Tag: edc investors

A note from our Vice President

By Eduardo Velasquez,

San Diego’s 2026 mid-year check-in

Dear EDC investors and partners,

We start each year with a look ahead to what trends we think will be most significant to San Diego’s economy. We entered 2026 knowing our region is facing a critical inflection point—one where our growth engines are no longer propelling our region forward. This harsh reality has emerged against the backdrop of profound changes in trade policy, technological transformation, and federal funding in innovation.

Midway through the year, the significance of this inflection point is becoming clearer. What is also becoming clearer are the actions San Diego must take—with and through you—to restart our region’s economic engines and retain our global competitiveness.

Confronting the brutal facts

First, we must acknowledge what the data have demonstrated: San Diego’s economic engines have stalled out, dragging overall job growth down with it. This is because when one job is added in our innovation industries (life sciences, aerospace, tech, cleantech), another two are added elsewhere in the economy. New data shows that job declines in these innovation industries continued throughout 2025 (see chart). Overall, the region had 2,200 fewer jobs in 2025 than in 2024. Between 2024 and 2025, employment in the region increased by just 0.7 percent, which is half the annual average since 1990—meaning the pace of job growth over the last two years was four times slower than the historical average.

During the first half of 2026, San Diego has recovered some of this job loss, adding 4,200 jobs through June. However, all this growth is being buoyed by two sectors: healthcare and social assistance, and leisure and hospitality. Without these, San Diego would have 10,900 fewer jobs. While growth in these two sectors is welcome, the employment opportunities they create are both lower-paying on average and historically tend to be fueled by growth in innovation and other traded sectors as opposed to fueling growth in them.

The current composition of job growth in the region looks nothing like previous periods of economic expansion. Knowing what innovation jobs mean to our regional economy, the status quo is not sustainable.

It is not yet clear to me whether the weak job market of the last 12-18 months is reflective of current market disruptions from tariffs, inflation, and federal funding cuts or something more structural such as population decline and AI (likely a combination of all the above). Regardless, San Diego must adapt to the current headwinds and leverage our strengths to propel new job growth, foster a more resilient workforce, and cultivate the next generation of innovation.

Creating jobs

One area the federal government has clearly communicated its willingness to expand appropriations is defense. Congress is currently negotiating a policy framework for $1.15 trillion in defense spending. In addition to housing the largest concentration of military assets and personnel in the world, San Diego has demonstrated its technological primacy in areas such as autonomous vehicles and advanced materials sciences, drawing tens of billions in defense contracts annually.

The Department of War has issued new guidelines on procurement aimed at more rapidly deploying dollars and our region needs to be better positioned to compete for those funds. With support from defense primes such as Booz Allen, dozens of defense technology startups, and our two R1 universities—UC San Diego and San Diego State University—EDC will release a Defense Innovation Roadmap this October to ensure our region has a coordinated set of strategies for catalyzing investment and growing jobs in the defense industry.

Sign up to receive EDC’s research in your inbox

Developing talent

While job growth is a challenge in 2026, another difficulty is determining what skills workers must develop to remain competitive as AI emerges as both tool and threat. San Diego must best position itself to both ride the wave of investment to capture new technology jobs, as well as prepare our workforce to adapt and thrive amid this technological revolution. That is why EDC is excited to join Opportunity@Work and the Brookings Institution for the inaugural AI Readiness Lab, as part of a national peer learning network.

Our economy runs on exactly the kind of skilled, career-building roles that AI is reshaping fastest. We already see a widening gap between economic growth and entry-level hiring in the occupations our young workers count on to launch their careers. Getting this transition right is critical to our region’s prosperity and competitiveness, and we’re excited to learn alongside five peer regions working to turn AI from a threat into an engine of opportunity.

Learn more

Crafting the market

Earlier this year, I had the privilege of participating in a two-day workshop with some of the most thoughtful and intentional economic development practitioners in the country. The purpose of the gathering was not to “admire the problem” facing regional economies today, but rather to recognize that market forces can be deliberately shaped to produce more of what a region needs.

We know what our region needs: quality jobs, skilled talent, and thriving households. We need to better define the challenge before us to effectively mobilize business, government, and civic leaders to maximize our region’s economic prosperity and global competitiveness.

San Diego is facing new challenges and we must adapt to reinvigorate job growth and prepare our workforce for rapid transformation. Fortunately, our region has a long history of reinvention and reimagination. It’s time to do it again. Let’s get to work.

