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Economic Drivers

March 22, 2019

Each month the California Employment Development Department (EDD) releases employment data for the prior month. This edition of San Diego's Economic Pulse covers February 2019. Check out EDC's research bureau for more data and stats about San Diego's economy. 

Thank you to Manpower San Diego for making this possible.

Highlights include:

·         The region’s unemployment rate was 3.5 percent in February, down from a revised 3.8 percent in January, and unchanged from the year-ago estimate of 3.5 percent.

·         San Diego’s unemployment rate remains below both the state rate of 4.4 percent and the national rate of 4.1 percent.

·         The labor force grew by 3,700 workers during the month and is now up 24,600 compared to a year ago.

·         Total nonfarm employment is up 9,700 in February and up 19,900 over the year.

·         The largest employment gain over the year occurred in educational and healthcare services, which added 6,900 jobs. 

March 14, 2019

In a world where Internet-enabled devices have become embedded in everyday objects, the need for cybersecurity has never been more vital. San Diego's roots in wireless technology, combined with its top tier engineering talent and military presence, make it a fertile ground for cybersecurity talent. And that's exactly what EDC's most recent economic impact study found.

cybersecurity economic impact numbers in SD

Commissioned by San Diego Cyber Center of Excellence, a San Diego-based nonprofit organization dedicated to accelerating the region’s cyber economy, the study found that San Diego had more than 150 core cyber firms that employ 4,920 people in the region. The Navy’s Space and Naval Warfare Systems Command (SPAWAR) provides an additional3,530 jobs to San Diego’s cybersecurity industry. In total, there are 8,450 direct jobs – up 11 percent from 2016 (faster than the regional employment growth of 3 percent). 

"Too often San Diego worries about falling behind Silicon Valley or the East Coast, but this study conveys we have the talent and workforce to punch above our weight," said Rear Admiral (Ret), Ken Slaght, CCOE chair and president of Cyber Center of Excellence. "San Diego's premier educational institutions, existing industry base and robust federal assets, seed not only the cyber workforce but the innovation needed to protect our nation."

The study was launched at Qualcomm on March 13, and featured a keynote from Dr. John Zangardi, CIO at the U.S. Department of Homeland Security, as well as an in-depth look at the interactive research tool, presented by EDC's Research Director Kirby Brady.

View the interactive tool here.

March 12, 2019

With many economists forecasting an economic downturn in the years ahead, small businesses are often the most vulnerable to a changing economy. However, a new survey released by Innovate78 – a collaboration among Carlsbad, Escondido, Oceanside, San Marcos and Vista – found that small businesses are feeling optimistic about the future. In fact, 85 percent of small businesses along the 78 Corridor project financial growth over the next two years, demonstrating stability in San Diego’s North County.

“Most small business owners are so busy running their companies, that they don't have time to step back and leverage the resources available to them,” said Michelle Geller, Economic Development Manager for the City of Escondido. “As part of Innovate78, we are taking a collaborative, data-driven approach to understand their business’ needs. Using the data from this study, we will be able to better collaborate with regional partners to ensure these businesses remain viable and a key economic engine in North County.”

The Small Business Ecosystem Along the 78 Corridor” surveyed 164 small businesses – firms with fewer than 100 employees – as a way to uncover insight and gain a deeper understanding of small business perceptions of the regional business climate.

According to EMSI, small businesses make up 98 percent of the 78 Corridor’s businesses – mirroring the broader San Diego region.

KEY FINDINGS:

  • Businesses are growing.  Over the next two years, 85 percent expect to grow in terms of financial performance.
  • Companies have a focus on local customers. In total, 69 percent said their customers were primarily in Southern California, whereas only 7 percent said their customers were primarily international.
  • Job growth will continue to be fueled by small businesses. Over the next two years, 45 percent of 78 Corridor small businesses project employment growth, while only 6 percent say they will have fewer employees.
  • Generating new sales is the biggest need for small business owners. A majority –88 percent – of small businesses said sales/new business was a challenge. As a way to generate sales, survey respondents identified ‘marketing’ as their highest future priority. 
  •  Connecting to resources is imperative. Small business identified needing assistance with financing, marketing and business development. However, many cited a lack of knowledge of available resource providers, like municipalities, economic development organizations, and chambers of commerce.

