San Diego’s Economy
From life sciences to military and defense, learn more about the makeup of San Diego’s economy below. Interested in more industry-specific info? Visit our Industry Profiles.
REGIONAL JOBS (2021)
GROSS REGIONAL PRODUCT (2021)
MEDIAN HOUSEHOLD INCOME (2021)
Every quarter, San Diego Regional EDC analyzes key economic indicators that are important to understanding the regional economy and the region’s standing relative to the 25 most populous metropolitan areas in the U.S.
In this edition of the Economic Snapshot covering Q3 2022, we report on workforce training resulting in positive employment trends, Life Sciences industries attracting Venture Capital, and office and industrial space becoming unoccupied at a faster pace across the San Diego region.
Sponsored by Torrey Pines Bank
EDC explains the data:
San Diego has recovered pandemic-related job losses overall, but some industries still lag. Manufacturing employment remains 6,200 jobs below pre-pandemic level, yet growth in manufacturing jobs far outpaces that of California and the U.S. The region’s unemployment rate dropped 0.1 percent from last quarter to 3.1 percent. Persistent talent shortages have resulted in large sums of public funding for workforce training; as an example, the San Diego Workforce Partnership was recently recently granted $10 million for training in emergency and healthcare services.
Funding into San Diego cooled off. The region pulled in $1.08 billion in VC funding in Q3, with half ($549 million) going to Life Sciences. The region’s Life Sciences firms lead in VC funding, and increasingly turn to artificial intelligence and machine learning to accelerate scientific advancement. RayzeBio was the largest recipient with $160 million to advance cancer radiopharmaceuticals. On the technology side, Hone, a local startup that provides an online training platform with live instruction aimed at boosting worker retention, raised $29.3 million.
Q3 experienced higher vacancy and lease rates for both office and industrial space. Net absorption of industrial space was negative for the first time since the beginning of the pandemic. However, San Diego is also experiencing strong demand for industrial space—driving up asking rent prices as construction continues to slow. While office space also saw an increase in vacancies, asking rent prices reached a record high of $3.24 per square foot. Higher costs may be the deciding factor for companies considering adopting permanent remote or hybrid work arrangements that reduce their need for office space.
scroll over the interactive graphics below to learn more.
With breakthrough technology companies and research organizations, the largest military concentration in the world and a strong tourism industry, the San Diego region has one of the most dynamic economies in the country. The below profiles take a deep dive into the industries that make San Diego the innovation hub that it is, with data on employment, businesses, wages, and more.
Aerospace has a long history in San Diego, dating back to the early 1900s when Ryan Airlines built the Spirit of St. Louis and Reuben Fleet brought Consolidated Aircraft Corporation to Lindbergh Field. Since then, San Diego’s aerospace industry has been an integral part of the region’s—and the world’s—economy. See the Industry Profile.
The San Diego cleantechnology industry is a collaboration between public, private, and academic organizations working together to deploy IoT technologies and advance urban connectivity to reduce greenhouse gas emissions, increase water and energy efficiency, and drive economic growth in the San Diego region. See the Industry Profile.
San Diego has emerged as a leader for the development of cybersecurity technology and the delivery of cyber-related services. The region’s healthy ecosystem, including its strong military presence, world-class academic institutions, incubators and strong partnerships between industry associations and governments, has positioned San Diego as a hub for cyber operations. Today, there are more than 150 firms in the San Diego region focused exclusively on cyber. See the Industry Profile.
San Diego’s defense cluster is critical for the region’s innovation and military economies, and ultimately, to the United States’ national security priorities. San Diego is home to the largest concentration of military assets in the world and the largest federal military workforce in the country. When considering the overall ripple effects of the defense cluster in San Diego, about 20 percent of San Diego’s gross regional product (GRP) is the result of defense-related spending. Jobs supported as a result of defense spending include uniformed military, federal government employees, and defense contractors, as well as employees in healthcare, engineering, construction, hospitality, and tourism. See the Industry Profile.
The life sciences cluster is a major driver of San Diego’s innovation economy. Major pharmaceutical companies including Eli Lilly, Pfizer, and Takeda maintain a presence in San Diego to foster collaboration with major research institutes, universities, and small biotechnology companies. See the Industry Profile.
The San Diego region is home to a vibrant manufacturing cluster that spans many industries, including defense, aerospace, shipbuilding and repair, medical devices, craft brewing, and sports and active lifestyle industries. With a highly-skilled workforce, robust training programs, and close proximity to Mexico, San Diego is a hub for advanced manufacturing companies, with more than 3,360 manufacturing establishments currently supporting more than 42,485 jobs. See the Industry Profile.
With more than 3,100 software establishments and 80 research institutions in the region, the technology industry is a major driver of the innovation economy in San Diego. The research institutes—along with UC San Diego, San Diego State University, and other major universities—provide the sector with breakthrough technologies that fuel company growth and product development. These unique assets, combined with one of the most talented labor forces in the world, make San Diego one of America’s most innovative markets. See the Industry Profile.
A world leader in wireless technologies, San Diego companies are driving local and global innovation that keep us all connected. Founded in San Diego in 1985, Qualcomm invented technologies at the heart of 3G and 4G wireless and the first smartphone, and continues to pioneer new technologies that range from 5G to artificial intelligence, and more. See the Industry Profile.
With more than 70 miles of coastline, state of the art hotel and convention spaces, and an array of entertainment options throughout the region, San Diego is positioned as one of the top visitor and convention destinations in the world. Dubbed by Fodor’s as a “vacationer’s paradise” and by the U.S. Weather Bureau as “the closest thing to perfect weather in America,” San Diego’s world-class waterfront and award-winning international airport make it accessible from destinations across the globe. See the Industry Profile.
Why San Diego?
Situated next to the busiest land port of entry in the Western hemisphere, San Diego is home to more than 3.3 million people and offers incomparable opportunities for business of all sizes to thrive.
From sequencing the human genome to inventing the next wave of 5G technology, San Diego has the talent and expertise to change the world—and the numbers to back it up.
EDC provides research and data to local companies, site selectors, and civic leaders to help them make well-informed decisions about our economy. For those companies outside of the region considering San Diego for expansion or relocation, EDC provides a variety of assistance including responding with formal proposals (RFPs) to professional site selectors.
EDC Deep Dives
A note about our research
EDC currently does not endorse specific ballot measures or candidates. From time to time, we provide objective research on the economic impact of specific measures or proposals to better inform the public and policymakers on a project’s potential economic impact. If you are interested in working with EDC on customizable research, contact us.