With gratitude and respect,

Eduardo Velasquez
Eduardo Velasquez

Vice President, Economic Development & Research

UK-based Arup opens new San Diego office, expanding in Southern California

By San Diego Regional EDC,

 From its new home in La Jolla Commons, Arup will deepen collaboration with San Diego region clients and partners across healthcare, life sciences, and infrastructure

Together with Mayor Todd Gloria, EDC celebrated the opening of UK-based global built environment consultancy Arup‘s first office in San Diego at La Jolla Commons, growing the firm’s footprint in Southern California and strengthening its ability to collaborate with clients and collaborators across the region.

With a current staff of 12 and significant plans for growth, the new location builds on Arup’s long-standing presence in San Diego. Since 1989, Arup has designed and supported projects across the region, partnering with public and private-sector organizations to shape the built environment, particularly in life sciences and healthcare innovation. Establishing a dedicated office will deepen local relationships and bring multidisciplinary expertise closer to the people and places Arup serves​.

The office opening was marked by a ribbon-cutting ceremony held in partnership with EDC. The celebration brought together civic leaders, clients, collaborators, and community partners, and featured remarks from San Diego Mayor Todd Gloria, Arup’s Americas Managing Director Scott Russell, Arup West + LATAM Geography Leader Alex Lofting, Arup San Diego Office Leader Ger Bythell, and EDC Chief Strategy Officer Nikia Clarke.

“I’m proud to welcome Arup’s first San Diego office,” said Mayor Todd Gloria.

“Their decision to invest and grow here speaks to what we already know about San Diego: this is a city with incredible talent, a strong economy and an environment where innovative companies can succeed. Arup’s expertise in infrastructure, life sciences and healthcare aligns with sectors that are important to our region’s continued growth. I look forward to seeing them create jobs, deepen their roots and become an even bigger part of our innovation ecosystem.”

San Diego is widely recognized as one of the country’s most forward-thinking regions for climate action, with policies advancing net-zero buildings, EV infrastructure, water reuse, and coastal resilience. ​The​ new office will enable Arup to better support local clients responding to these priorities, helping leaders plan, design, and deliver resilient, sustainable outcomes at pace.​

“A successful future for San Diego, and for the broader Southern California region, relies on strong partnerships. In La Jolla, our San Diego team will continue to work with clients and collaborators to help shape resilient infrastructure, high-performing places, and climate-positive development for the decades ahead,” said Ger Bythell, Arup’s San Diego Office Leader.

Bythell brings more than 34 years of experience across advisory services, program and project management, and complex capital delivery. Throughout his career, he has led multidisciplinary teams and major initiatives spanning healthcare, science and technology, commercial property, aviation, and government infrastructure. His experience helping establish and grow Arup’s presence in emerging markets positions him well to guide the firm’s next chapter in San Diego.

“We are excited Arup has chosen to deepen its investment in San Diego,” said Eduardo Velasquez, Vice President of Economic Development and Research at EDC. “Global companies like Arup choose our region for its innovation pedigree and collaborative spirit, and we look forward to seeing the team continue to shape the future with global leaders in biotech, healthcare, and design—right here in San Diego.”

The office will support growth across sectors central to the San Diego region’s economy, including healthcare, life sciences, biotech, pharmaceuticals, technology, government, property, and the blue economy.

Arup is already engaged locally with Rady Children’s Hospital, UC San Diego including the recently completed Viterbi Family Vision Research Center, the San Diego Airport, the Port of San Diego, San Diego Association of Governments, and the City of San Diego.

Arup’s office in San Diego opens as the firm marks noteworthy milestones: 80 years delivering work globally and 40 years since establishing its first regional office in San Francisco in 1985, growing to more than 2,000 professionals across 19 locations in the United States, Canada, and Colombia.

Expanding into San Diego? 

Learn how EDC can help →

A note from our Vice President

By Eduardo Velasquez,

The nobility of business

Dear EDC investors and partners,

Each year, EDC organizes a leadership trip to another metro in our country to learn about their economic development challenges and draw inspiration for tackling our own as we strive toward a more competitive, and inclusive San Diego.

Earlier this summer, we traveled to Chicago with a 40-person executive delegation where we learned about the City’s network of corporate philanthropic partners focused on systemic change and a university-led, multi-state collaborative competing for the jobs of the future through its Quantum and Microelectronics Park that has drawn $100M+ in federal funding—all culminating with a moving preview visit to the Obama Center and Presidential Library.

Yet, among all the exciting efforts we learned about and all the amazing speakers we heard from, the thing that has continued to resonate with me most nearly three months later is the simple but powerful statement from former U.S. Commerce Secretary Penny Pritzker: “Building a business and growing jobs, in and of itself, is a noble cause.”

As someone who has spent the past decade working to support businesses that want to grow and expand in our region, these were words that I needed to hear. Building a business…is a noble cause.

