Tag: 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

Local procurement means big impact: The power of the Anchor Institution Collaborative

By Lindsey Silvia,

Collaboration, one of San Diego’s greatest strengths, is at the core of the EDC’s Anchor Institution Collaborative: A partnership between the region’s largest buyers committed to using their combined purchasing power to strengthen our local economy.

Launched in 2020, the Anchor Institution Collaborative brings together San Diego universities, hospitals, utilities, and large companies around a shared goal of supporting small, local, and diverse businesses to drive inclusive economic growth.

Working with and through our largest buyers

EDC’s role has always been to work with and through large employers and entities that are physically bound to our region to create change that reaches across the business ecosystem. Local anchors—including CSU San Marcos, the San Diego International Airport, Dexcom, and others—have a powerful influence on how money and opportunity flow through the region.

These anchors drive real impact in San Diego, by buying locally and contracting with small and diverse suppliers. In 2024 alone, seven regional anchors we surveyed spent a combined $763 million with local diverse suppliers and $245 million with regional small businesses, representing 16 percent and five percent respectively of their total combined spend.

Looking ahead to 2026, the collaborative will continue to help anchor institutions identify strategic opportunities to expand local impact, through shared learning, goal-setting, and data collection. By continuing to align spend toward local, small, and diverse businesses, anchors can help create a stronger, more resilient economy for all of San Diego.

Investing in San Diego’s small business economy

Small businesses remain the backbone of San Diego’s economy, now accounting for 99 percent of all businesses and 59 percent of all jobs in the region. These companies create jobs, spark innovation, and bring character to every community.

While many small businesses struggle to compete with larger firms for contracts and cannot always offer comparable wages, securing a major contract from a large buyer is often a major turning point that enables these businesses to grow local quality jobs and better weather economic downturns. Our entire region prospers when small businesses can engage, compete, and win these contracts.

While spending toward small business represents only a portion of total anchor spending in San Diego, it signals a strengthening commitment among major employers to partner locally as global supply chains continue to shift. Of the data reported by the seven anchors surveyed, the share of spending directed toward small businesses increased by an average of 19 percent from 2023 to 2024. Though significant opportunities remain for anchors to further expand local procurement (particularly with small businesses), this growth reflects a meaningful deepening of their investment in the regional economy.

Now is a prime opportunity for small businesses to take advantage of this shift—anchor institutions are continuing to evolve their supply chain strategies to include supplier diversity initiatives, streamlined procurement processes, and new tools to connect with small vendors. For example, SDG&E’s Level Up webinar series is a collaboration with the San Diego and Imperial Small Business Development Center Network to help small businesses to gain the tools and confidence to compete for big contract opportunities. And UC San Diego’s Small Business First program works to direct contracts between $10,000 and $250,000 to certified small and diverse businesses when no large sourcing agreement exists. These efforts not only expand opportunities for small businesses but also maximize our region’s shared prosperity.

What’s next for the Anchor Institution Collaborative

In the coming year, EDC will support both big buyers and small businesses through continued partnership among the Anchor Institution Collaborative.

EDC will continue to help large buyers in the Collaborative expand contracting opportunities through shared learning, goal-setting, and data collection.

In turn, the Collaborative will invest in small business growth and job creation by developing a playbook for vendors, creating a guide outlining the requirements for doing business with anchor institutions, and exploring a fund to help small businesses overcome financial barriers such as insurance premiums, certifications, and compliance costs.

The goal is simple: To make San Diego a place where large institutions and small businesses grow together—where every purchasing decision contributes to a more inclusive, resilient, and thriving local economy.

A collective effort

Economic development doesn’t happen in isolation. It requires inclusion and collaboration across sectors, shared accountability, and a long-term commitment to the region’s people and businesses. The Anchor Institution Collaborative is proof that when our largest employers work together to invest in and lift the smallest, we can collectively strengthen our local supply chain and build economic resilience.

As we look to the year ahead, EDC invites big buyers—whether you represent a healthcare system or a homegrown company, a sports team or an education institution—to join the Collaborative and share resources, expand opportunity, and work together to ensure that San Diego’s growth benefits us all.

