manufacturing.

2014_04_Total

The job picture looks even more promising when compared to last year. From April 2013 to April 2014, the economy added 29,000 jobs, a 2.2 percent increase. The private sector added 26,600 jobs over the year and we saw positive growth in the manufacturing and construction industries, which added 1,100 and 4,300 jobs, respectively. The 4,300 construction jobs added constitutes a 7.2 percent increase over the year. We also saw growth in our important traded economies, with leisure and hospitality adding 4,300 jobs and professional, scientific and technical services adding 6,200 jobs.

We will likely need to wait until future job reports to determine if this unusual report is an anomaly or an indication of larger trends. Historically, we have seen the labor force continue to decline or remain relatively flat from April to May, but with the recent major change in labor force amidst job creation, we may see people coming back to the labor force in the coming months.

Our Economic Indicators Dashboard will show how this compares to other US metros and the US total rate when that information is released in the coming weeks.