Each month the California Employment Development Department (EDD) releases industry data for the prior month. This edition of San Diego’s Economic Pulse covers November 2017 data, including unemployment, new business establishments and job postings.
Highlights include:
The region’s unemployment rate fell to 3.3 percent in November, from a revised 3.7 percent in October. The unemployment rate is a full percentage point below the November 2016 rate of 4.3 percent, and the lowest since December 2000.
Every jurisdiction saw a decline in its unemployment rate in November. El Cajon and Imperial Beach saw the largest declines, both dropping 0.7 percent.
The labor force added 4,800 workers in November, after shedding a similar number in October. The labor force is up 8,600 compared to a year ago.
Year-over-year, real estate, rental and leasing growth outpaced all other key sectors, up 5.5 percent.
San Diego’s 2017 story was one of growth, innovation, global connectivity and collaboration across different communities and industries. And even in a year riddled with uncertainties, San Diegans remained committed to driving positive change – and EDC remained committed to delivering news about this change to your inbox each week.
So, we’re sharing San Diego’s top 10 ‘Good News’ stories from 2017 as a reminder of just how lucky we are to call this life-changing place home.
From all of us at EDC, we thank you for being a part of it (and a special thanks to Phil Blair at Manpower San Diego for sponsoring this Good News all year long). Here’s to 2018.
SD deploys largest IoT platform in the world San Diego might just have the smartest streetlights in the world. The city of San Diego partnered with GE to upgrade streetlights to reduce energy costs by 60 percent, as well as transform them into a connected digital network that can optimize parking and traffic, enhance public safety and track air quality. With 3,200 smart sensors, it is the largest city-based deployment of an IoT platform in the world. Read more.
Airport expands, adds new nonstop flights It was a big year for the nation’s busiest single runway commercial airport. A few highlights from San Diego International Airport:
Broke ground on new international customs inspection station to accommodate the increase in passengers on international flights, to include a baggage claim area, new technology from U.S. Customs and Border Protection and more room for waiting lines
Commuter Terminal transformed into an Innovation Lab where entrepreneurs can conceive, develop and test emerging technologies and business concepts
Cubic moves the world Cubic Transportation Systems is quite literally moving the world. This year alone, the San Diego transportation technology company netted more than $1 billion in contracts to implement next-gen payment systems for the New York Metropolitan Transportation Authority and Massachusetts Bay Transportation Authority. Cubic also signed contract extensions with Transport for London, and with the Metropolitan Transportation Commission in the Bay Area.
Amazon expands in San Diego. No, not HQ2 Amazon committed to growing its footprint in San Diego, with more than 100,000 square feet of office space leased from Alexandria Real Estate. While Amazon has a small office in Solana Beach, as well as distribution facilities in the region, this is its first major office/engineering presence in the region – with room for 500 employees. While this move is separate from its highly-publicized HQ2 bid, it does signal that Amazon sees viability in the San Diego market. Read more.
San Diego’s Toni Atkins tapped to lead CA State Senate State Senator Toni Atkins is set to become the California Senate President Pro Tem. She is the first woman and first openly gay legislator to hold the leadership position – and she hails from none other than San Diego. No stranger to leadership roles, Atkins previously served nearly two years as speaker of the California Assembly. Read more.
Former Google Ventures exec chooses SD as VC fund home While San Diego may not be viewed as VC heavy weight, this year proved that we can still hold our own in the VC ring. When former Google Ventures exec Bill Maris was closing on his venture fund, Section 32, he chose San Diego as its home. While local companies do command VC (82 deals totaling $903 million as of Q3 2017), there are few funds based here. Maris’ decision to operate out of San Diego brings a new type of VC ecosystem to town. Read more.
Comic-Con commits to SD through 2021 Staying true to its 1970 commitment, Comic-Con International announced it will remain in San Diego through 2021. With more than 130,000 attendees from across the world, Comic-Con is the San Diego Convention Center’s largest event and is estimated to generate $135 million regionally and $2.8 million in tax revenues for the city. Plus, it makes for some great people watching. Read more.
SD ushers in new era of precision medicine As the most patent intensive genomics market in the U.S., San Diego is leading the charge in a new era of healthcare. Kicking the year off, local genomics giant lllumina unveiled a new machine that is expected to sequence a whole genome for less than $100, in less than one hour – down from $1,000 in 2014. Also making waves in the genomics space, Edico Genome set (another) world record by processing 1,000 pediatric genomes in two hours and twenty-five minutes. Read more about the industry in the first-ever genomics study, which EDC released at BIO 2017.