Interested in leveraging your company’s spend to support San Diego small businesses?

GET INVOLVED

To learn more, contact:

Lindsey Silvia
Lindsey Silvia

Sr. Manager, Economic Development

Advancing San Diego summer internships bridge education and industry

By Emily Chowaniec,

Advancing San Diego: Building talent pipelines

EDC’s Advancing San Diego (ASD) internship program, run in partnership with the Border Region Talent Pipeline K-16 Collaborative and Imperial Valley EDC, has transformed how students across San Diego gain early career experience, while helping local businesses address talent needs. In Summer 2025, the ASD program placed 210 interns at 110 companies across San Diego and Imperial Counties, creating an invaluable bridge between education and industry in high-growth, high-wage fields like engineering, computing, and business. This program plays a crucial role in addressing regional talent shortages, helping local companies access vetted, diverse talent and offering students paid, hands-on learning opportunities in high-demand industries.

Summer 2025 by the numbers

*Priority populations include low-income individuals, first-generation college students, current community college students or community college transfers, veterans and active-duty military students, and students with disabilities

Addressing the talent gap with community impact

At the heart of ASD’s mission is a commitment to reaching under-resourced communities, ensuring that students from diverse backgrounds gain valuable career experience while helping local businesses address critical talent needs. Companies apply each year by early spring to host students from Advancing San Diego Verified Programs to be interns. These Verified Programs are selected based on industry-determined criteria, including industry engagement, diversity, equity, and inclusion, as well as curriculum that teaches the most in-demand skills in computing, engineering, and business. This approach ensures that students’ skills align with evolving workforce demands, enhancing the overall impact of the internship experience.

EDC recruits local small to medium-sized businesses to host interns, and once companies are selected, students from Verified Programs apply for available internship roles. With more student applicants than available positions, students from priority populations receive preferred access to internship positions. In Summer 2025, 82 percent of interns identified with one or more priority populations, up nine percent from 2024. Importantly, the program provides financial support covering intern wages at a competitive rate. In 2025, local companies saved more than $1 million in payroll costs, ensuring businesses can prioritize mentorship and on-the-job training over recruitment logistics.

Real-world experience and career advancement

Each year, the internship program provides students with valuable work experience directly linked to their academic pursuits, equipping them with practical skills and career confidence. At the same time, companies benefit from student contributions. Surveyed companies shared that hosting interns improved their outlook on early-career talent: 91 percent agreed or strongly agreed that the program increased their likelihood of hiring a university student, and 82 percent said the same for community college students. For employers, this means a pipeline of highly motivated, well-prepared candidates who bring immediate value.

Day in the Life of a San Diego Intern video campaign

During the 2025 summer internship program, ASD launched its first “Day in the Life of a San Diego Intern” video campaign, inviting interns to share a glimpse into their internship experience through short videos. Thanks to generous donations from the San Diego Padres, San Diego FC, San Diego Wave FC, San Diego Zoo Wildlife Alliance, and SeaWorld San Diego, ASD was able to give five lucky winners tickets to signature San Diego experiences. The video campaign gave ASD interns the opportunity to share their professional experiences with the local business community and increase exposure of careers in San Diego to diverse groups of local young talent.

“After our sixth year partnering with this valuable program, Left Coast Engineering has hosted more than a dozen interns across electrical, mechanical, and aerospace engineering, plus computer science majors. As a small business here in San Diego since 1999, we see this as an opportunity to help develop and equip these engineering students with both the skillsets and mindset for successful product development. Our goal is to help engineers graduate with more experience and more value to benefit any hiring company.”

—Anita Baranowski, CEO, Left Coast Engineering

Is your company interested in hosting summer interns in 2026?

Apply now

Learn more about San Diego’s workforce trends and insights

Explore the talent dashboard

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

Emily Chowaniec
Emily Chowaniec

Coordinator, Talent Initiatives

Report: Meeting San Diego’s healthcare talent needs beyond 2025

By Bridgette Coleman,

Strengthening San Diego’s RN pipeline and expanding specialty training

Healthcare is San Diego’s second largest sector, supporting 160,000 jobs throughout San Diego County and providing critical care for our community. However, a national nursing shortage and aging population are intensifying the demand for skilled healthcare professionals. Simultaneously, communication breakdowns between regional industry and education are leading to misunderstandings around the supply and demand of talent.

