Last summer, 20 San Diego-based companies were selected to participate in World Trade Center (WTC) San Diego’s export assistance program—MetroConnect. Participants were equipped with a $10,000 grant and programmatic resources over the course of a year, with the intent of helping them access international markets and boost export sales.
The companies in MetroConnect Year 4 collectively generated a net increase of $69.6 million in exports sales, signed 369 international contracts, and opened 10 new facilities overseas. Together, these participating companies also added 97 jobs right here in San Diego–evidence that exporting can make businesses more dynamic and resilient back home.
After collecting initial results from this year’s cohort, WTC San Diego formed a MetroConnect Judging Committee to determine which four companies would be invited back to compete in the MetroConnect Grand Prize PitchFest. On November 13, the pitch competition will award one company an additional $35,000 and deemed the grand prize winner of MetroConnect Year 4.
A San Diego staple served at street fairs for years, the almond-based, gluten-free, Non-GMO and vegan sauce is great for veggies and a spread. Now available at retailers in San Diego and beyond.
An engineering and manufacturing company producing state-of-the-art material handling equipment for a multitude of industries including military, oil, mining, energy, and more across the globe.
Manufacturer and developer of long-range acoustic hailing devices, mass notification, and distributed messaging systems, which allow users to clearly communicate warnings and instructions, resolve uncertain situations, and enhance safety in a variety of applications for defense, law enforcement, and more.
Who: 200+ attendees primarily within San Diego’s international business community (exporting companies, service providers, trade organizations, program stakeholders)
Why: This event marks the finale of MetroConnet 2018-2019 program. The audience and a judging panel (50/50 split) will vote for the grand prize winner to receive a $35,000 check, courtesy of JPMorgan Chase
Following the pitch competition, there will be a company showcase and reception at Farmer & the Seahorse. Learn more and get tickets for the event here.
In an effort to address San Diego’s soaring cost of living, San Diego Regional EDC and its Inclusive Growth Steering Committee of 40 employers officially endorsed a regional goal to create 75,000 newly thriving households by 2030. Driven by the findings in EDC’s latest study release, this regional goal and accompanying set of recommendations aim to address key factors (housing, transportation, and childcare) impacting San Diego’s affordability crisis – the last of three main goals of a regional Inclusive Growth agenda.
“While San Diego’s affordability crisis impacts everyone in the region, it has a disproportionate and devastating impact on African American and Hispanic communities,” said Mark Cafferty, president and CEO, San Diego Regional EDC. “The lack of affordable housing is a significant part of the problem, but those impacted are also the same residents who are dealing with the longest commute times, childcare deficits, limited connectivity to public transportation, and other barriers that make access to high-wage, high-skilled jobs particularly more difficult and burdensome.”
ADDRESSING SAN DIEGO’S AFFORDABILITY CRISIS In its new study, EDC found that the majority of household incomes in San Diego do not meet the region’s expected cost of living ($96,000 annually for owner-occupied households and $61,000 annually for renter-occupied households). The cost of housing – twice the average among U.S. metros – is the primary driver of the region’s growing cost of living, pushing residents further away from job centers and resulting in longer commute times and increased cost of transportation.
Additional key findings include: • Affordability:San Diego is 47 percent more expensive than the average U.S. metro. • Housing:Half of all homeowners do not earn enough to cover their cost of living, and nearly 60 percent of all renters fall thousands of dollars short each year. • Transportation: The average household spends more than $14,000 on transportation and travels nearly 20,000 miles over the course of a year. • Childcare: There are now nearly twice as many children under the age of six with working parents as there are licensed childcare spaces available.
With the fifth highest median home price, staggering commute times for its poorest residents, and substantial childcare shortages, San Diego’s high cost of living not only impacts the region’s existing workforce, but also the pipeline of future talent.
“It is becoming more challenging to recruit talent from out of the San Diego region because San Diego is not an affordable place to live. This is especially true in higher education where many competitors for talent are in low-cost college towns,” said Thom Harpole, human resources director, San Diego State University. “Salary and benefits packages alone are not adequate to address the problem. Affordability in San Diego must be addressed to ensure the health of our communities and the success of our organizations in delivering on their missions.”
