San Diego’s Economy
From life sciences to military and defense, explore the interactive dashboard below and learn more about the makeup of San Diego’s economy. For additional information regarding the dashboard, please see the Traded Clusters Technical Note. Interested in more industry-specific info? Visit our Industry Profiles.
REGIONAL JOBS (2021)
GROSS REGIONAL PRODUCT (2022)
MEDIAN HOUSEHOLD INCOME (2021)
Every quarter, San Diego Regional EDC analyzes key economic indicators that are important to understanding the economy and the region’s standing relative to the 25 most populous metropolitan areas in the U.S.
In this issue covering Q4 2023, we report on commercial real estate, potential growing housing supply, and venture capital funding—including a full-year picture.
Thank you to our sponsor Verizon Wireless
EDC explains the data:
Office and industrial real estate utilization fall for sixth straight quarter. In Q4, the region experienced sharp increases in negative net absorption of 441,867 sq. ft. in office space and 525,516 sq. ft. in industrial space. These declines mark the sixth consecutive quarter of negative net absorption. The office market ended 2023 with an additional 1.5 million sq. ft. of unoccupied space, bringing the total amount of vacant office space to more than 10.5 million sq. ft. In response, construction activity has generally declined in both office and industrial, most especially office where we see high interest rates and remote work trends continue post-pandemic.
In 2023, the number of housing construction permits reached its highest level since 2005. In Q4 alone, 3,500 housing construction permits were issued in San Diego, totaling 11,468 permits for 2023 and beating the average 8,635 permits granted annually since 2004. This was driven primarily by permits for five or more units, at almost 8,000 permits, while permits for one to four units decreased compared to 2022. Despite an increase in permitting activity, affordability remains woefully low. In fact, only one in nine households in San Diego can now afford the median home price, which reached $931,600 in Q4.
More deals and more dollars in Q4. VC funding in Q4 was split almost equally between San Diego tech and life sciences companies, at $526 million and $570 million respectively, while the consumer companies raised $9 million. This brought the region’s total in Q4 to $1.1 billion, $134 million more than Q3. Making up more than half of Q4’s tech funding, Shield AI secured the region’s largest deal to buildout its AI pilot for autonomous aircraft systems. Overall, San Diego saw a total of $3.9 billion in funding across 182 deals in 2023, $1.9 million short from 2022, but ranking fifth in total VC funding among all U.S. metros.
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 innovation 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 nearly 1,000 firms in the San Diego region focused exclusively on cyber, with nearly 26,000 total impacted jobs. 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 has a deep history in San Diego’s innovation economy, contributing for nearly half a century to global advances in pharmacology, genomics, and medical device manufacturing. Seeded by globally-renown research institutions, and fueled by private and public investment, San Diego has grown into one of the top three Life Sciences markets in the world. 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 3,679 manufacturing establishments currently supporting more than 116,397 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.