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The Big Picture San Diego Blog


Economic Drivers

September 4, 2019

This op-ed was originally published in Times of San Diego, authored by Kim Becker, Jane Finley, and Chris Nayve.

More big business executives are shifting their corporate policies to include the needs of every stakeholder—not just the company’s shareholders, but all of its stakeholders, including employees, suppliers, customers, and community. The importance of this issue was magnified by a recent statement from the Business Roundtable, an association of CEOs from America’s leading companies. In today’s world of widening economic disparities and rapid digital automation, it is critical now, more than ever, for large companies to go beyond checking the boxes of corporate social responsibility and actually create solutions for inclusive economic growth, which means prioritizing the success of small businesses in their community.

In San Diego, where small businesses make up 98 percent of firms, large corporations can play a crucial role in growing the economy—through supporting small businesses, especially those in “opportunity industries.” While the region’s highest-paying jobs come from innovation industries, a new study by San Diego Regional EDC indicates that opportunity industries offer alternative pathways to prosperity. These industries—such as construction, manufacturing, and logistics—provide good pay, benefits, and sustainable career paths, through quality jobs that do not require a bachelor’s degree. The problem is that workers cannot get jobs where none exist.

To address these challenges, EDC launched an employer-led Inclusive Growth Steering Committee to drive an agenda that maximizes economic growth through inclusion. Guided by the findings of EDC’s latest study, the steering committee recently endorsed a regional goal to “create 50,000 new quality jobs in small businesses by 2030.” This includes supporting small firms in opportunity industries, which have a higher concentration of quality jobs accessible without a bachelor’s degree.

The steering committee also developed a set of actionable recommendations for how large employers can support local small businesses, through their procurement decisions and direct investment in small business support programs. These actions help small businesses increase revenue and, as a result, create more quality jobs.

According to a recent survey, the most difficult challenge faced by small businesses is attracting new customers. Though many large firms in San Diego procure goods and services from opportunity industries, local small businesses struggle to compete for their attention and often lose out to larger suppliers from outside the region. By establishing a more concerted effort to procure from local businesses, San Diego’s large companies could fuel local job growth without sacrificing quality of work.

No one understands the value of strong local supply chains better than San Diego’s anchor institutions. As locally-serving organizations deeply rooted in their community, anchor institutions have a vested interest in helping small businesses succeed. The University of San Diego understands the transformative impact an anchor institution can make by simply expanding partnerships with local service providers. The university’s director of procurement has set spending targets specifically for small and minority-owned businesses and hosts quarterly supplier diversity workshops. The university takes responsibility for strengthening the local small business ecosystem, so that more students can thrive in San Diego after graduation.

As an advocate for community health, Kaiser Permanente recognizes that economic opportunity and stability are essential to maintaining healthy residents. Kaiser Permanente recently funded a tuition-free training program for small business owners to help build capacity for sustainable growth. During its first year in San Diego, the program helped 55 small businesses grow revenues and create new jobs.

Through its Small Business Development program, the San Diego County Regional Airport Authority ensures that small and disadvantaged businesses have the opportunity to work with the airport. Over the past decade, the airport authority has contributed $250 million to the regional economy in construction contracts with small businesses alone, and has benefited by increasing competition in the procurement process and gaining access to external talent. By demonstrating the value from these partnerships, anchor institutions, like the airport authority, can provide examples of effective procurement strategies that other large companies can adopt to benefit themselves and the region as a whole.

Like CEOs of the Business Roundtable, our region’s anchor institutions and large employers have an opportunity to play a central role in creating a better, more inclusive San Diego. By directly investing in local small businesses through procurement and support programs, large firms can help sustain these smaller companies and maximize regional economic growth, while still maintaining their bottom line. It’s time that San Diego’s largest entities work together to restore our corporate ecosystem and, ultimately, provide more San Diegans with access to quality jobs.

Kim Becker is the president and CEO of San Diego County Regional Airport Authority. Jane Finley is the senior vice president and area manager for all Kaiser Permanente facilities in San Diego. Chris Nayve is the associate vice president for community engagement at the Karen & Tom Mulvaney Center of the University of San Diego. These organizations are all members of San Diego Regional EDC’s Inclusive Growth Steering Committee.