 “A quick glance at the data confirms that small businesses are a key driver for our economy. But when you dig a little deeper, you uncover trends that are key to understanding the 78 Corridor’s competitive advantage,” said Kirby Brady, director of research at EDC and the author of this study. “The study shows that small businesses along the 78 Corridor are both profitable and resilient.”

The study concluded that 73 percent of Innovate78 small businesses reported financial growth in the past two years, and 62 percent of businesses have been operating for more than five years, a metric often associated with resiliency. According to the Small Business Administration, nearly 50 percent of small businesses fail before the five-year mark. While not a direct comparison, this data suggests that small businesses along the 78 Corridor are outlasting U.S. small businesses.  

CHALLENGES AHEAD:

While Innovate78 businesses are faring well collectively, many challenges remain. With the 78 Corridor’s December 2018 unemployment rate at 3.2 percent, finding skilled talent is increasingly difficult – a trend many rapidly growing regions across the country are facing.

 “From hiring to finding new customers, I face many challenges on a day-to-day basis that I did not anticipate before starting my own business,” said Jiang Fan, president of Carlsbad-based American Lithium Energy. “While these are trials that many small business owners face, I believe that because of the 78 Corridor’s unique access to both San Diego and Orange County’s labor market, as well as the abundant resources the cities offer, that there’s never been a better time to own a small business on the 78 Corridor.”

If you are a business along the 78 Corridor and are looking to connect with available resources, please visit Innovate78’s resource page and/or contact your city’s economic development department directly.

Read the study here.

 

March 6, 2019

Mayor Kevin L. Faulconer, Apple Vice President Kristina Raspe and regional leaders announced today that the technology company will increase its employment in San Diego by an additional 20 percent over previously announced numbers.

Apple now plans to add 1,200 employees in San Diego within the next three years, with almost 200 of those employees in place by the end of the year. As part of a nationwide expansion, Apple announced in December that it would establish a new site and job opportunities in San Diego.

“Apple has been a part of San Diego for nearly 20 years through our retail presence and small, fast-growing teams – and with this new investment we are proud to play an even greater part in the city’s future,” said Tim Cook, Apple CEO. “You don’t have to try too hard to convince people that San Diego is a great place to live, work and do business, and we’re confident our employees will have a great home among the community there.”

Apple cited San Diego’s successful efforts to diversify its economy, incubate new industries, broaden its talent pool, build partnerships between academia and the business community, and maintain a superb quality of life as reasons for its expansion to America’s Finest City.

“There isn’t a city in the U.S. that can offer the talent, infrastructure and community that San Diego can,” said Mayor Faulconer. “I invited Apple to increase its growth in San Diego, and on behalf of a grateful city we’re delighted they accepted our invitation. Apple’s inventions have literally changed the world, revolutionizing how we communicate, create, do business and learn. As Apple continues to innovate and introduce new products, we will be proud to say that San Diego is a part of it.”

Apple and Mayor Faulconer met over recent weeks to discuss the company’s growth plans.

“We were excited to announce in December that we planned to grow our presence here and add one thousand jobs, and then Mayor Faulconer and members of his team very thoughtfully and convincingly walked us through everything the San Diego region has to offer,” said Kristina Raspe, Apple Vice President of Global Real Estate and Facilities. “So we went back and sharpened our pencils and increased our investment.”

San Diego will become a principle engineering hub for Apple with new positions distributed across a number of specialty engineering fields, to include both hardware and software technologies. While Apple hasn’t yet settled on a location, plans are also underway to develop a campus that will feature hundreds of thousands of square feet of office, lab and research space. 

"Apple - with its vision, its brand and its products - could make a home anywhere across the globe,” said San Diego Regional Economic Development Corporation Chair Janice Brown. “By selecting San Diego, they are showing that they value a place that prioritizes a rich talent pool, inclusive economy, and commitment to changing the world for the better."