Doing business today is hard

Small and medium-sized businesses are the backbone of our regional economy. Those with fewer than 100 employees represent 99% of businesses in our region and they collectively employ 60% of our regional workforce, which is nearly double the national average. Since the pandemic, we have seen a steady rise in new business formation while the job market has remained weak, and our economic engines have sputtered. Brave individuals have decided to take on the noble pursuit of forming their own enterprise with all the risk that it brings.

Choosing to start a business is a major endeavor. Building that business, while running that business, is a 24-hour job. Operating a business in the state of California is no easy task (insert your favorite scoff here). And with all the uncertainty that business owners face today, from tariffs to AI, growing a business has never been nobler.

Celebrating business impact

That is why last week we hosted the second annual San Diego Business Impact Awards. With more than 300 people in attendance, EDC and JPMorganChase celebrated businesses, and their owners, for continuing to persevere and for choosing to invest in growing here in San Diego.

But the Business Impact Awards go even further. We aim to not only honor businesses for growing, but also for how that growth is landing in our region.

We wanted to know: Is a business hiring local? Sourcing locally? Training the next generation of workers? Building something that draws on all the great assets that our region has to offer?

In just our second year, we received twice as many nominations as in 2025—and the quality of the submissions was remarkable.

What that tells me is that the San Diego’s business community is eager to be seen not just as growing companies (noble as it is) but also as good stewards of our region.

The ripple effects

Collectively, this year’s honorees employ more than 13,000 people. They generated more than $9 billion in combined revenue. They paid out more than $1.5 billion in wages and salaries in FY 2024-25. And year-over-year, they added more than 1,500 net new jobs to this region. Through their supply chains and labor income, these 100 businesses added more than $6 billion to the regional economy; that’s more than our Cyber industry, our RNA industry—and the equivalent of 38 Comic-Cons.

These are not just abstract statistics.

That’s 13,000 households with paychecks that contribute to local schools, dine at local restaurants—and in many cases, 13,000 people who chose to plant their careers here because one of those companies gave them a reason to.

When EDC talks about building a more competitive San Diego, a more inclusive San Diego economy, this is what we mean.

These companies represent every corner of our county—spanning life sciences, clean energy, technology, consumer brands, food and beverage, defense, and professional services. They are young companies and companies that have been around for more than six decades. But they all share a common thread: a genuine commitment to San Diego.

To our honorees, and to all the 100,000+ businesses across our region, thank you. Please keep striving, please keep investing in our region—your efforts are both noble and impactful. And we have your back.

With gratitude and respect,

Eduardo Velasquez
Eduardo Velasquez

Vice President, Economic Development & Research

A note from our Sr. Director

By Bree Burris,

A busy San Diego summer

Dear EDC investors and partners,

There’s nothing sweeter than a San Diego summer. The days are longer, the weather is stunning, and there’s no shortage of reasons to get outside, reconnect, and spend time with the people who make this region such a remarkable place to live and work. While our summer calendars may be full, we know the best work happens when we make time to be together—to share ideas, drive momentum, and strengthen the partnerships that move our region forward.

Our Annual Dinner was just the start for EDC! This summer, we’re continuing to bring together business and community leaders from across our binational region to connect around the innovation, industries, and opportunities shaping San Diego’s future. We’d love to see you at one (or more!) of our upcoming events:

San Diego Business Impact Awards:

Nominations due June 18 | 4:00 p.m. Together with JPMorganChase, we’re celebrating middle market companies creating meaningful economic impact across San Diego County. We are seeking nominations from companies across all industries with exceptional year-over-year growth. Apply before end of day June 18.

  • Plus: Join us to celebrate our top honorees on July 23 for an awards presentation and reception at the Scripps Research Auditorium.

Invest in San Diego Breakfast:

June 22 | 7:30–9:30 a.m. As part of BIO 2026, we hope you’ll join EDC, WTCSD, GO-Biz, IQHQ, and the San Diego County Water Authority for a conversation highlighting San Diego’s globally recognized life sciences ecosystem to an international audience. Hear from an inspiring panel of executives from Illumina, Daré Bioscience, La Jolla Labs, and Novartis, moderated by Biocom’s Miguel Motta. Space is limited, register now.

Summer Bash

Save the date: September 23. EDC’s annual Summer Bash is back! Join us in celebrating San Diego’s innovation ecosystem together with Alexandria Real Estate Equities, Inc. Registration coming soon; reach out to me to explore sponsorship opportunities.

And into Q3/4: Stay tuned for more opportunities to engage, including our Quarterly Committees, Inclusive Growth Roundtables, and the launches of our Go Global 2030 Report and the Defense Innovation Roadmap.

Thank you for being part of our community and for the role you play in making San Diego life-changing. We’ll see you soon.