Local universities expand, bolster talent pipeline San Diego universities produce a top-tier talent pipeline for employers both here and across the globe. And now more than ever, San Diego State University, UC San Diego, Point Loma Nazarene University and other locals are expanding programs and campuses to accommodate increased enrollment and industry needs. This year’s university successes include:
UC San Diego broke ground on a state-of-the-art facility in East Village that will connect students to downtown’s diverse, entrepreneurial community
San Diego State University quantified its impact, highlighting $5.67 billion in economic activity and 42,000 jobs supported
Local philanthropist T. Denny Sanford donated $28 million to National University System to address critical needs in teacher education, PreK-12 instruction and nonprofit fundraising
San Diego tops the charts San Diego made its presence known in many of this year’s national rankings. From the region’s entrepreneurial culture to its quality of life, top-tier publications and organizations took notice of what San Diego brings to the table. Here are some of our favorite rankings of the year:
A prosperous San Diego means an economy that works for all residents. Despite record low unemployment rates and a flourishing innovation economy, San Diego, and many other regions, have seen a rise in economic inequities. And if not addressed, this rise will have dire economic consequences.
It started with taking an uncomfortable – yet honest – look at how San Diego can better address strategies for inclusive economic growth and how economic development professionals in San Diego can better address these strategies that impact both businesses and workers.
EDC’s still has a long way to go in its mission to help make the competitiveness case for inclusion, but we’ve come a long way. See more in our timeline below:
APRIL 2016 – THE RISING TIDE A rising tide hasn’t lifted all boats, and sometimes it takes a former Navy Admiral to make that observation. At EDC’s Annual Dinner, Jim Zortman takes over as EDC chair, and challenges us to re-think economic development and engage communities that have been historically left out of the conversation.
DECEMBER 2016 – A BROOKINGS INSTITUTION INCLUSIVE LEARNING LAB San Diego wasn’t the only place having these conversations. DC, on behalf of San Diego, was selected as one of three regions from around the country to participate in a learning lab, spearheaded by the Brookings Institution, focused on inclusive economic development and how organizations engage in this complex topic. EDC convened partners in the community who were embedded in these issues to come around the table.
JULY 2017 – DEFINING THE PROBLEM With the help of the Brookings Institution, EDC completed a narrative to make the competitiveness case for inclusive growth. Economic inclusion is more than just ‘corporate social responsibility’; it’s an economic development imperative. In the narrative, EDC highlights key stats about this challenge that frames inclusion as a competitiveness issue: that our demographics are shifting and our ‘innovation economy’ workforce is not reflective of our population; that the educational attainment gap in minority populations will exacerbate company workforce shortages in STEM fields; and that small businesses are not able to compete to grow. All of this is happening at a time when housing prices are at an all-time high and our population’s ability to afford to live here is shrinking.
SEPTEMBER 2017 – A LEADERSHIP TRIP TO LOUISVILLE EDC took a group of business leaders to Louisville, KY to understand how their region addresses challenges related to inclusion. In Louisville, where socioeconomic and demographic challenges have come into everyday conversation, our group learns to be bold and be direct when addressing these issues. It’s only when everyone can talk about the challenges that they can be addressed, in full.
2018 – WHAT’S NEXT As the region’s innovation economy continues to grow, EDC is incorporating lessons learned into its own strategic plan. The plan is three-fold: 1) Developing San Diego’s population to meet the region’s talent needs 2) Helping SMEs better compete and 3) Highlighting issues of affordability that prevent talent from staying in, or coming to the region.
We’re just getting started. Stay tuned for more in 2018.
DiscoversdBIO: Launched to coordinate foreign delegations
Delegations from around the world travel to San Diego to forge connections with businesses in our innovation economy. However, when they visit, they often meet with the large institutions already ingrained within the international market and are not exposed to San Diego’s small- and medium-sized enterprises (SMEs) that encompass a wide range of opportunities. We wanted to level the playing field for SMEs.
See how in our timeline below:
NOVEMBER 2015 – FORMING THE PROTOCOL NETWORK WTC organized partners around the community into the Protocol Network in order to maximize the impact that foreign delegations visiting San Diego and, in turn, provide potential investment and partnership opportunities to the region’s SMEs.
JUNE 2017 – CONVENING AROUND BIO 2017 When the BIO Convention brought 16k biotech and pharma leaders to town in June 2017, we knew it was an opportunity to put the protocol network into action. WTC San Diego and Biocom piloted the “DiscoversdBIO” web tool, an automated online system to coordinate foreign delegations traveling to San Diego for the convention.