 

 

August 16, 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 July 2019. Check out EDC's research bureau for more data and stats about San Diego's economy.

This report is sponsored by Manpower San Diego.
 

Highlights include:

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

  • The region’s unemployment rate was 3.6 percent in July, up from a revised 3.3 percent in June 2019, and unchanged compared with the year-ago estimate of 3.6 percent.
  • The region’s unemployment rate remains lower than both the state and national unemployment rates of 4.4 percent and 4.0 percent, respectively
  • Leisure and hospitality (up 2,600) added the largest number of jobs over the month, driven in part due to the influx in tourism in the summer months
  • Between July 2018 and July 2019, total nonfarm employment increased from 1,480,300 to 1,510,000, adding 29,700 jobs.
  • Government (up 9,100) followed by professional & business services(up 8,400) led job growth during the past year

 

 

 

 

July 19, 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 June 2019. Check out EDC's research bureau for more data and stats about San Diego's economy. 

This report is sponsored by Manpower San Diego.

Highlights include:

San Diego's Economic Pulse: July 2019 from San Diego Regional EDC on Vimeo.

  • The region’s unemployment rate was 3.3 percent in June, up from a revised 2.7 percent in May 2019, and below the year-ago estimate of 3.6 percent
  • The region’s unemployment rate remains lower than both the state and national unemployment rates of 4.1 percent and 3.8 percent, respectively
  • Between May 2019 and June 2019, total nonfarm employment increased from 1,510,200 to 1,517,300, adding 7,100 jobs
  • Between June 2018 and June 2019, total nonfarm employment increased from 1,491,600 to 1,517,600, adding 25,700 jobs
  • Between June 2018 and June 2019, professional and business services led the year-over gain, adding 8,000 jobs and mostly driven by growth in professional, scientific, and technical services (up 7,100).

 

July 19, 2019

If you've ever hopped on the tube in London or swiped your MTA card to take the L from Brooklyn into Manhattan, you have San Diego innovation to thank for it. Cubic's Transportation division is helping move millions of people throughout the world's most dynamic cities, including Sydney, London, New York, and more. Though Cubic is a global company, it is headquartered right here, in San Diego.

This week, the company reaffirmed its commitment to San Diego by breaking ground on a new campus. The two 125,000 square-foot, three-story buildings, developed in partnership with Cisterra Development, will bring its San Diego-based workforce together onto one centralized location in Kearny Mesa.

A long history in San Diego

In 1951, Walter J. Zable opened a small electronics company operating out of a modest storefront. Today, Cubic has 6,000 employees globally and three primary business units that do everything from increase mass transit efficiencies to train and protect our armed forces. Along the way, the company has developed a lot of "firsts"; from the world's first electronic scoreboard for a stadium to the first wholly contactless fare system in the U.S., meaning you can swipe a card (and in some cities, a smartphone) instead of scrounging for change to buy a bus ticket.

Since the beginning, San Diego has been a crucial part of Cubic's story. As the company began to win new contracts and bring innovations to market, it added new employees to keep up with the demands. However, these employees were spread throughout a few buildings in San Diego.

One Cubic headquarters

Cubic's new home base seeks to change that.

"Our culture is driven by One Cubic, which emphasizes collaboration across our businesses to share ideas, strategies, and expertise. We are thrilled our new campus will bring together our San Diego employees onto one centralized location where we can continue to achieve excellence through teamwork,” said Bradley H. Feldmann, Chairman, President, and Chief Executive Officer, Cubic Corporation. If you're looking for jobs in San Diego, you might want to visit Cubic's career site.

This isn't Cisterra Development's first time working on a project of this magnitude. In San Diego and beyond, the developer has made a name for itself for creating cutting-edge space for San Diego strongholds including Sempra Energy (and it's downtown headquarters) as well as  Diamond View Tower, which houses numerous San Diego startups.

The new campus will also contain new landscaped common areas for employees, including a basketball court and open lawn, as well as a new café and fitness center.

With assistance from EDC, Cubic secured a CalCompetes Tax Credit worth $8.5 million. Locally, Cubic was also able to secure expedited processes through the City of San Diego, in addition to a Business Incentive Program and Business Cooperation Program award. In total, the incentives and expedited processes provided gave Cubic the necessary offsets and timeline confidence to commit to redeveloping its Kearny Mesa headquarters, and keeping San Diego as its home for decades to follow.