To better understand San Diego’s regional demand for talent, EDC’s Advancing San Diego program conducted a comprehensive talent demand survey focused on priority roles in healthcare. The survey engaged nine of the region’s largest healthcare providers, collectively employing 66,000 and operating more than 175 regional facilities, to understand real-time data around critical nursing positions.

Key findings

  • Like much of the nation, San Diego faces a critical shortage of skilled nurses, with the highest demand for Registered Nurses (RNs). Labor market information indicates that the region will need more than 1,500 additional RNs in the next three years, but data from this working group revealed that new graduate nurses—those who have recently completed a training program—account for just 300 of the in-demand roles. Meanwhile, the region is graduating around 2,000 new RNs each year.
  • Most of the future regional demand for RNs will focus on specialization. Employers identified Operating Room RNs as the highest priority for specialty roles.
  • Regional healthcare employers reported a misalignment in the training of Radiological Technologists. 100 percent of surveyed employers said that cross-training Radiologic Technologists and Computed Tomography (CT) Technologists would add value to their organizations and emphasized a need for additional Imaging Technologists (X-ray, CT, Sonography, etc.) in the region.

Healthcare Talent Demand Report 2025

a critical need for specialty nurses

While traditional labor market data shows more than 15,000 regional job postings for RNs in 2024, the bulk of these postings are actually for experienced and specialty nurses, not entry-level roles. At the same time, regional education programs are graduating close to 2,000 RNs each year. The available labor market data does not differentiate demand based on entry-level versus experienced roles, creating a misalignment between employer need and the talent pipeline.

This misalignment illustrates how readily available labor market data—often the primary source for education institutions and policymakers—can misrepresent actual workforce needs

EDC’s employer working group verified this, reporting that regional demand for specialty RNs significantly outpaces demand for new graduate RNs, and ranked Operating Room, ICU/Critical Care, and Labor & Delivery RNs as their top hiring priorities.

Furthermore, as many employers pointed to the oversaturation of new graduate RNs as one reason for the frequently cited shortage of clinical placement opportunities, hospitals must balance the need to upskill incumbent nurses with the growing demand for new grad placements, all while working with an already strained pool of available preceptors. While many hospitals invest heavily in internal training to grow their staff, this model puts the burden of training solely on hospitals who are already feeling the strain of a limited workforce. Limited clinical placement capacity, high costs, and competition across healthcare systems make it increasingly difficult to keep pace with growth and turnover.

Across the nation and in San Diego, specialty RNs remain at the heart of quality care and operational efficiency, nursing career mobility. They support the next generation of nurses through training and precepting – an important factor in retaining talent in the region. Ensuring a steady pipeline of these skilled professionals is not only a workforce issue—it’s also essential to driving the future of San Diego’s innovative healthcare systems and standards of excellence.

San diego’s strong healthcare future

As hospitals focus on building solutions for specialty training, the region must also continue to strengthen the new graduate RN pipeline.

“A balanced healthcare workforce means investing in both new talent and advanced training. By working together as a region, we can create innovative solutions that meet today’s challenges and ensure San Diego’s healthcare system thrives for years to come.”

– Elmerissa Sheets, Senior Director Talent Acquisition and Development, Scripps Health

New graduates trained through local institutions form the foundation of San Diego’s nursing workforce and will be essential in healthcare systems’ ability to meet rising demand.

From there, San Diego’s healthcare providers have a critical opportunity to secure a strong regional talent pipeline and ensure healthy communities into the future—by investing in new graduate RNs and accelerating their pathways into specialty roles.

Explore the full report to learn more and see how the group is beginning to build solutions.

Explore more Talent Demand Reports

Check out Talent Demand Reports across other priority sectors to stay up to date on workforce trends in San Diego.