If the region’s housing, transportation, and childcare costs continue to rise at this rate, San Diego will no longer be an attractive place to live or work. To address this affordability crisis, the Inclusive Growth Steering Committee has endorsed a regional goal of creating 75,000 newly thriving households by 2030. To meet this new regional goal, San Diego must increase the proportion of households that can afford the region’s true cost of living from 47 percent to 55 percent. This means more housing, more transportation options, and more childcare. It also means growing household incomes through the local development of skilled workers and creation of more quality jobs.
“San Diego’s cost of living significantly impacts our ability to attract and retain talent from other destinations,” said Clifford “Rip” Rippetoe, president and CEO, San Diego Convention Center Corporation. “We need to be creative to compete. We work to make sure that all of our employees have the opportunity to thrive in San Diego.”
The Inclusive Growth Steering Committee has recommended that employers support the regional goal through the following actions: 1. Transparency – understand the impacts that lack of affordability has on existing workforce and talent pipeline. 2. Engagement – participate in public policy dialogue around infrastructure development to address the region’s affordability challenges. 3. Investment – invest in programs and projects that help ameliorate cost of living pressures on workforce.
Employers that have officially endorsed this goal and recommendations include San Diego State University, San Diego Convention Center, Booz Allen Hamilton, Cox Communications, Northrop Grumman, and more. For a complete list of employers committed to this effort, visit the new interactive web study.
EDC’S INCLUSIVE GROWTH INITIATIVE In 2018, EDC launched a data-driven, employer-led initiative focused on promoting inclusive growth as an economic imperative. Together with its Inclusive Growth Steering Committee, EDC has set collaborative regional goals, endorsed actionable recommendations for accomplishing them, and will continue to monitor its regional progress towards building a strong local talent pipeline, equipping small businesses to compete, and addressing San Diego’s affordability crisis.
For more information about the Inclusive Growth initiative, visit inclusiveSD.org. Join the conversation at #inclusiveSD.
Each month the California Employment Development Department (EDD) releases employment data for the prior month. This edition of San Diego’s Economic Pulse covers August 2019. Check out EDC’s research bureau for more data and stats about San Diego’s economy.
The region’s unemployment rate was 3.4 percent in August, down from a revised 3.6 percent in July 2019, and below the year-ago estimate of 3.5 percent..
The region’s unemployment rate remains lower than both the state and national unemployment rates of 4.2 percent and 3.8 percent, respectively
Construction (up 2,900) added the largest number of jobs over the month, with gains centered in speciality trade contractors(up 1,800)
Between August 2018 and August 2019, total nonfarm employment increased from 1,485,300 to 1,512,700, adding 27,400 jobs.
Government (up 8,400) followed by professional & business services(up 6,600) led job growth during the past year
In an effort to provide residents with increased access to high-demand jobs, San Diego Regional EDC launched Advancing San Diego, a $3 million local investment initiative underwritten by JPMorgan Chase. The program will align industries with economic development, workforce development and education systems.
“Talented and skilled workers are integral for a strong economy,” said Mark Cafferty, president & CEO at San Diego Regional EDC. “With and through our program partners and stakeholders, we are establishing a first-of-its-kind, employer-led initiative that will measure and aggregate workforce needs while also indentifying solutions that align and strengthen our local education systems. We need to ensure that the benefits of our region’s growing innovation economy are reaching all San Diegans.”
Advancing San Diego will establish nine working groups that are designed to give employers a collective voice about talent needs in priority industries, ranging from software and technology to marketing, healthcare and more. In the first report, 17 participating employers expressed a projected need for more than 7,200 additional software-related positions over the next three years.
The Advancing San Diego initiative In April 2019, San Diego was one of five cities to receive a $3 million investment as part of JPMorgan Chase’s AdvancingCities Challenge, an initiative to drive inclusive growth and create greater economic opportunity across the U.S. Advancing San Diego is a collaborative program by San Diego Regional Economic Development Corporation, the City of San Diego, San Diego Workforce Partnership, United Way of San Diego, and San Diego & Imperial Counties Community College Association (SDICCCA).