With gratitude and respect,

Bree Burris
Bree Burris

Sr. Director, Communications & Community Engagement

A note from Mark: Annual Dinner Honorees 2026

By Mark Cafferty,

meet Our Life. Changing. Honorees

Dear EDC investors and partners,

As summer begins to draw near, our team at San Diego Regional Economic Development Corporation (EDC) is eager to kick off many of our signature programs and events just around the corner. None bigger than our Annual Dinner, underwritten by Point Loma Nazarene University.

Held again at Petco Park as a celebration to the community of investors, partners, and leaders who make our work possible, EDC’s Annual Dinner has become a yearly moment of reflection for me—not just to take stock of the work behind us or ahead us, but to think of how much our mission continues to evolve and adapt to the economy and community we serve.

We give out two honors, dubbed our “Life. Changing.” Awards: Two words that capture the essence of San Diego in so many ways, and two words that have become a bit of a mantra for our work and the way we see and promote the region.

But before they took on their current title, the Awards were named in memory of two San Diegans who embodied the leadership that defined a rapidly growing region and economy. One, Duane Roth the indomitable promoter of San Diego innovation, science, technology, and entrepreneurship. The other, Herb Klein revered for bringing people together for the greater good and going above and beyond professional roles and responsibilities to move San Diego forward.

I have always been proud of the individuals we choose to recognize at our Annual Dinner, as with each passing year, the awards have become a more powerful reflection of the organization we strive to be, and the people and institutions that inspire us the most.

This year, we recognize the continued investment, growth, and innovation of ASML—an international technology giant with great history in San Diego, and one of the most important global players in the semiconductor industry fulfilling chipmakers’ needs from manufacturing to software.

We also honor Robert Gleason—local executive, community leader, civic treasure, and President and CEO of Evans Hotels, one of our region’s most important tourism companies, and an individual who has truly changed the San Diego economy and community through his advocacy, service, engagement, and activism.

Continuing to celebrate all that makes San Diego creative and innovative—while also celebrating what makes it welcoming, inclusive, and good—has become a highlight of our work and a gift to the community that surrounds us. It is at the core of what makes our work so special. It is the very foundation of what makes our region so Life. Changing.

I hope you’ll join us on June 4 at Petco Park for our 2026 Annual Dinner—another fun, meaningful, and beautiful night of camaraderie, friendship, and recognizing and appreciating the very best of who San Diego is.

Join us june 4

With gratitude and respect,

Mark Cafferty
Mark Cafferty

President & CEO

More from EDC

  • See our impact in our Monthly Report
  • Apply by June 15—EDC and JPMorganChase are back for the second annual San Diego Business Impact Awards! Nominate your company and celebrate your local impact
    • Save the date to celebrate with us on July 23; registration details to come
  • Learn about Cross Border Xpress’ regional impact and 2030 expansion plan in our latest Investor Spotlight

 

Investor Spotlight: Cross Border Xpress

By Enya Castañeda,

As a nonprofit, San Diego Regional EDC is supported by the investment of more than 150 public agencies, companies, and organizations like Cross Border Xpress.

With these investments, EDC provides direct support, aligned with regional Inclusive Growth goals, to companies of all sizes to drive San Diego’s economic prosperity and global competitiveness. EDC sat down with Cross Border Xpress, which shared its insights as a bridge between the Cali Baja region and it’s impact and competitiveness.

Read more about Cross Border Xpress‘s regional impact and support for EDC.

Tell us about Cross Border Xpress and its mission.

Cross Border Xpress (CBX) is an international air terminal in San Diego, California, directly connected to Tijuana International Airport in Baja California, Mexico via a 390-foot pedestrian sky bridge.

With 37 direct flights to Mexico, China, and the U.S., and land connectivity to more than 50 communities in California, plus Phoenix, Las Vegas, and El Paso, it is a true air and ground travel hub.

As the main gateway for passengers between Mexico and California, CBX’s mission is to provide an easy and efficient way to travel between Mexico and the United States, ensuring an excellent and enjoyable experience for all travelers.

Additionally, CBX’s philanthropic arm, CBX Hand in Hand, which launched in 2020, contributes more than $350,000 annually to address the most pressing challenges in the Cali Baja region together with CBX’s passengers, business partners, and nonprofit allies. Through these efforts, CBX positively impacts the lives of more than one million people annually on both sides of the border.

CBX Hand in Hand’s latest campaign

Describe CBX’s impact over the last decade

CBX’s 10-year anniversary marks a monumental milestone for the company, an occasion for celebration, pride and recognition of the hard work of everyone who has been involved in its success during the past decade.

CBX was born out of a unique opportunity in the cross-border region: The need for an efficient and reliable alternative to air passengers crossing the border and facing long wait times—creating a true complementary airport for Southern California.