Dive into the data

Use EDC’s Data Dashboard to explore how local education programs align with regional workforce needs and identify equity gaps in real-time. The dashboard highlights race and gender disparities, program completions, and connections to priority occupations—all designed to support more data-informed talent development efforts in San Diego County.

To learn more and get involved in EDC’s work, contact talent@sandieogbusiness.org.

Bridgette Coleman
Bridgette Coleman

Sr. Manager, Talent Initiatives

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

Inclusive Growth Spotlight: SDG&E

By San Diego Regional EDC,

EDC’s Inclusive Growth blog series highlights and celebrates local companies and organizations helping drive economic growth and progress toward San Diego’s 2030 Inclusive Growth goals.

Among the regional goals, EDC identifies increasing quality* small business jobs in San Diego as an economic imperative, with small businesses representing 99 percent of all firms in the region and accounting for 60 percent of total employment—outpacing the national average. Despite significant contributions, small businesses struggle to keep up in an increasingly expensive market.

Small, localized investments can drive quality job growth in small businesses

With a goal to add 50,000 new quality jobs in small businesses by the end of the decade, the latest data shows a surge in progress after years of steady recovery. In 2024, the region added 43,449 new quality small business jobs, marking an increase of about 3,000 jobs since 2023 and the closest we have ever been to reaching the goal.

While the significant rise in quality jobs is reassuring, employer-led efforts to support small businesses remain critical to the future of the region’s economy, and San Diego Gas & Electric (SDG&E) is among the local institutions contributing to the progress.

Read the latest Update

SDG&E’s commitment to supplier diversity in procurement spending

SDG&E has been proudly powering the regional economy for more than 140 years. The company was founded in 1881 to supply gas for streetlights when the City of San Diego had a population of just over 3,000. Today, SDG&E serves 3.7 million consumers spanning 25 communities in San Diego and southern Orange counties. As an anchor institution in the region, SDG&E is committed to delivering clean, safe, and reliable energy while fostering inclusive economic growth through its supply chain.

In 2024 alone, SDG&E had nearly $3 billion in procurement spending and billions more in economic impact, fueling local businesses, creating jobs, and strengthening the regional economy. Nearly 45 percent of the utility’s total procurement spend in 2024 was with diverse suppliers, including enterprises owned by minorities, women, veterans, people with disabilities, and LGBTQ individuals. Notably, $632 million of SDG&E’s spend in 2024 was in San Diego County.

Every year, SDG&E works with hundreds of suppliers of all sizes, with a wide range of offerings to meet the needs of its diverse customer base and achieve local and statewide goals for clean energy, safety, and reliability. SDG&E’s impact extends beyond energy infrastructure; its employees give back to the community through thousands of hours of volunteerism, and donations to local nonprofits to advance economic prosperity, STEM education, and other causes. Interested in doing business with SDG&E? Fill out the Supplier Interest Form here.

How SDG&E supports job creation and growth in the region

Recognizing that local, small, and/or diverse businesses face challenges in navigating procurement processes and requirements in the energy world—including prerequisites such as insurance and safety certifications—SDG&E has a dedicated responsible sourcing team to support suppliers through that process. The team focuses on supplier engagement and development, supply chain sustainability, and supplier risk management, with the goal of creating a more competitive, innovative, and resilient supply chain.

Supplier diversity from multiple lenses

Having a diverse set of local firms varying in size and location brings different ideas to the table, which helps mitigate risks associated with group think, supplier over-consolidation, and over-concentration. SDG&E’s responsible sourcing team has contacts in industries beyond energy—so even if the utility doesn’t need your good or service, the team may know someone else who does.

“As much as possible, we try to buy local to help create jobs and support our regional economy. Our team has long prioritized an inclusive and diverse supply chain, including spending more than $1 billion last year with certified diverse businesses,” said Dan Skopec, SDG&E Senior Vice President and Chief Regulatory Officer, and EDC Board Member. “Growing our local supplier base has also become more important because of global supply chain disruptions stemming from geopolitical events and tariffs.”