As San Diego’s economy continues to expand, employers are seeing an increased demand for skilled workers. While San Diego strives to attract and retain talent, it must also look inward to build a workforce that meets demands for current and future jobs. EDC and its Inclusive Growth Steering Committee of 40 employers have endorsed a regional goal to double the number of skilled workers produced in San Diego County to 20,000 per year by 2030. This requires strong, effective learning programs offered by community colleges and other education institutions.
The goals of Advancing San Diego are to:
Engage employers in a structured process to collectively communicate talent needs
Identify education programs that are aligned with industry needs
Increase the pool of diverse, skilled talent in San Diego
Expand access to talent pipelines for small companies
“By 2020, nearly two of every three jobs in the U.S. will require a credential or degree, and currently, 90 percent of our students remain in San Diego after graduation,” said Dr. Sunita “Sunny” Cooke, superintendent & president at MiraCosta Community College District. “Community colleges play a critical role in creating a diverse talent pipeline for the region. The Advancing San Diego program willhelp connect the work occurring within local community colleges to ensure we offer innovative curricula that support employer needs and include opportunities for students to apply their learning in workplace settings so graduates are ready for employment.”
Education systems that are aligned with results set forth by the working groups will be listed as ‘preferred providers’ by Advancing San Diego. This designation rewards higher education students with priority access to work-based learning and engagement opportunities via networking events, career and internship fairs, and local company tours. To learn more and become a ‘preferred provider,’ educators are encouraged to apply at advancingSD.org.
Additionally, businesses with fewer than 100 employees make up 98 percent of San Diego firms, and on average, are challenged to compete with larger employer wages. As part of EDC’s inclusive growth strategy, more than 35 employers (and counting) have endorsed a regional goal to create 50,000 new quality jobs within small businesses by 2030. To further engage small businesses, nearly half of the funding for Advancing San Diego will be used to subsidize internships within small businesses and offer additional services that support student success in the workplace.
“Start-ups like LunaPBC are rich with mission, purpose, and the opportunity for personal and professional growth,” said Dawn Barry, co-founder & president at LunaPBC. “Unlike large employers, startups are often lower on salary, but offer exciting equity and the opportunity to experience first-hand what it’s like to build an enterprise. When large employers work together with smaller employers, and pursue partnerships with incubators and accelerators, higher education and regional development teams, we strengthen our collective visiblity as a region for career development.”
Report: Demand for Software Talent and Criteria for ‘Preferred Providers’ Working group members were asked to provide hiring projections along with skills and competency requirements for critical jobs, in order to identify programs that align with industry needs. Collectively, these results were compiled into the Demand for Software Talent Report and will create a criteria for ‘preferred providers’ of software – a designation by employers that demonstrates an education program is providing adequate training for software engineers.
Companies that contributed to this report represent industries with the highest proportion of software talent in San Diego, including tech, life sciences, healthcare and defense. Based on the participation of 17 employers who collectively employ approximately 53,000 people and share a need for software talent, this report indicates the working group is projected to hire more than 7,220 additional software professionals over three years.
Software engineers accounted for the highest future hiring demand among all software occupations in working group companies, making up 53 percent of total projections
Entry-level software engineers represent the highest hiring need of any position at any level
Collectively, the working group projects they will hire more than 1,700 entry-level software engineers over the next three years
Approximately 44 percent of working group employers require a bachelors degree for entry-level software engineers
Through the Advancing San Diego collaboration, San Diego strives to cultivate a more inclusive economy, as this initiative will look inward to address regional talent shortages and strengthen the relationship between employers and education systems.
For more information about the new Advancing San Diego initiative, future working groups, or to be listed as a ‘preferred provider, visit advancingSD.org. Follow along and join the conversation at #advancingSD.
With such a significant economic impact and contribution to the region by both military and defense, San Diego was recently selected by the Department of the Navy and NavalX, as one of five U.S. locations to soon house a new innovation incubator model – ‘Tech Bridges.’
During planning stages, the NavalX team spent several months looking at regions across the U.S. that had both the necessary internal ecosystem to support greater innovation among the Department of the Navy as well as strong outside partners – think: academia, state/regional governments and local privately held companies – residing in each location. San Diego also has the foundation in place to connect emerging startups with the Department of the Navy. The additional cities selected to carry out their own form of this innovation platform include Newport, RI; Keyport, WA; Orlando, FL; and Crane, IN.