In addition to its corporate and retail presence, Apple’s app ecosystem contributes to the San Diego economy. App developers who call San Diego home create products that reach customers around the world.

“Apple’s decision to increase the company’s presence in San Diego is a testament to the strong, talented workforce and intellectual capital we have in the region,” said Jerry Sanders, President and CEO of the San Diego Regional Chamber of Commerce. “We look forward to the opportunities this investment brings for our entire region and the role San Diego will play in the future of Apple.”

Apple Fashion Valley, opened in 2001, was the company’s 21st store in the world. Apple currently employs 600 retail employees at its five stores in the region.

The company’s local teams over the years have helped support a number of organizations in San Diego, including the Jacobs & Cushman San Diego Food Bank, Make-A-Wish San Diego, San Diego Humane Society, American Cancer Society, Zoological Society of San Diego, Cards for Kidz NFP, Braille Institute San Diego Center, and Challenged Athletes Foundation. 

 

TAGS
February 25, 2019

This blog post originally appeared on Innovate78's blog. Managed by EDC, Innovate78 is the collaborative outcome of five cities - Carlsbad, Escondido, Oceanside, San Marcos and Vista - coming together with a shared vision to boost economic prosperity along the 78 Corridor. 

A map of the region’s unique coworking spaces. (Courtesy of: Snazzy Maps and Rising Tide Partners) In addition to being home to many innovative companies, the 78 Corridor also houses a number of coworking spaces that contribute to the success of the local startup scene as well as the entire community. 

In addition to coworking spaces, another resource available to the region is Startup78, which is an initiative of Innovate78 and San Diego Regional EDC to unite and amplify the resources available to entrepreneurs along the 78 Corridor with the goal of helping startups scale to become long-term, viable businesses that support our economy.

All five Innovate78 cities (Carlsbad, Escondido, Oceanside, San Marcos, and Vista) are home to a number of coworking spaces that each boast unique offerings and amenities. Many people come to work in these spaces for the networking opportunities and oftentimes, find their other co-founder while working on separate projects. Professionals have many different spaces to choose from along the corridor, allowing them to work close to home and contribute to the local economy.

Read the full blog post on Innovate78.com to learn about each of the five cities' co-working offerings.

 

 

TAGS
January 22, 2019

Small businesses are the backbone of the San Diego economy, representing 98 percent of local businesses and employing roughly 59 percent of the workforce. According to a new study by San Diego Regional EDC, in partnership with the San Diego & Imperial Small Business Development Center, small businesses are one of the primary drivers of local economic growth, with 41 percent of the region’s small businesses intending to hire more employees in the next two years.

Based on a survey of more than 500 respondents, “An In-Depth Look at San Diego's Small Business Ecosystem” uncovers insight about the region’s small businesses – those with fewer than 100 employees – and quantifies the number of firms, workforce, demographic and industry breakdown, business outlook and more across San Diego and Imperial counties.

The study found 36 percent of small businesses are women-owned, 20 percent are minority-owned, and 10 percent are veteran-owned.

 “This study helps reinforce what we already know: San Diego’s small businesses are the cornerstone of our economy, employing nearly 700,000 San Diegans and driving innovation across the world,” said Kirby Brady, Research Director, San Diego Regional EDC.

Encompassing industries from healthcare, finance, food and beverage, education, construction and real estate, San Diego’s small businesses are driving the local economy – representing two-thirds of current regional employment.

KEY FINDINGS

  • Small businesses employ 697,000 workers, making up 59 percent of San Diego’s total workforce. 
  • 27 percent of the region’s workers are in businesses with fewer than 20 employees; while more than 64 percent of firms employ fewer than five people.
  • 69 percent of small businesses reported financial growth in the past two years.
  • 59 percent of the region’s small businesses have local customers.
  • Of firms surveyed, roughly 43 percent expect to grow in terms of workforce and 81 percent expect to grow in terms of financial performance.
  • The majority of companies who have been operating less than two years generate less than $100K in annual revenue, while more than half of established companies (10 years or longer) generate more than $1M in revenue annually.
  • Small business growth challenges:
    • Eighty-five percent of locally-serving small business said ‘sales and new business’ is a challenge, including 25 percent who said it is the most significant challenge.
    • Fourteen percent of small businesses said that ‘financial stability and cash flow’ is the most significant challenge.