Direct outreach, programs, and local partnerships support small businesses

SDG&E conducts extensive outreach to local small and/or diverse suppliers and provides technical support, often on a one-on-one basis. The team also connects suppliers with resources provided by other partner organizations to develop and support suppliers, including the Small Business Development Center (housed at Southwestern College), The Veterans In Business (VIB) Network, Women’s Business Enterprise Council (WBEC)-West, Building, and DisabilityIN, to name a few. These organizations help address challenges such as insurance barriers, access to capital, and cybersecurity requirements.

As an active participant in the company’s competitive solicitations, the responsible sourcing team conducts research to identify qualified small and diverse suppliers for consideration by primes and SDG&E business units. The effort also makes procurement opportunities more accessible to smaller suppliers, working with project teams which break large projects into smaller segments to bid them out.

Outside of its responsible sourcing program, the utility also offers support to small businesses looking to electrify their fleet or seeking energy management coaching.

SDG&E small business support:

Continued investment in EDC is an investment in our community

SDG&E has been a supporter of EDC for the past 25 years. This long-standing collaboration is the result of a shared commitment to advancing economic prosperity and inclusive growth in the region. SDG&E supports EDC’s mission to mobilize business, government, and civic leaders around strategies that enhance San Diego’s global competitiveness and economic resilience. The utility proudly engages with EDC as an investor and member of the board of directors, and involves senior officers in various programs and initiatives, bringing SDG&E’s top talent to the table.

EDC’s standout programs/services for SDG&E include the Anchor Collaborative, Advancing San Diego, Community Explorer data tools, and the MetroConnect export accelerator, which provide critical infrastructure for regional growth.

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:

*A quality small business job is defined as one provided by a company with fewer than 100 employees and that pays at least $24.48 per hour and provides healthcare benefits.

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

Bree Burris
Bree Burris

Sr. Director, Communications & Community Engagement

A note from Mark in September: From classrooms to careers

By Mark Cafferty,

“Summer has come and passed
The innocent can never last
Wake me up when September ends.”
—Green Day

EDC investors, board members, and partners,

It’s that time of year again. If you happen to be a parent or grandparent of a certain age, live near a college or university, or work with or adjacent to higher education in any way, you know that more than 200,000 students have just made their way back to campuses, classrooms, dorm rooms, and lecture halls across our region. All ages and backgrounds. Residents and commuters. Adult learners and recent high school graduates. Hopeful. Motivated. Excited. All the things a region could and should hope for as it looks to grow and sustain a world-class economy and a world-class workforce.

To know and understand anything about the history of San Diego and our economy is to know and understand the value, strength, and importance of higher education. The critical role that our universities, community colleges, and learning communities have played over the last several decades cannot be overstated. As an economic development community, we must never forget what an important role they have played in growing and diversifying our region.

Yet as classes begin this year, unprecedented challenges continue to mount for San Diego and for our nation’s higher education institutions. Federal funding cuts; legal battles for individual universities, systems, and student populations; escalating costs, and constant threats and heated rhetoric coming from Washington, D.C. are all creating strains, burdens, and pressures that will test the system like never before. Even more so within the State of California. But as we look toward an uncertain future, let us continue to draw inspiration, strength, and resolve from the certainty of the past.

The story of higher education in the San Diego region continues to be one of inspirational growth and resilience against the backdrop of near constant challenge. Over the last century, our colleges and universities have grown from educating a few hundred students a year to hundreds of thousands of students a year. Through world wars, depressions and recessions, the rise and fall of industries, near unthinkable technological and scientific advancement, and an almost unimaginable public health pandemic, they have not only endured—they have thrived. As millions of learners have walked across stages to earn their diplomas, they have walked out into our community to start careers, grow businesses, and power industries. The San Diego economy has grown around them and because of them. And it still does.

A new chapter of history surrounds us. The stakes are certainly high for the education community and for the growth and sustainability of our economy. How we react and respond to this moment will tell future generations a great deal about who we were. And someday, if I should appear anywhere in those historical stories and records, you will most certainly find me standing side by side with our leaders and partners in higher education—right where I hope to find all of you as well.