As the SoCal Tech Bridge gets fully operational and a location is soon selected, the platform will run on a franchise model, allowing San Diego’s diverse innovation ecosystems to fully shine. The goal is focus on connecting ‘non-traditional partners’ to enhance collaboration, in order to meet the growing needs of our region’s Navy and Marine Corps. Defense contractors and growing startups will soon have easier access to resources from the Department of the Navy, made possible by the Tech Bridge.
“Earlier this year, the Naval Expeditions (NavalX) office stood up to facilitate rapid adoption of proven agility-enhancing methods across the Department. And today, I’m proud to announce that NavalX in collaboration with our workforce has furthered this effort by creating the first five regional “Tech Bridges” across the country to better connect the DON and the private sector. These five spaces will lower barriers that traditionally hamper external collaboration.” Mr. James Geurts, Assistant Secretary of the Navy for Research, Development, and Acquisition
Based on research conducted by EDC’s research team in 2018, more than 5,600 defense contractors collectively employ more than 62,000 people in San Diego. Plus, 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. The future is bright for defense-related jobs in San Diego, and the addition of SoCal Tech Bridge places it on a path to continue fueling innovation and new technologies.
Fortune recently announced its 2019 Change the World list, its annual ranking of companies that are using creative tools of business to meet society’s unmet needs. In today’s world of widening economic disparities and rapid digital automation, it’s critical now, more than ever, for large companies to go beyond checking the boxes of “corporate social responsibility” and actually create solutions for sustainability and inclusive economic growth.
See which San Diego-based companies made this year’s list:
No. 1 Qualcomm: Turning faster connections into green gains Why Fortune ranked Qualcomm as Number 1 on its 2019 Change the World list: The mobile-chip designer has been a leader in wireless tech since the earliest smartphones. Now it’s building chips for 5G connectivity, which promises speeds 10 to 100 times as fast as those of today’s phones. Already, phonemakers are using Qualcomm modem chips to power 5G-compatible devices. But the company will soon introduce inexpensive, low-power versions for smart devices and sensors that could have a profound impact on the planet. As such sensors become pervasive, cities will be able to monitor air and water quality in real time, farmers can avoid overwatering or overfertilizing crops, and self-driving cars will communicate with each other to avoid traffic jams and reduce emissions.
No. 12 Viasat: Connecting Latin America to the Internet, dirt cheap Why Fortune ranked Viasat as Number 12 on its 2019 Change the World list: Satellite Internet service provider Viasat has been able to offer cheap online service from space to poorly wired parts of the world as the capabilities of its spacecraft have improved. Since lofting the school-bus-size ViaSat-2 satellite in 2017, the company’s reach has extended across Latin America. In Mexico, for example, a simple $1,500 receiver setup in a local shop can provide Wi-Fi across a wide area for as little as 50¢ an hour to users with cheap phones or tablets. So far, over 600,000 devices have logged on for Internet connections in Mexico. In July the state of São Paulo began working with Viasat to set up community Wi-Fi stations to provide connectivity in 20 underserved areas. Coming next: three ViaSat-3 satellites, with more capacity, reaching Europe, the Middle East, and Africa in 2021 and the Asia-Pacific region in 2022.
No. 35 Illumina: Lifesaving shortcuts in gene testing Why Fortune ranked Illumina as Number 35 on its 2019 Change the World list: The genomic sequencing giant has managed to spur personalized drug development, help foster a revolution in at-home DNA testing, and even save critically ill newborns. The company has been at the forefront of making whole genomic sequencing not just cheaper (it now costs less than $1,000 to conduct such sequencing, as opposed to the $3 billion it cost to sequence the first full human genome—largely thanks to Illumina’s work over the past 20 years)—but also considerably faster.