NEXT UP… In 2018, WTC San Diego is expanding the “Discoversdbiz” web tool to encompass the broader innovation economy and automate the platform in order to connect foreign delegations to SMEs throughout the region. SMEs.
Talent drives corporate decision making and galvanizes innovation. In 2017, EDC developed programming – to complement San Diego: Life. Changing. – to attract and retain talent throughout the San Diego region.
Some of these were piloted for the first time and some were about taking an existing program to the next level. See more in our timeline below:
2013 – BRINGING CAREER OPPORTUNITIES TO STUDENTS It started with research. After conducting an economic impact study on the sports and active lifestyle industry, EDC wanted to put the data into action. Together with UC San Diego, EDC created itrends in sport and active lifestyle – a series that brought sports and brand leaders to campus to talk about career opportunities in the field. The panels were open to students in any major or school, illuminating numerous opportunities – from marketing to engineering to logistics – to work in the sports and active lifestyle industry in San Diego.
2014 – EXPANDING TO ADDITIONAL INDUSTRIES After the success of the itrends in sports and active lifestyle, EDC partnered with UC San Diego to host two additional industry-themed events around life sciences and cybersecurity. Based on preliminary feedback, students indicated they were more likely to explore career opportunities in San Diego after graduation after attending itrends.
JANUARY 2015 – TRENDS BECOME LINK2 SAN DIEGO Other universities started to take notice. EDC renamed the program “Link2 San Diego” and expanded out its list of schools to include San Diego State University, Cal State San Marcos and University of San Diego.
OCTOBER 2015 – LINK2 GOES TO SD HACKS EDC partnered with UC San Diego Jacobs School of Engineering to host a Link2 panel at SD Hacks, a hackathon attended by more than 1,000 students throughout the state. Hackathon attendees took a break from their 36 hours of coding to learn more about career opportunities in San Diego. After the success of the first SD Hacks in 2015, EDC hosted an additional Link2 at SD Hacks in October 2016.
JANUARY 2016 – PROGRAM EXPANDS TO REACH MORE STUDENT POPULATIONS EDC wanted to ensure it was reaching younger students who had not yet determined their career pathways. Partnering with Junior Achievement, EDC worked to expand programming to include high school and community college students.
APRIL 2016 – LINK2 HEADS TO DT SAN DIEGO in 2016, EDC partnered with the San Diego Downtown Partnership to take students off campus and into the workplace. Together, Link2 Downtown brought more than 30 UC San Diego students to downtown employers to learn about specific companies – including Red Door Interactive, Zeeto Media and others – first hand. Relive it with us.
OCTOBER 3, 2017 – LINK2 HITS THE ROAD Three years later, it was time to test our luck outside the region. So we took Link2 to a California university and hub for STEM talent – Cal Poly San Luis Obispo. More than 40 students showed up to learn about career opportunities in San Diego from ViaSat, Intuit, Takeda, Solar Turbines and MindBody.
Stay tuned for more from Link2 – which we’re renaming “Link to” – in 2018.
Propel San Diego is a federal grant – awarded to the city of San Diego – to boost the San Diego region’s defense resiliency. The timeline below describes how we worked with and through partners, on the Propel San Diego initative.
2012 – OPERATION SAN DIEGO COALESCES Amid discussions around the potential impact of sequestration, EDC and the San Diego Military Advisory Council (SDMAC) co-create the Operation San Diego initiative. Operation San Diego is a strategic plan to support the region’s military and defense footprint – a key driver of the regional economy.
SEPTEMBER 2014 – EDC EXPLORES COLLABORATION WITH OEA Home to the largest concentration of military assets in the world, San Diego was a prime candidate for funding from the Department of Defense’s Office of Economic Adjustment (OEA), which had already been funding similar programs in other defense-heavy clusters across the country. The Office of Economic Adjustment urged San Diego to apply for the program, which would help boost San Diego’s defense resiliency.
JANUARY 2015 – RESEARCH PROVES ELIGIBILITY FOR OEA FUNDING As a way to prove eligibility for the grant, EDC conducts an analysis of defense-related workforce trends. The research concludes that many small and medium-sized enterprises (SMEs) are dependent on military and defense funding. An OEA grant would help develop programming to diversify revenue streams. Now, EDC and SDMAC must get the right regional partners onboard.
AUGUST 2015 – CITY OF SAN DIEGO SPEARHEADS GRANT PROPOSAL Recognizing the need to diversify our economy, the City of San Diego agreed to spearhead the grant proposal and act as the fiscal agent.