Wishing you well this September,

Mark

P.s., EDC and Junior Achievement are surveying businesses to understand the benefits of hosting interns. If your San Diego company has recently hosted an intern, please share your insight.

Mark Cafferty
Mark Cafferty

President & CEO

STAY ENGAGED WITH EDC

Addressing the talent gap through inclusive innovation

By Taylor Dunne,

A regional call to action

In May, San Diego Regional EDC hosted its quarterly convening on the Inclusive Growth goal focused on skilled talent. With more than 50 leaders from private companies, educational institutions, and nonprofit organizations, the discussion focused on creative ways to grow San Diego’s innovation economy workforce. Participants engaged in critical conversation about the ways work-based learning, credit for prior experience, and new forms of education funding will help the region reach its skilled talent goal.

Within the Inclusive Growth framework, the talent goal is the only one measured in annual cohorts. Each year, EDC tracks the number of San Diegans completing a post-secondary education within six years of high school graduation. The goal is to see 20,000 newly skilled workers in San Diego each year.

Post-secondary education completions include certificates, associate’s degrees, bachelor’s degree and post-graduate degrees. The data focuses on students that completed high school in San Diego County, capturing their post-secondary completions regardless of where they went after high school graduation. The goal is driven by two factors:

  1. A thriving innovation economy and evolving technology in every sector mean that most of the jobs being added to the economy require a post-secondary degree.
  2. As San Diego’s high cost of living continues to threaten talent attraction into the region, it is crucial to ensure access to quality jobs for current residents.

For a full breakdown on the purpose of the goal, take a look at the original report.

The goal update

Of the 31,510 students that graduated from a San Diego high school in 2018, 12,850 of them had completed a post-secondary education by 2024. While we did see a one percent decrease from the last report, completions have generally remained consistent following the largest recorded increase from 2020 to 2021. We are not yet seeing the impacts of the COVID pandemic, and likely will not for another two years.

San Diego K-16 Students have sustained PSE completion rates

A double-click into degree completions

When we look one layer deeper at the students that completed a post-secondary degree by 2024, the data reveals good news for San Diego. The demographic distribution of degree-completers is generally reflective of the region’s demographics, and the areas of study are evenly distributed, with Business Administration boasting the highest portion of graduates. Nevertheless, when comparing the types of degrees conferred from 2020 to 2023, there was a decrease in bachelor’s and associate degrees and a significant increase in awards of less than two academic years. With most of the jobs being added in San Diego’s innovation economy requiring a bachelor’s degree, there is a crucial need for stackable credentials. These credentials would allow certificate holders to follow the path to a bachelor’s degree but offer the option to pause along the way while still being qualified for a good job.

The ability to move between the education system and a career is a win for everyone involved. Employers often struggle with unrealistic expectations or an inability to apply theory when hiring people from the academic system with little to no time in industry. On the student side, the cost of getting an education can be a barrier to student completion. Many people benefit from programs that are broken up into more “bite-size pieces,” allowing them to save up between sections/courses. Notably, education institutions that receive additional funding for successful student completion are able to count the same person multiple times when programs are broken up into smaller pieces. This opens the door for more funding opportunities.

Bachelor’s degree completions decrease despite that being the most in demand for new jobs

Talent is evenly distributed, opportunity is not

Despite being an epicenter for innovation and groundbreaking ideas, not all of San Diego’s residents have access to that innovation economy. Poverty disproportionately affects people of color, leading to barriers in educational attainment and the ability to compete for innovation jobs.

Additionally, shrinking high school class sizes mean that the portion of high school graduates going on to complete a post-secondary degree will need to increase for the region to meet its annual goal of 20,000 new skilled workers.

All of this is compounding to create a challenging hiring environment for employers. Even when the economy is facing higher levels of unemployment, the long-term trends around skill alignment and the need for more workers with a post-secondary education remains constant.

As mentioned before, one potential solution is for the region (and the country) to invest in more ways for learners to obtain industry-recognized degrees and credentials. Credit for prior learning or experience, dual-enrollment, and generally improved alignment across education systems become critical.