That’s absolutely critical when it comes to saving newborns in the ICU suffering from rare genetic disorders, according to Dr. Stephen Kingsmore, the CEO of Rady Children’s Institute for Genomic Medicine in San Diego. “Illumina is involved in every step of delivering care for these sick babies,” he says. Kingsmore says that, thanks to Illumina’s technology and dedication to making whole genomic sequencing accessible, affordable, and fast, a critically ill baby can have his or her genome sequenced in as little as 20 hours—which means that child can have personalized treatment delivered within a matter of days rather than weeks, likely spelling the difference between life and death. The Rady Institute has already tested about 1,000 sick newborns with Illumina’s tech in the past three years (about half of them in the past 12 months).
Aira makes Fortune’s “Ones to Watch” list. Most of the companies on Fortune Magazine’s 2019 Change the World list are large corporations with $1 billion or more in annual revenue, which helps them pay for and scale their efforts. So it created a “Ones to Watch” list, which ranks smaller companies that may not have the financial means to make significant impacts (yet), but have made technological breakthroughs that can lead to even larger gains and social impact in the future. Featured at the top of this list is San Diego-based Aira.
Why Fortune names Aira on its Ones to Watch list: Aira makes life easier to manage for the visually impaired. The four-year-old start-up offers customers a pair of camera-wielding smart glasses and an app that allows users to connect with Aira agents, who offer verbal assistance while they go about their day—navigating errands or tasks at work. With several thousand users, Aira has evidence that it boosts quality of life and reduces the chances that a blind student will drop out of college, and the company says its technology helped more than 250 visually-impaired users get jobs. The National Federation of the Blind has signed on as a partner.
Since 2013, the U.S. Department of Commerce hosts its annual SelectUSA Investment Summit, making it the country’s largest trade show for foreign direct investment (FDI). This year, in partnership with the California Governor’s Office of Business and Economic Development (GO-Biz) International Affairs and Business Development team, WTC San Diego and San Diego Regional EDC staff attended the event to promote California and San Diego.
Garnering more than 2,000 attendees and an impressive slew of speakers, the conference featured keynotes from Secretary Wilbur Ross, Larry Kudlow, and Ivanka Trump, alongside dozens of technical presentations. US Ambassadors from all over the world brought delegations of companies set on expanding into the US from their respective countries to learn about the competitive advantages of each state. At the conference, economic development representatives from nearly all 50 states vie for the attention of these companies by demonstrating why their state is best suited to support international expansion. While some states resort to fun, unique antics like utilizing a Captain America outfit to draw in crowds, the delegates from California drew attention to the immense academic investment and corporate strengths of the fifth largest economy in the world.
In the span of two days, WTC staff met with more than a dozen companies from across the globe – Israel to China and UK to Japan – specifically discussing each country’s interest in San Diego. As states and regions compete to attract foreign investment, increased coordination and collaboration across California is necessary to help combat any negative narratives, and ultimately, highlight the success of the entire state’s economy.
With Bud Colligan as Sr. Advisor for International Affairs and Trade for California, there’s been an increased call for California to develop more robust trade and FDI strategy. According to SelectUSA, majority-foreign-owned companies support 769,20 jobs in California, placing the state in a distant first with Texas coming in second by supporting 596,900 jobs.
If you are interested in WTC San Diego’s approach to creating a statewide strategy for foreign direct investment, contact Director of World Trade Center San Diego, Jesse Gipe at jg@sandiegobusiness.org.
The Integration Pilot Program (IPP) reached a large benchmark on the food delivery mission, which included a successful test flight with Uber Eats on San Diego State University campus. Starting this summer, Uber will be using specially crafted drones developed by its flight arm, Uber Elevate, to grow the company’s food delivery program. Giving way for Uber Eats to operate in the region’s airspace, San Diego Office of Homeland Security has been integral in this initiative with coordination from EDC, in order to obtain the necessary waivers and certifications from the Federal Aviation Administration (FAA) through the IPP. Read more about this program here.
The IPP is rapidly moving forward on the first-ever international Unamnned Aircraft Systems (UAS) flight, which is made possible in coordination with EDC’s partners at CAPE Aerial Telepresence and the City of Tijuana. The project has also been working diligently with Matternet, the medical delivery operators, to determine the route for the first blood sample test delivery.