“In order to better serve the needs of our small businesses and entrepreneurs, it’s important that we understand their perceptions and experiences," said Danny Fitzgerald, Associate Regional Director of San Diego & Imperial SBDC Network. “This study will enable us to create new and enhance existing programming to support small business growth across the region.”

Furthermore, with a commitment to lifting up San Diego small businesses, EDC has launched an Inclusive Growth initiative in order to develop measurable targets and actionable recommendations to promote small business growth, talent development and affordability.

The SBDC has become our trusted 'go to' resource for just about everything. They have connected us to the vast networks in San Diego that has brought us new customers and important industry connections. We wouldn't be where we are today without them,” said Nic Halverson, Founder/CEO of Waitz App.

The report was produced by San Diego Regional EDC, with support from the San Diego & Imperial Small Business Development Center. Read the full study here.

For more research from San Diego Regional EDC, visit sandiegobusiness.org/research-center.

 

January 18, 2019

Each month the California Employment Development Department (EDD) releases employment data for the prior month. This edition of San Diego's Economic Pulse covers December 2018. Check out EDC's research bureau for more data and stats about San Diego's economy. 

Highlights include:

  • The region’s unemployment rate was 3.2 percent in December, unchanged from a revised 3.2 percent in November, and below the year-ago estimate of 3.3 percent.
  • San Diego’s unemployment rate remains below both the state rate of 4.1 percent and the national rate of 3.7 percent.
  • The labor force shrunk by 3,000 workers during the month and is now up 37,100 compared to a year ago.
  • Total nonfarm employment is down 900 in December and up 28,400 over the year.
  • The largest employment gain over the year occurred in professional and business services, which added 12,600 jobs. Professional, scientific, and technical services were responsible for 46 percent of the increase – up 5,800 jobs.

 

San Diego's Economic Pulse - January 2019 from San Diego Regional EDC on Vimeo.

January 7, 2019
This op-ed was originally published in the San Diego Union-Tribune, authored by Nikia Clarke, Cynthia Curiel, and Patricia Prado-Olmos.
 
As high school seniors throughout the country complete final exams and eagerly await college acceptance letters, only 37 percent of Hispanic and black students in San Diego will be college-ready when they finish high school. This lack of preparedness significantly affects San Diego’s competitiveness since these groups already represent a large (and growing) part of our population. And while talent attraction efforts are an important facet of economic growth, the nationwide competition for skilled talent combined with San Diego’s high cost of living make relocating talent from elsewhere increasingly difficult. Now more than ever, San Diego employers must focus on building a strong local talent pipeline, or we — as a region — simply won’t survive.
 
The success of San Diego’s innovation economy is inextricably linked to the region’s talent pool. In fact, projections indicate that San Diego will need to double its annual production of high-skilled college graduates by the year 2030 in order to meet the demands of the future economy, ultimately developing interventions that impact today’s seventh-graders. Though this can only happen through extensive systemic changes, we can rest assured knowing that we don’t have to look far to access a viable workforce. San Diego doesn’t have a talent supply problem; it has a talent development problem.
 
San Diego is home to a large pool of untapped talent that is vastly underrepresented in the innovation economy. Hispanics represent San Diego’s fastest growing population and will become the region’s largest demographic group by 2030; yet 85 percent of Hispanics in the region do not hold a bachelor’s degree. This presents an opportunity for employers to develop this local talent and create sustainable inflows of new employees directly from their surrounding communities.
 