Innovation economy demographics are not reflective of regional demographics, or the workforce of tomorrow

Addressing the talent gap with strategic partnerships

During the May roundtable, a few partners were able to share how they are working to integrate the education and work journeys for participants.

  • Companies like Vertex Pharmaceuticals, in partnership with Junior Achievement of San Diego County, offer high school internship programs to support students in exploring the professional world and understanding their career aspirations before ever leaving the K-12 system.
  • The community college system is working with employers like GKN to build an apprenticeship hub the enables more earn-and-learn models without the headache that often comes with standing up a registered apprenticeship.
  • Organizations such as Family Health Centers of San Diego have been exploring loan forgiveness as a retention tool for staff, while ASML is investing in internal upskilling to support employee advancement and long-term workforce development.

Call to action

EDC cannot do this work alone. Progress on the 2030 Inclusive Growth goals is only achievable with and through the region’s employers scaling innovative and intentional solutions. If you want to be a part of the incredible group of organizations that are carrying the torch to 2030, EDC invites you to endorse the goals, use data tools like our talent dashboard and the progress reports to tell San Diego’s story, and share with us how you are driving progress toward an Inclusive San Diego.

Also: EDC and Junior Achievement are surveying businesses to understand the benefits of hosting interns. If your San Diego company has recently hosted an intern, please share your insight.

Taylor Dunne
Taylor Dunne

Director, Talent Initiatives

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A note from Mark: Summer in San Diego

By Mark Cafferty,

Another special San Diego summer

EDC investors, board members, and partners,

No matter what may be happening in the world around us, almost any day of the summer months in San Diego might lead you to believe that everything is perfect. And while we all know that perfection is largely unattainable, what is undeniable is that it (once again) feels like a very special summer in San Diego.

From the moment Pride flags are raised throughout our neighborhoods, and the San Diego Convention Center begins its heroic transformation into host, setting, and backdrop for Comic-Con International, the city’s streets truly come to life in July. Over the last 55 years, Comic-Con has grown to become a beloved international brand within the entertainment industry while remaining an anchor event for San Diego’s tourism engine. Meanwhile, San Diego’s Pride Parade/Week continues to attract more than 300,000 attendees and remains the largest annual civic event in the City of San Diego.

As August begins, we have seen San Diego nonprofit Curebound once again raise millions of dollars in its effort to “end cancer in our lifetimes” through its (growing) Curebound Cancer Challenge. Originally known as Padres Pedal the Cause, the event moved from its exciting venue at Petco Park to its new home on the scenic Torrey Pines Mesa. This past weekend, EDC team members joined tens of thousands of cyclists, walkers, and fundraisers as they made their way past the campuses of the very institutions responsible for the scientific research and breakthroughs that are keeping San Diego at the forefront of this global fight.

And whether the remainder of the summer sees you tuning in to the Padres pennant race, attending a concert with the San Diego Symphony at the Rady Shell, or enjoying time on San Diego’s 70+ miles of beaches and coastline, we hope that the warm days and nights ahead remain (near) perfect and special for you, your business, your friends, and your family.

We hope to see you soon at our:

  • Summer Bash on August 14 for a night of networking with more than 300 innovators, live music, delicious bites and drinks, and a short keynote from Kate Therapeutics’ Kevin Forrest, in conversation with LYZZ Capital’s Court Turner.
  • Inclusive Growth Roundtable on August 20 for a progress update on our region’s Quality Jobs Goal, and a roundtable discussion on equipping small businesses to compete.

With respect and admiration,
Mark

Mark Cafferty
Mark Cafferty

President & CEO

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A note from Eduardo: San Diego’s 2025 mid-year check-in

By Eduardo Velasquez,

At the top of each year, we try to look ahead to which trends are most worth tracking for the potential impact each can have on our local economy. We began 2025 watching AI and affordability, as well as whether massive investments from both corporations and the federal government would translate into job growth.

We also began 2025 flagging that there would be many wild cards in the year ahead that could knock us off course. As we enter the second half of the year, we want to pause to take stock of what has been a very tumultuous six months, with both immediate impacts and long-term implications.