Next up: EDC, in partnership with Booz Allen Hamilton, is planning the process for a drone conference, which is slated to take place in February 2020. The themes include San Diego as a center of excellence in the emerging technologies industry, inclusivity, and deep dives into the unique challenges of UAS integration. A planning committee is being formed, involving possible participation from local government partners, local industry leaders, nonprofit stakeholders, and higher education institutions. Expect more details on the conference coming soon.
Serving the defense and transportation industries, Cubic Corporation is a global company with clients on nearly every continent. The company has called Kearny Mesa home for 50 years, currently based in an aging set of buildings that have not kept pace with the company’s. Its facilities were divided onto two major campuses in the Kearny Mesa area, creating a lack of cohesion among its business units.
With competition for tech talent at an all-time high, Cubic’s leadership was concerned its outdated facilities would discourage potential hires. Cubic needed to modernize and redevelop its campus to help attract talent, while also providing adequate facilities for the next 50 years. Despite its long history as a San Diego company, Cubic was experiencing pressure to build its headquarters in a lower-cost state such Tennessee, Alabama, orFlorida, where Cubic had other growing operations. As a result, EDC worked hand-in-hand with Cubic’s team to secure the necessary incentives to keep San Diego a competitive option, despite pressure to relocate its facilities out-of-state.
Utilizing both state and local programs, EDC was able to leverage its expertise in incentives consulting in order to help this 50-year-old staple company stay in California. EDC developed a strategy to capture a number of incentive programs, which offset the cost of rebuilding its headquarters in San Diego. Additionally, EDC worked as an intermediary to both the City and State departments on behalf of cubic to ensure processes were staying on track and that the campus redevelopment was seen as a priority by all parties.
Cubic secured a CalCompetes Tax Credit worth $8.5 million. Locally, Cubic was able to secure expedited processes through the City of San Diego, in addition to a Business Incentive Program and Business Cooperation Program award. In total, the incentives and expedited processes provided gave Cubic the necessary offsets and timeline confidence to commit to redeveloping its Kearny Mesa headquarters, and keeping San Diego as its home for decades to follow.
ABOUT CUBIC CORPORATION: Cubic is an American public corporation providing diversified systems and services to the transportation and defense markets worldwide. Cubic Corporation is the parent company of three major divisions: Cubic Transportation Systems, Cubic Mission Solutions and Cubic Global Defense. cubic.com
Real Dog Box, a small startup that manufactures dog treats, was reaching capacity at its current location, and risked closing if they did not find a new warehouse by June 2019. Real Dog Box reached out to EDC asking for assistance in finding a new site under one roof that could accommodate the manufacturing company’s joint operation for light industrial manufacturing and a commercial business.
EDC leveraged its connections and reached out to the City of San Diego’s Economic Development Department for more information and assistance on the specific zoning regulations that the company could use to locate a new site. Using a property selection database, EDC provided a list of potential locations that met Real Dog Box’s requirements for property characteristics and complied with the City’s industrial and commercial zoning regulations.
In May 2019, Real Dog Box was able to re-locate to a new 13,000 sq. ft. site in Barrio Logan within the City of San Diego’s Promise Zone. Thanks to its expansion efforts, Real Dog Box hired three new employees within the first few weeks of moving. In addition to providing a list of potential properties, EDC created a list business resources related to incentive support for the City of San Diego’s Storefront Improvement Program, Business Incentive Program and Business Cooperation Program. EDC also provided additional information on San Diego Workforce Partnership’s programs for On-The-Job-Training, Customized Training and made introductions to CDC Small Business Financing.
“We were in a real pinch to find a new location for our manufacturing facility. EDC helped narrow down our search for properties that fit our needs and their contacts at the city’s zoning office saved us A LOT of time. In our initial meeting with EDC, the team was able to recommend quite a few incentives offered by the city and state specific to our business model and needs that I had never heard of. I wish I’d known sooner what a great resource they are.” -Ruby Alexis Balaram, Founder and COO, Real Dog Box
ABOUT REAL DOG BOX: Real Dog Box was a small startup launched in 2016 transforming the way people feed their dogs. Real Dog Box offers a monthly box of nutritiously diverse dog treats and chews shipped across the U.S. real.dog