Since the opening, CBX has become the preferred gateway for travel in the region, playing host to more than 30 million total passengers. Becoming drivers of economic growth, CBX has created more than 700 direct jobs and generated $1.5 billion in annual economic impact. CBX is a major air and land transportation hub for Southern California, connecting the region with the Tijuana International Airport, which has grown from 22 to 40 destinations since 2015, with a network of buses and shuttles across the western U.S.

How has CBX collaborated with San Diego Regional EDC and its team?

San Diego Regional EDC is a key organization in the region and a strategic partner that shares a similar vision and goals to CBX. Throughout the years, CBX has worked with EDC’s international arm World Trade Center San Diego (WTCSD) to strengthen regional ties, promoting cross-border collaboration and boosting the economic development of the Cali Baja region.

Notably, CBX has contributed to WTCSD’s Binational Trade & Competitiveness study, which quantifies the Cali Baja region’s challenges, strengths, and growth opportunities across jobs, supply chains, and more.

What should San Diegans be on the lookout for ahead of CBX’s expansion?

As part of CBX’s long-term vision, the organization is advancing a comprehensive Master Plan for 2025–2030 designed to elevate the passenger experience, support regional economic growth, and strengthen our role in binational travel infrastructure.

Key projects currently in development include:

  • Arrivals area expansion
  • New Ground Transportation Center
  • Enhanced Food & Beverage offerings
  • On-site hotel
  • Quick Turn-around area
  • Car Service center

These investments reflect an ongoing commitment to innovation, efficiency, and delivering world-class service to every CBX traveler.

Interested in publishing an investor spotlight? Contact our team:

Enya Castañeda
Enya Castañeda

Coordinator, Investor Relations & Marketing Communications

A note from Taylor: San Diego’s workforce in 2026

By Taylor Dunne,

Dear EDC investors and partners,

Last month, EDC’s Vice President of Economic Development and Research Eduardo Velasquez reminded us that San Diego stands at an inflection point—where technological transformation is colliding with long‑standing economic challenges in ways previously unseen. His note highlighted a region defined by promise and pressure: Slowing innovation‑sector job growth, rising household incomes shadowed by affordability constraints, and AI reshaping the very nature of work.

A month into 2026, more questions than answers remain, especially when it comes to talent: What is the role of post-secondary education in our changing region? How is AI shifting jobs and industries? And what does this mean for San Diego’s early career talent, our region’s leaders of tomorrow?

Built on talent—but facing new realities

San Diego’s economic engine has always been its people. With more than 100 research and education institutions, our region has long produced the skilled talent that fuels innovation, defense, life sciences, and advanced manufacturing.

The good news: More San Diego students are completing degrees and credentials than ever before. The region has sustained progress in completions, even as the pandemic’s long‑term impacts remain murky. But the data also makes one thing clear: Post-secondary education is more critical than ever. Jobs requiring a bachelor’s degree or higher continue to grow at a significantly faster rate than those requiring less education. In fact, in 2025, San Diego added six times more jobs requiring a bachelor’s degree or more versus those requiring an associate degree or less.

Additionally, the growth of legacy industry clusters that have served as the backbone of San Diego’s global competitiveness—tech, life sciences, and manufacturing—is slowing down. While bright spots remain in emerging industries like cleantech and aerospace (namely defense technology) that are critical to the region’s future competitiveness, transformations in these industries and varied levels of AI integration represent significant changes to the entire U.S. economy. Their effects will ripple throughout the whole workforce. 

Take the cleantech industry, for example, as policy-backed efforts to decarbonize in California are leading to more electrification. As buildings modernize, we might expect increased need for electricians, while the need for gas-line plumbers decreases. The auto mechanic historically focused on combustion engines must now become familiar with hybrid and electric motors. And the manufacturing company that embeds machine learning and automation now requires a person who can analyze and tell a story with the resulting data.

A future workforce that doesn’t yet see a future

Across the U.S., young college‑educated workers are facing a “unique convergence of structural forces” that have severed traditional entry points into white‑collar work.

AI is accelerating this shift. Automation and augmentation are happening within jobs, not just across them. The occupations where automation potential is high are the same ones where augmentation potential is high—meaning AI may not necessarily eliminate an occupation, but rather transform how an employee executes their tasks. 

With lower barrier to entry tasks most exposed to automation, the entry-level or new graduate workforce risks being edged out of opportunities to launch. Meanwhile, the nature of the tasks exposed to augmentation will require mid-level workers to continue upskilling to remain competitive. 

As for long-term impacts? It’s too early to tell. San Diego’s labor market data does not yet reflect an overhaul of entry-level roles. Job growth across innovation industries at all levels has declined over the last few years, and while entry-level job growth has declined slightly faster, it has not been the job elimination of our nightmares. 