Affordability and AI

The housing affordability picture looks mostly the same as it did in January: dire. Mortgage rates have bounced around a narrow range while staying above six percent, and the median home price remains just above $1 million, translating to a monthly mortgage payment of about $5,300. This means the annual household income needed to qualify for a conventional loan is more than $260,000, which roughly 12 percent of all households in the region can afford.

AI adoption remains one of the most profound questions in workforce development. San Diego has once again been identified as a ‘star hub’ for AI capacity and adoption, predominantly as a region with high rates of firm readiness and job exposure to generative AI. Tech giants continue to race for AI dominance, which has led to eye-watering compensation packages, record valuations for chipmakers, and $70 billion announced in new federal investments for data centers and power grid upgrades.

What the cut?

Speaking of federal funding, the impact of federal investments on local job growth is more immediate. That’s because all the money that the federal government lined up to invest in re-shoring manufacturing, capacity building for semiconductors, and sustainable energy projects in the last few years has been cut off, significantly scaled back, or temporarily tied up. Oh, and don’t forget state and local public funding cuts.

It is worth noting that much of this remains to be settled as the courts figure out what the Trump administration can legally defund. Yet, much of it is already impacting San Diego’s economy.

New jobs data shows that through the first half of 2025, the region lost 4,900 jobs. This is not as bad as the first six months of 2024 but still trending in the wrong direction. June’s unemployment rate jumped to 4.9 percent (from 4.0 percent in May) as the number of people unemployed rose 14,200—the largest month-over-month increase since the pandemic lockdowns of April 2020.

Private sector job losses are even deeper, down 8,400 year-to-date. Every major sector in San Diego has shed jobs through mid-2025, with the exceptions of Healthcare and Social Services, Leisure and Hospitality, and State and Local Government.

Way too many wild cards in this deck

The pace of new policy directives from D.C. has been overwhelming. The lack of clarity as to whether these policy proposals will be implemented, or are legally enforceable, has been paralyzing. Whether it’s consumers, homebuilders, or manufacturers, the sentiment remains weak.

In San Diego, it’s not just bad vibes. The impacts are real.

The newly-created Department of Government Efficiency (DOGE)’s contract cancellations have started chipping away at our federal workforce, including DoD which spent $20 billion here last year. Proposals to reduce indirect costs associated with federal research grants have led to hiring freezes and layoffs in higher education and could evaporate nearly $448 million from the regional economy. The proposed cuts to NIH and NSF funding would nearly cut in half the region’s $1.1 billion that fuels the research that has led to 99 percent of drugs approved a decade ago. Congress’ latest tax law is set to increase the population of uninsured patients by 1.7 million across California and is already manifesting in workforce reductions at local hospitals, which hasn’t yet showed up in the data.

The up and down tariff threats are the top concern of local businesses that sell in global markets. As one company executive put it, retaliation from countries like China has “completely changed the growth strategy.” These impacts are felt locally in jobs losses to industries like Transportation and Warehousing (down 10 percent, year-to-date) and Retail (down almost five percent). These impacts are also felt by $1 billion less in venture capital, $500 million less in export sales, and 770 fewer employers looking to hire than a year ago in San Diego.

“If you want to go far, go together.”

There are many famous quotes about navigating uncertainty and how resilience drives success. At EDC, we often quote an African proverb: “If you want to go fast, go alone. If you want to go far, go together.”

Collaboration has often defined success in this region; it’s what makes us different.

Whether the winds change and we need to adjust our sails, or whether we fall seven times but pick ourselves up eight, let’s do it together.

As I look into my crystal ball again, I see the next six months will continue to be riddled with uncertainty and unexpected challenges. I also still see a region that is a top three Life Sciences market, a top three market for startups, has the largest concentration of military assets in the world, and the busiest land port in the Western hemisphere. So, we have a lot to build on. As your business works to navigate changing rules, reach new markets, or find talent, don’t go it alone. EDC is here to help.

Onward and upward,

Eduardo Velasquez
Eduardo Velasquez

Vice President, Economic Development & Research

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