To address these regional challenges, the San Diego Regional Economic Development Corp. (EDC) launched an Inclusive Growth initiative this year, and convened an employer-led steering committee to help develop and drive an agenda that maximizes economic growth through inclusion. Informing this work, EDC recently released an interactive web study — talent.inclusivesd.org — indicating that talent shortages pose a significant threat to San Diego’s economic sustainability.
 
The 40-company steering committee is encouraging other employers to focus efforts on talent development programs that directly equip the local workforce with the skills they seek in employees. The committee has endorsed “20,000 skilled workers by 2030” as a regional goal, along with a set of employer-focused recommendations around transparency, engagement and investment. These recommendations serve to build a platform in which people can track the region’s progress, as well as provide employers with programs they can adopt and implement at their own organizations.
 
As a key leader in EDC’s Inclusive Growth Steering Committee, defense technology company Northrop Grumman plans to pilot a talent pipeline program in 2019 that will link STEM education opportunities from K-12 through college. The company is creating a new pathway for high school students to obtain STEM-focused degrees through close collaboration with local community colleges and practical on-the-job experience. By helping reduce the barriers many face when considering college, Northrop seeks to empower students and their families to pursue both educational and career opportunities, while creating a sustainable source of high-skilled talent.
 
Cal State San Marcos, another steering committee leader, has collaborated with Northrop Grumman to ensure that local education systems and curriculum are equipping students with the skills required to fill these higher-paying jobs. Cal State San Marcos works closely with a range of industries to design academic programs connected to workforce needs, such as a master’s of science in cybersecurity and the university’s newly launched engineering program.
 
Inclusive growth is not just about “doing the right thing” — it’s about economics, and making sure our community is set up for success. In 2019, EDC will continue to work with its steering committee to develop employer-focused recommendations around two other inclusive growth goals: equipping small businesses to compete and addressing the affordability crisis.
 
This process is complex and will take time; San Diego’s continued growth and success will largely depend on collaboration among companies, universities, philanthropic organizations and local government to ensure that inclusive growth practices are integrated into future decision-making. As a region, and especially as an economic development organization, if we are not doing this right, we should not be doing anything at all. Our hope is that when we tell San Diego’s story in the not-too-distant future, we can tell the story of a region that not only excels in technology and innovation, but also one that includes and uplifts all of its residents — a place where everyone can thrive, no matter your ZIP code.
 
Clarke is vice president of economic development at San Diego Regional Economic Development Corp. Curiel is vice president of communications at Northrop Grumman Corp., Aerospace Systems. Prado-Olmos is vice president of community engagement at Cal State San Marcos.
 
Follow along and learn more at InclusiveSD.org.
December 17, 2018

At the end of each year, we like to look back on all the good this year brought with it. And with San Diego as our home, there's much to be thankful for - from an influx of startup growth, to top rankings and thriving educational systems. Read on below to see the top themes we saw come out of 2018.

From Team EDC, thank you for being part of our #SDlifechanging story.

Not a HQ town, but now we have these....
Qualcomm aside, San Diego is not often thought of as a headquarter town; but that doesn't mean large companies don't see value in setting up operations in the region. This year, we saw these tech heavyweights plant roots in San Diego:

  • Data analytics company Teradata relocated its headquarters to San Diego from Dayton, Ohio
  • Amazon to hire up to 350 at its new UTC campus
  • Walmart Labs opened 30,000 sqft in Carlsbad; to double tech workforce
  • WrikeCloudbeds, and Vertex Pharmaceuticals made significant investments in local expansions
  • And most recently, Apple announced it will be expanding to San Diego, supporting up to 1,000 jobs

SD leads charge in the healthcare revolution
Home to more than 1,200 life sciences companies and more than 80 research institutes, the San Diego region is on the brink of scientific breakthrough each and every day. This year, we saw Rady Children's Institute for Genomic Medicine and Illumina set the Guinness world record for fastest genetic diagnoses in newborns; Scripps Translational Science Institute was awarded a $34+ million grant for its work in digital health; Salk scientist Janelle Ayres received $1 million to fund her microbial research; Sanford Burnham Prebys Medical Discovery Institute identified never-before-seen DNA recombination in the brain linked to Alzheimer's disease; local biotechs PfenexSynthorx, and Trovagene went public; Illumina acquired Edico Genome and Pacific Biosciences in separate deals worth more than $2.2 billion; LunaDNA launched the first-of-its-kind platform that offers stock for DNA data; and much more #SDlifechanging work.