What remains constant in our conversations with employers across industries and occupations is a need for soft skills that will never be automated. Skills like communication, empathy, and problem solving are more fashionable than ever. In fact, this demand has been so persistent that workforce developers and educators have taken to calling these “durable” skills—though figuring out how best to cultivate them in students may be the next great challenge. 

In a time of transitioning tech, too, regional employers are doubling down on opportunities to future-proof their workforce. We’ve heard from San Diego companies that are making a deliberate effort to traditionally train early career employees in the skills AI could support, both to strengthen institutional knowledge and develop future leaders. And local tech heavyweights are continuing to proactively invest in both tomorrow’s talent and technology, maintaining internship programs that convert as many as three in four interns to full-time roles and leveraging new technologies early to instill technical skills in the emerging workforce.

Lean in with us

To meet these challenges, EDC is doubling down on initiatives that align education, industry, and talent. Through regional and even national partnerships, we will continue to facilitate work-based learning like internships and apprenticeships, and equip the region to better understand its labor market needs.

Here’s how you can lean in:

  • Host a summer intern from a Verified Program: All intern hosts will work with an employer of record and have access to a pre-vetted batch of resumes. Small businesses may qualify for interns’ wages to be subsidized or fully covered. Learn about our Advancing San Diego internship program.
  • Hire from Verified Programs in San Diego: These local programs are employer-verified for teaching in-demand skills as well as serving a diverse student population. To connect with a Verified Program, reach out to EDC.
  • Help us collect critical regional talent data: With so many remaining questions, it has never been more important for training and education institutions to keep a pulse on future talent demand. Our talent data dashboard, annual talent survey, and talent demand reports help local education programs prepare San Diegans with the skills your company needs. If your company is experiencing shifts in talent needs, we want to hear about it.

San Diego’s future workforce is diverse, ambitious, and full of potential—but only if we build the systems that allow every resident to participate in and benefit from our innovation economy.

Your collaboration and investment—whether through hiring, training, curriculum partnerships, or direct support of EDC initiatives—continues to ensure that San Diego can cultivate the talent that creates, attracts, and retains cutting‑edge companies, strengthens our innovation clusters, and secures San Diego’s economic future.

Contact SDREDC
To learn more, please contact us.

More FROM Advancing SaN Diego

More on inclusive growth

A note from Eduardo: Looking into the 2026 crystal ball

By Eduardo Velasquez,

An inflection point

As another year begins, I sit with my crystal ball once again to see what we can glean from the data we’ve received this past year and what implications it may have for our region’s economic growth in the year ahead.

The past year told a complex story, driven by uncertainty. On the surface, the U.S. economy performed remarkably well, achieving 4.3 percent real GDP growth in Q3 2025, representing an acceleration from a year ago. But this growth has been buoyed by unprecedented investment in AI led by a handful of companies, potentially masking deeper structural shifts beneath the surface.

The U.S. achieved this growth while creating just 584,000 jobs—roughly one-third the rate seen in the past decade. And while San Diego gained its fair share, adding 5,800 jobs through November 2025, all our job growth was principally concentrated in higher education, healthcare, and local government.

In 2026, San Diego stands at an inflection point—one where technological transformation collides with traditional economic challenges in ways we haven’t seen before.

Innovation industries are losing steam

Our region’s innovation engines—the traded clusters that have long defined San Diego’s competitive advantage—are sputtering. Cumulative job growth across aerospace, life sciences, tech, and manufacturing has plateaued or declined from pandemic-era peaks. Cleantech continues to add jobs, though it represents a smaller sliver and is also growing at a slower pace than in previous years. More concerning, it’s not just leaner firms we’re seeing, but fewer firms altogether. Firm growth across these key industries has stagnated, with only defense tech startups providing a bright spot in an otherwise sobering picture.

 

This matters because innovation industry jobs have an outsized impact on our economy, with each added job supporting another two jobs elsewhere in the economy. When these jobs contract, the ripple effects are significant.

So what’s going on? In part, it’s a tale of structural transformation. Professional, scientific, and technical service jobs, which our innovation cluster relies on, declined 3.3 percent through November 2025. Meanwhile, an additional 550,000 square feet of office space were vacated during the year, bringing total vacant space to 11.3 million square feet in a year with zero new construction. 2025 showed our region’s economy is increasingly dependent on fewer knowledge workers and thus less office space to host those workers.

Yet, investment is happening. Nationwide, construction spending toward data centers is set to eclipse that of traditional office buildings—a trend that accelerated dramatically after ChatGPT’s release. Infrastructure investments are building for servers, not people.

AI is picking up the slack, for now

Amid this disruption comes a silver lining—AI may be delivering what all new technologies promise: Productivity. Looking at inflation-adjusted average wages as a proxy for productivity growth, San Diego’s innovation industries have recovered from the pandemic. AI may be responsible for this recovery, enabling workers to do more with less. This could help explain the decline in local job postings, which fell six percent in 2025.