JULY 2016 – SAN DIEGO WINS $1.6M GRANT After a lengthy application, the City of San Diego, EDC and additional regional partners receive notification of a $1.6 million grant award for Phase I of the OEA project. Phase I of the project includes a defense industry survey and research report, overhaul of the SDMAC website and the creation of a regional asset map.
SEPTEMBER 2016 – PROPEL SAN DIEGO DEVELOPED AS ENTITY The partners in charge of executing the OEA grant officially name the initiative Propel San Diego, and develop a logo and other supporting materials.
JANUARY 2017 – PROPEL SD RESEARCH IDENTIFIES DEFENSE ECOSYSTEM Research finds that small businesses often derive a large portion of their revenue from defense-related contracts, meaning downward adjustments in military spending at the federal level can have catastrophic impacts on the longevity of military-reliant small businesses.
SEPTEMBER 2017 – PROPEL SD AWARDED $1.7M FOR PHASE II OF OEA GRANT Due to the success of the Phase I OEA work, Propel San Diego was granted $1.7 million to execute Phase II, which will begin in 2018. As part of the Propel San Diego deliverable, EDC and World Trade Center San Diego will run a MetroConnect defense cohort for defense-reliant companies looking to export and diversify their sales portfolio.
And we’re just getting started. In 2018, we’ll release our defense visualization tool. Stay tuned for updates from Propel SD.
In addition to San Diego Regional EDC, Propel SD partners include:
When you think about the region’s economic prosperity — today and tomorrow — all roads lead to San Diego International Airport. Tourism, business, global trade, the innovation economy, even the defense sector all depend on it.
Last year, our airport served almost 21 million passengers. Terminal 2, expanded several years ago, is a welcoming stage for San Diego. Yet Terminal 1 — now 50 years old and used by Southwest, Frontier and Alaska Airlines — not so much.
That is why the Airport Authority is refining the Airport Development Plan, which includes replacing Terminal 1. But there is a catch — paying for it. Right now, congressional action to lift the cap on the Passenger Facility Charge (PFC) is being debated — again — and it is essential for our airport and for our region.
The San Diego County Regional Airport Authority is the airport owner and operator, and it has been busy making a stream of improvements over the past decade. These include the expansion of Terminal 2, a central receiving and distribution center, new general aviation facility, new rental car center using a new on-airport roadway to access the terminals, a parking structure and new international arrivals facility under construction, and much more….
The California Competes Tax Credit (CCTC) is an income tax credit program available to businesses expanding in or relocating to California. Created in 2014 by the California legislature and overseen by Governor Jerry Brown’s Office of Business and Economic Development (GO-Biz), Cal Competes offers variable amounts of tax credits to companies based on commitments to hire full time employees over a span of five years. In 2017, 293 California companies were awarded more than $210 million in tax credits.
Since the CCTC program inception, more than 110 San Diego companies have received $61.1 million in tax credits tied to the creation of more than 8,433 jobs. San Diego consistently ranks among the top three metros in the state for tax credit distribution, with 2017 as no exception. This year, 37 San Diego companies were awarded nearly $24 million (11.35 percent of total) in tax credits in exchange for the creation of 2,000 new jobs, $200 million capital investments and $500 million in wages paid over the next five years. San Diego received the third highest percentage of credits in the state, behind only Los Angeles and San Francisco.
Credit recipients span the region from Oceanside down to Chula Vista, representing businesses large and small across a variety of industries including biotech, software development, manufacturing, defense and more. Of all 37 San Diego companies in 2017, medical device manufacturer NuVasive was awarded the largest credit of $3 million for its commitment to create 245 new jobs over the next five years. Additional recipients in 2017 include Ballast Point spin out Cutwater Spirits ($2M credit for 64 jobs); game developer Psyonix ($1.2M credit for 69 jobs) and LED manufacturer Hyperikon ($975K credit for 75 jobs).
During the CCTC application process, companies are classified as either large or small. Throughout the 2017 rounds, San Diego small companies performed particularly well compared to other metros. Of all credits distributed in the small business category in 2017, 21.2 percent came to San Diego firms – the second highest of all California metros. San Diego small businesses received nearly $8 million in credits, with plans to create 400 jobs in the region over the next five years.
San Diego’s large companies performed admirably as well, receiving $16 million – or 9.2 percent – of the total credits awarded in the large business category, coming in third for highest percent of credits within the category.
The next application round will look to award $100 million in credits and will open January 2, 2018 and close January 22, 2018. Just before the round opens, GO-Biz host a free workshop hosted on Friday, December 8. Businesses interested in applying can register to attend any of the workshops and receive customized technical assistance from GO-Biz staff.
For additional questions about how to complete a competitive application, please feel free to contact Jesse Gipe at jg@sandiegobusiness.org.