SD selected as national UAS testing center
With a continued commitment to growing San Diego’s reputation as a hub for innovation, the City of San Diego, City of Chula Vista, and EDC announced that San Diego has been selected to participate in a new program by the U.S. Department of Transportation to advance the testing of unmanned aircraft technology, grow the innovation economy, and create jobs. As part of the program, the Chula Vista Police Department has begun to deploy drones for public safety operations. Read more.

Local colleges expand, bolster talent pipeline
San Diego's educational institutions produce a top-tier talent pipeline for employers both here and abroad. And now more than ever, San Diego State University, UC San Diego, San Diego Community College District, and others are expanding programs and campuses to promote inclusion and support industry needs. This year's successes include:

  • CSU San Marcos announced the creation of its bachelor of science in computer engineering thanks to more than $1.5 million in donations from local companies and their employees
  • Mira Costa and Palomar colleges to waive tuition for all first-time, full-time students as part of California College Promise program
  • Philanthropist Denny Sanford made a landmark, $100 million gift to the National University System to expand its social emotional learning program
  • Southwestern College was awarded $325,000 in grants to fund services for veteran and undocumented students
  • San Diego City College expanded its cybersecurity program to include associate and certificate opportunities
  • With its first female president Adela de la Torre at the helm, San Diego State University is set to launch a new Big Data Analytics graduate program
  • UC San Diego received a record $75 million from computer science alum Taner Halicioğlu to grow its new data science institute

SD companies rake in big bucks for growth
Throughout 2018, San Diego saw more than 80 venture capital deals. While the number of deals is down from last year, the cash totals are record-breaking in more ways than one. San Diego companies raised more $1.8 billion (as of Q3), with the vast majority – $1.5 billion – going to healthcare companies. The region is on pace to have its best year for VC since 2000. Top deals include SamumedIdeaya Biosciences, Gossamer BioGrailHelix, and dozens more.

SD impact felt 'round the world'
A globally connected region is a more successful region, which is why its crucial that San Diego innovation is seen and felt across the world. This year, we saw this locally-made technology make impacts in key international markets:

  • Cubic Transportation Systems secured contracts to provide its mass-transit ticketing services to Queensland and Sydney, Australia, as well as other international cities
  • Inc. 5000 company Scientist.com announced its expansion into Japan as part of a WTC-led trade mission
  • Forge Therapeutics is set to double its local footprint due in part to an international deal signed during a WTC-led trade mission to the UK
  • General Atomics Aeronautical Systems secured an $81 million contract from the U.S. Air Force Life Cycle Management Center for the UK
  • Carlsbad-based Viasat added AeromexicoFinnair, and EL AL Israel Airline to the list of international airlines it supplies with inflight Wi-Fi
  • San Marcos-based Ocean Reef Group donated its full-face dive masks used to rescue a youth soccer team trapped in a flooded cave in Thailand

SD tops the charts
San Diego held its own in many of this year's top rankings. From the region's entrepreneurial culture to its commitment to sustainability and innovation, top-tier publications and organizations took notice of San Diego. Rankings include: 

 

December 13, 2018

Apple has announced it will be planting roots in San Diego, solidifying what we already knew about our region: San Diego is an innovative tech hub, home to some of the best and brightest talent in the world. While we're not a headquarters town, we continue to see an influx of local expansions from some of the world's largest companies. San Diego Regional EDC's official statement below:

“Joining an influx of other large tech firms like Amazon, Google and Teradata, Apple is setting up a significant operation in San Diego to take advantage of the region’s STEM talent. We look forward to building a stronger working relationship with Apple to help them grow and succeed in this already thriving tech hub.” Mark Cafferty, president & CEO, San Diego Regional EDC