The question is whether this productivity boost translates into broader prosperity or simply allows companies to operate with smaller teams.

San Diego’s talent landscape reflects this uncertainty. While the value of a degree has been questioned more than perhaps any time in history, it still brings higher income and greater job security in our region. In the past decade, more than twice as many local jobs have been added that require a bachelor’s degree or higher than those requiring associate’s degrees or less. This trend accelerated in 2025, with jobs requiring bachelor’s degrees or higher outnumbering others by a factor of six.

Yet, new graduates are struggling in a job market that increasingly favors experience alongside credentials. The national unemployment rate for young college graduates stands at 4.8 percent, up more than a percentage point compared to before the pandemic.

The market signal is clear: Disruption continues to favor those with degrees and experience, even as the nature of work itself transforms.

Affordability is not a hoax; it’s an enigma

Incomes are up and people are spending their money, but they’re not happy about it. That’s because the essentials like housing, childcare, energy, and transportation continue to get more expensive—local energy prices, for instance, are up nine percent year-over-year as of November 2025.

Housing affordability remains the single biggest threat to regional prosperity. While San Diego’s median household income has increased 25 percent since 2020—a welcome development—the cost of homeownership has far outpaced these gains. The median-priced home fell slightly to $990,000 in Q3 2025, requiring a household income of $263,000 to afford the monthly mortgage payment. Even those looking to rent are facing an average monthly outlay of $2,900, which makes San Diego one of the most expensive counties to rent in the nation.

There’s a glimmer of hope: San Diego home sales increased 14 percent year-over-year in September 2025, suggesting some movement in a frozen market.

Yet meaningful housing market recovery will remain elusive until mortgage rates drop substantially enough to free homeowners locked into historically low rates or make room for significant new supply.

The year ahead

These trends—the pace and composition of job growth, AI’s impact in the demand for talent, and housing affordability—will define San Diego’s 2026.

Can we leverage regional strengths to capture new growth opportunities, particularly in defense tech where startups show momentum? Will hiring priorities shift to tap new pools of talent as employers rethink what it means to be a skilled worker? How do we make room for more housing in a region where working families are increasingly priced out, while the office is increasingly empty?

The answers aren’t in my crystal ball.

They require deliberate action through an intentional, inclusive economic development agenda. We must make sure our region—and our state—is a place that not only cultivates great ideas but also enables the realization of those ideas into solutions, products, and jobs. We must make it easier for builders to build infrastructure and easier for businesses to do business.

In 2026, EDC will work to position San Diego as the destination for defense tech investment, build pipelines to better address employers’ evolving talent needs, and identify opportunities to replace unused office with much needed housing and infrastructure for working families.

But we can only do this with and through you—our partners across industry and academia, local and state government.

Now more than ever, our goal remains constant: To maximize San Diego’s economic prosperity and global competitiveness through meaningful partnerships with our 150+ investors and regional stakeholders. We know where we are and where we need to go. Getting there in 2026 will require resolve, creativity, and bold action—together.

LGSD!

Eduardo Velasquez
Eduardo Velasquez

Vice President, Economic Development & Research

 

Explore economic trends from prior years:

More FROM EDC’s research bureau

More on inclusive growth

A note from Mark on Giving Tuesday

By Mark Cafferty,

Dear EDC board members, investors, and friends,

“Giving Tuesday” officially began in 2012 as a fundraising campaign associated with the 92nd Street YMCA in New York City. Today, it has grown to become a “global generosity movement, unleashing the power of people and organizations to transform their communities and the world.” In just 13 years, the effort has gone from raising a few million dollars to support a single cause/campaign to raising billions of dollars for organizations and causes across the globe.

With the Thanksgiving holiday behind us and the year-end holidays just weeks away, we encourage everyone to continue to practice and promote the generosity and kindness that has had such a strong impact in our community over the last few months and throughout this past year. Our own local ‘generosity movement’ has meant the world to individuals, families, and valued institutions during a very difficult time.

Among the list of important and valuable causes, initiatives, and organizations within our region, one effort that remains near and dear to my heart—and one that our work at EDC has become fully aligned with—is that of youth employment and internship programs. As many of you know, I started my career working in school-to-work and school-to-career programs in Boston’s high schools and community colleges. Decades later, I have seen how those very programs changed and improved lives while strengthening and supporting the city’s economic growth and prosperity. We have started to see the same results here in the San Diego region through our Advancing San Diego program, partners, and the Border Region K-16 Collaborative.