And not to be overlooked, Cubic's new campus will also provide access to one of San Diego's overlooked neighborhoods - Kearny Mesa. As Councilmember Chris Cate, who represents the city of San Diego's 6th district, said, "Kearny Mesa is going to be the hottest neighborhood in San Diego."

And we can thank Cubic for being (one of) the impetuses of this. The new campus is expected to be online by December 2020.

 

July 9, 2019

The Integrated Pilot Program (IPP) reached a large benchmark on the food delivery mission, which included a successful test flight with Uber Eats on San Diego State University campus. Starting this summer, Uber will be using specially crafted drones developed by its flight arm, Uber Elevate, to grow the company's food delivery program. Giving way for Uber Eats to operate in the region's airspace, San Diego Office of Homeland Security has been integral in this initiative with coordination from EDC, in order to obtain the necessary waivers and certifications from the Federal Aviation Administration (FAA) through the IPP. Read more about this program here

The IPP is rapidly moving forward on the first-ever international Unamnned Aircraft Systems (UAS) flight, which is made possible in coordination with EDC's partners at CAPE Aerial Telepresence and the City of Tijuana. The project has also been working diligently with Matternet, the medical delivery operators, to determine the route for the first blood sample test delivery.

Next up: EDC, in partnership with Booz Allen Hamilton, is planning the process for a drone conference, which is slated to take place in February 2020. The themes include San Diego as a center of excellence in the emerging technologies industry, inclusivity, and deep dives into the unique challenges of UAS integration. A planning committee is being formed, involving possible participation from local government partners, local industry leaders, nonprofit stakeholders, and higher education institutions. Expect more details on the conference coming soon. 

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July 9, 2019

Serving the defense and transportation industries, Cubic Corporation is a global company with clients on nearly every continent. The company has called Kearny Mesa home for 50 years, currently based in an aging set of buildings that have not kept pace with the company's. Its facilities were divided onto two major campuses in the Kearny Mesa area, creating a lack of cohesion among its business units.

With competition for tech talent at an all-time high, Cubic’s leadership was concerned its outdated facilities would discourage potential hires. Cubic needed to modernize and redevelop its campus to help attract talent, while also providing adequate facilities for the next 50 years. Despite its long history as a San Diego company, Cubic was experiencing pressure to build its headquarters in a lower-cost state such Tennessee, Alabama, orFlorida, where Cubic had other growing operations. As a result, EDC worked hand-in-hand with Cubic’s team to secure the necessary incentives to keep San Diego a competitive option, despite pressure to relocate its facilities out-of-state.

Utilizing both state and local programs, EDC was able to leverage its expertise in incentives consulting in order to help this 50-year-old staple company stay in California. EDC developed a strategy to capture a number of incentive programs, which offset the cost of rebuilding its headquarters in San Diego. Additionally, EDC worked as an intermediary to both the City and State departments on behalf of cubic to ensure processes were staying on track and that the campus redevelopment was seen as a priority by all parties.

Cubic secured a CalCompetes Tax Credit worth $8.5 million. Locally, Cubic was able to secure expedited processes through the City of San Diego, in addition to a Business Incentive Program and Business Cooperation Program award. In total, the incentives and expedited processes provided gave Cubic the necessary offsets and timeline confidence to commit to redeveloping its Kearny Mesa headquarters, and keeping San Diego as its home for decades to follow.

ABOUT CUBIC CORPORATION: Cubic is an American public corporation providing diversified systems and services to the transportation and defense markets worldwide. Cubic Corporation is the parent company of three major divisions: Cubic Transportation Systems, Cubic Mission Solutions and Cubic Global Defense. cubic.com

 

July 9, 2019

Real Dog Box, a small startup that manufactures dog treats, was reaching capacity at its current location, and risked closing if they did not find a new warehouse by June 2019. Real Dog Box reached out to EDC asking for assistance in finding a new site under one roof that could accommodate the manufacturing company's joint operation for light industrial manufacturing and a commercial business.