In 2016, executives from San Diego life sciences giants Illumina, Human Longevity, Inc., Thermo Fisher Scientific, ResMed and Dexcom approached EDC with a pressing need for a specific type of talent: bioinformatics professionals. Known among peers by their technical title, bioinformaticians develop and apply software tools to understand biological data sets. In San Diego, leaders in genomics and connected health are gathering incomprehensible amounts of data with the power to unlock the human genome, make personalized care a reality and enhance the way we live on a massive scale. Individuals skilled in bioinformatics, data science and computational biology are instrumental in deciphering such data sets – a task with stunning implications across pharma, biotech, healthcare, genomics and much more.
Even with impressive programs at UC San Diego and SDSU, the demand for bioinformatics professionals is simply too high for local universities to fill. As such, EDC launched the Life Sciences Trek to San Diego with the help of our economic development committee, to showcase local opportunities for Masters and PhD’s from across the country. The goal of the program: attract talent who can translate data into actionable results for application in healthcare and medicine. During the trek, the group would visit seven San Diego life sciences staples, presenting a range of career opportunities.
On November 9-10, we were joined by 27 students from across the U.S., representing UC Berkeley, UC San Francisco, University of Michigan, Stanford, Arizona State, UC Riverside, University of Northern Carolina, University of Pittsburgh and Georgia Institute of Technology. Through company tours, presentations and a networking reception, students gained access to influential researchers and executives across many of San Diego’s research institutions and fast growing companies including ResMed, Illumina, the Salk Institute, Rady Children’s Institute for Genomic Medicine, Thermo Fisher Scientific, Takeda Pharmaceuticals and Human Longevity, Inc. From drug discovery to connected devices, genetic sequencing to direct patient care, the breadth of opportunities for bioinformaticians became apparent within San Diego’s diverse life sciences ecosystem.
Though a pilot program for EDC, the Life Sciences Trek to San Diego was largely a success. Providing an employer perspective, ResMed Lead Talent Acquisition Partner Amy Hernandez considered the trek a “fantastic employment branding opportunity” and a “great community event that highlighted San Diego as an attractive employment marketplace to a ripe generation of future leaders.” Additionally, the students were impressed. For one student, the trek displayed “tremendous opportunities to do biomedical research that directly impacts patient lives.” For another, the trek was a “fantastic opportunity and unique experience to get an inside look into companies and a career in Life sciences and in bioinformatics specifically,” saying “it was perfect timing in my last year of my PhD program.”
Looking ahead to 2018, EDC will continue to address the occupational demand for bioinformatics and other life sciences professionals in San Diego. EDC will play host second trek in 2018, and will emphasize the need for data science professionals as a part of the U.S. Chamber’s Talent Pipeline Management program, which takes an employer-focused approach to meeting talent needs.
EDC didn’t need to write talking points, as San Diego spoke for itself. The people we met, spaces we visited and stories we heard over the two days embodied the region’s life-changing identity. Surpassing expectation, the trek has left an undeniable impression on all who participated – students and locals alike.
Following an increase in employment during Q2 2017, total nonfarm employment fell 5,800, or 0.4 percent, in Q3. Job gains in the private sector helped offset some of the losses seen in local and state government. Compared to a year ago, total nonfarm employment was up 16,100, or 1.1 percent. Meanwhile, San Diego’s unemployment rate declined by 0.2 percentage points in Q3, and remained 0.6 percentage points below California’s rate and was on par with the national rate.
Key findings from the snapshot:
San Diego closed Q3 with an unemployment rate of 4.1 percent, the 17th lowest among top U.S. metros and below the state rate of 4.7 percent.
With the holiday season approaching, retail trade recorded the largest gain, adding 1,400 jobs during the quarter. Healthcare and social assistance continued to grow, adding 1,200 jobs.
VC dollars in the region increased 25.1 percent compared to the previous quarter.
The Quarterly Economic Snapshot 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. This releases includes data from July to September (Q3) 2017.
Each month the California Employment Development Department (EDD) releases industry data for the prior month. This edition of San Diego’s Economic Pulse covers October 2017 data, including unemployment, new business establishments and job postings.
Key Findings from pulse:
The region’s unemployment rate fell to 3.7 percent in October, from a revised 4.1 percent in September, and is a full percentage point below the October 2016 rate of 4.7 percent.
Nearly every jurisdiction in San Diego saw a decline in unemployment. Imperial Beach saw the largest decline for a second consecutive month.
Year-over-year, real estate, rental and leasing growth outpaced all other sectors, up 5.6 percent.