As we head into 2026, Advancing San Diego’s post-secondary internship program that has been so generously supported by JPMorganChase and the state of California over the last few years is seeking new and sustained funding and support. Recognizing it as both a critical and important talent recruitment strategy for employers and an impactful work and learning experience for our local first-generation college students, we are hoping that far more San Diego-based employers will lean in to support the program in 2026. For more information on hosting an intern at your business this coming summer, please contact Taylor Dunne. Just hosting and supporting one more intern makes a world of difference.

And for those who cannot host an intern but still wish to support these efforts financially, we encourage you to make a donation to our 501(c)3 to ensure we can maximize the number of young people we place this summer at small and growing businesses. A $7,500 donation will fully cover the wages for an intern for the entire summer at a San Diego small business. A $500 donation will support the transportation, professional clothing, and any other support services needed by most students (especially those who are from more under-resourced backgrounds). And any donation will help support, grow, and advance this important cause.

We know that there are so many important initiatives and organizations that need support right now, but we also know that this is one way where your donation can help individuals and families within our region while also strengthening our economic outlook for the future.

As always, we cannot thank you enough for your leadership and support over the past year, and we look forward to working by your sides to make the year ahead as strong and stable as possible for our region’s businesses, workers, and households.

May all of your days ahead be merry and bright.

With gratitude and respect,

Mark Cafferty
Mark Cafferty

President & CEO

Support the internship program

Read EDC’s monthly report

Inclusive Growth Spotlight: San Diego State University

By Enya Castañeda,

EDC’s Inclusive Growth blog series highlights and celebrates San Diego companies and organizations helping drive economic growth and progress toward San Diego’s 2030 Inclusive Growth goals, launched in 2018 and informed by a partnership with the Brookings Institution.

Thriving households in San Diego

Decreasing affordability in San Diego threatens progress toward all the goals and disproportionately impacts communities of color. Household incomes have not kept pace with the cost-of-living reflected in basic household needs such as transportation, grocery expenditures, and childcare, leaving only one in 10 households able to afford the median-priced home in the region. As of 2023, San Diego has added 49,916 newly thriving households (chart below) bringing the total number of San Diego’s thriving households in the region to 610,983—51.7 percent of total households.

Read the latest Update

 

Meet SDSU’s Mission Valley Innovation District

San Diego State University (SDSU) is a top-tier public R1 institution that provides transformative educational experiences for more than 43,000 students in person and online, ranking among California’s leading public research universities. Building on this foundation, the SDSU Mission Valley Innovation District extends the university’s mission by fostering collaboration between academia and industry. The 1.6 million square-foot hub for office, technology, and research space creates new career pathways for students, drives regional economic growth, and advances innovative solutions to pressing societal challenges.

Promoting thriving student and faculty households

A significant challenge that SDSU faces in supporting thriving households is the rising home prices and rental costs which far outpace income growth—making it increasingly difficult for students, faculty, and staff to live near campus. For students, housing insecurity can affect academic success and well-being; for employees, it can hinder recruitment and retention, particularly among early-career professionals and those with families.

As SDSU expands through projects like SDSU Mission Valley, the university continues to explore partnerships, policy solutions, and innovative models that increase access to attainable housing while maintaining the quality and sustainability of the surrounding community. Maintaining affordability is a central focus so that students and employees can live and thrive where they learn and work—all essential to advancing SDSU’s mission of opportunity, equity, and regional impact.

Addressing affordability on multiple fronts

SDSU’s Mission Valley Innovation District is designed to advance economic opportunity and improve regional affordability through intentional planning and partnerships. Recognizing housing costs as a primary barrier to thriving households, SDSU Mission Valley will include more than 4,600 residential units, with 10 percent designated as affordable housing. The project’s transit-oriented design connects directly to the trolley, reducing transportation costs and improving access to employment and education. In addition, SDSU continues to explore partnerships that expand childcare options and support working families within the Innovation District.

Hear from SDSU:

“SDSU and EDC have a shared commitment to advancing economic growth, regional talent development, and innovation. SDSU continues to invest in EDC, because EDC serves as a vital convener of regional stakeholders, bringing together leaders from government, education, and the private sector who also share common priorities and challenges. Through EDC’s programs, roundtables, and trade delegations, SDSU gains valuable connections and insights that strengthen collaboration across sectors. EDC’s data-informed approach supports evidence-based decision-making, helping partners align strategies to address regional needs in workforce development, housing, and economic growth. This collective effort directly advances SDSU’s mission of driving opportunity and innovation across the region.”

Join the movement

Progress on EDC’s 2030 Inclusive Growth goals is only achievable with and through the region’s employers scaling innovative and intentional solutions. Anchor institutions like SDG&E are helping to collectively pave the way toward a more inclusive regional economy. Join us:

To learn more and get involved in EDC’s work, contact:

Lauree Sahba
Lauree Sahba

Chief Operating Officer