EDC leveraged its connections and reached out to the City of San Diego’s Economic Development Department for more information and assistance on the specific zoning regulations that the company could use to locate a new site. Using a property selection database, EDC provided a list of potential locations that met Real Dog Box’s requirements for property characteristics and complied with the City’s industrial and commercial zoning regulations.

In May 2019, Real Dog Box was able to re-locate to a new 13,000 sq. ft. site in Barrio Logan within the City of San Diego’s Promise Zone. Thanks to its expansion efforts, Real Dog Box hired three new employees within the first few weeks of moving. In addition to providing a list of potential properties, EDC created a list business resources related to incentive support for the City of San Diego's Storefront Improvement Program, Business Incentive Program and Business Cooperation Program. EDC also provided additional information on San Diego Workforce Partnership’s programs for On-The-Job-Training, Customized Training and made introductions to CDC Small Business Financing.

“We were in a real pinch to find a new location for our manufacturing facility. EDC helped narrow down our search for properties that fit our needs and their contacts at the city's zoning office saved us A LOT of time. In our initial meeting with EDC, the team was able to recommend quite a few incentives offered by the city and state specific to our business model and needs that I had never heard of. I wish I'd known sooner what a great resource they are.” -Ruby Alexis Balaram, Founder and COO, Real Dog Box

ABOUT REAL DOG BOX: Real Dog Box was a small startup launched in 2016 transforming the way people feed their dogs. Real Dog Box offers a monthly box of nutritiously diverse dog treats and chews shipped across the U.S. real.dog

 

 

June 25, 2019

Department of Homeland Security Chief Information Officer Tours San Diego Tech Companies
Tour demonstrated San Diego’s thriving innovation economy and collaborative focus on increasing cybersecurity throughout the region

SAN DIEGO – June 25, 2019 – US Department of Homeland Security (DHS) information technology and cybersecurity leadership – including more than 30 senior federal personnel from government and military – are touring six tech companies located in San Diego on June 24 – 25, 2019.

With support from San Diego’s Cyber Center of Excellence (CCOE) and San Diego Regional Economic Development Corporation (EDC), the tech tours allow participants to witness how San Diego and the surrounding region continues to evolve as a technology and cyber hub within the United States.  

While many San Diego companies were considered for this visit, CCOE and EDC tapped six companies to highlight a cross section of new technologies in the region to include Qualcomm, Redhorse, Shield AI, Teradata, Analytic Ventures and Walmart Labs. The collective group will demonstrate everything from artificial intelligence and machine learning to 5G, data analytics and cybersecurity.

Dr. John Zangardi, the DHS Chief Information Officer (CIO),  whose office is jointly leading this outreach trip with the DHS Science and Technology (S&T) Directorate, “sees industry engagement as vital to ensuring the DHS mission takes full advantage of the best industry has to offer.  There are exciting advancements in 5G, IOT, ML/AI and cyber that we want to learn more about.  And I want to ensure that industry understands the DHS mission challenges.”

“The Science and Technology Directorate seeks opportunities to make connections, share ideas, and discuss best practices and new capabilities with cybersecurity professionals from across government, industry, academia and the international community,” notes William N. Bryan, DHS Senior Official Performing the Duties of the Under Secretary for Science and Technology. “Through this series of tours, we hope to learn from companies that are advancing their capabilities in cybersecurity to better inform our efforts to build a secure and resilient cyber backbone for the nation and address the complex threats of our future.”  

Rear Adm. (ret) Ken Slaght, CCOE chair and president, emphasized that visits like this provide new perspective on cybersecurity and cyber readiness.

“We’re excited that San Diego is being recognized by national IT leaders,” said Slaght. “For Dr. Zangardi, Mr. Bryan, and other high-ranking federal IT leadership to take an interest in what San Diego continues to do to support innovation and technology development means a great deal. San Diego plays a significant role in cyber preparedness for the nation and will continue strengthening these efforts well into the future.”

The DHS CIO and S&T tour highlights the importance of collaboration between the public, private, academic, government and military sectors to foster greater cybersecurity, and is a component of CCOE and the City of San Diego’s Secure San Diego initiative, which fosters region-wide efforts to create a more secure cyber environment and position San Diego as a global hub of cybersecurity innovation. 

 

About Cyber Center of Excellence

San Diego Cyber Center of Excellence (CCOE) is a non-profit that focuses on regional planning and program implementation in order to address cybersecurity workforce, economic development and infrastructure challenges and opportunities through collaboration with industry, academia and government agencies. CCOE supports the growth of the cyber industry, promotes cybersecurity in San Diego and provides a template to mobilize other regions. Learn more at www.sdccoe.org.

June 21, 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 May 2019. Check out EDC's research bureau for more data and stats about San Diego's economy. 

This report is sponsored by Manpower San Diego.

Highlights include:

  • The region’s unemployment rate was 2.8 percent in May, down from a revised 3.0 percent in April 2019, and unchanged from the year-ago estimate of 2.8 percent
  • The region’s unemployment rate remains lower than both the state and national unemployment rates of 3.5 percent and 3.4 percent, respectively
  • Between April 2019 and May 2019, total nonfarm employment increased from 1,501,600 to 1,510,600, adding 9,000 jobs
  • Between May 2018 and May 2019, total nonfarm employment increased from 1,485,000 to 1,510,600, adding 25,600 jobs
  • Between May 2018 and May 2019, education and health services led the year-over gain, adding 8,700 jobs

 

June 5, 2019

Today, San Diego Regional EDC and its employer-led Inclusive Growth Steering Committee officially endorsed a regional goal to create 50,000 new quality jobs within small businesses by 2030. Driven by EDC’s latest study release, Equipping Small Businesses to Compete, the regional goal and accompanying set of employer recommendations aim to help small businesses in San Diego to compete.

 “If you care about the future of San Diego—economic competitiveness and mobility—then you need to pay attention to small businesses,” said Janice Brown, board chair, San Diego Regional EDC. “From large employers to elected officials, it’s everyone’s responsibility to make sure that small businesses have the tools to succeed.”

In its new study, EDC found that while small businesses—those with fewer than 100 employees—employ the majority of San Diego’s workforce, only 26 percent of jobs in small businesses are quality jobs—those that pay enough for economic security (paying wages of at least $40,529 per year or $19.49 per hour).

Additional key findings include:

  • Due to financial challenges, small businesses pay 14 percent lower average wages.
  • Only 36 percent of all businesses are minority-owned, and about the same proportion are woman-owned.
  • Opportunity industries, such as construction and transportation, offer a greater number of quality jobs than many innovation industries, including precision health and cybersecurity. Additionally, many opportunity industry jobs can be accessed without a bachelor’s degree.

Citing these key findings, it’s important for the region to invest in diverse founders, support existing small businesses, and focus on job growth within opportunity industries. San Diego will be able to drive a greater economic impact and broaden access to quality jobs, especially for people residing in communities with lower rates of educational attainment.

“When small businesses succeed, it leads to more quality jobs, better local economies, and healthier communities,” said Jane Finley, senior vice president and area manager, Kaiser Permanente. “We support this goal and invest in programs like Inner City Capital Connections because Kaiser Permanente believes that investing in small businesses and creating more quality jobs leads to improved health and well-being for every San Diego resident.”

EDC’s Inclusive Growth Steering Committee is led by large employers, who understand the crucial role that small businesses play in the regional economy.

In order to meet its goal by 2030, the Inclusive Growth Steering Committee is committed to collaborating with other regional employers through the following actions:

  1. Transparency – connect with and better understand existing local service providers to strengthen their capacity and resiliency.
  2. Engagement – commit to mentoring and/or building strategic partnerships with small businesses in high-growth, high-wage industries, particularly from underrepresented groups (women, minority, veteran, disabled, low-moderate income).
  3. Investment – invest directly in small business support programs, such as supplier diversification and growth acceleration initiatives.

For more information about these actionable recommendations or a complete list of employers committed to this effort, visit smallbiz.inclusivesd.org.

EDC’S INCLUSIVE GROWTH INITIATIVE

In 2018, EDC launched a data-driven initiative focused on promoting inclusive growth as an economic imperative, emphasizing that San Diego employers must take active measures to promote inclusion, or the region will no longer be able to compete with other regions. Together with its Inclusive Growth Steering Committee, EDC aims to set regional targets and release actionable recommendations for three main goals: build a strong local talent pool; equip small businesses to compete; and address the affordability crisis.

Additionally, San Diego recently won a $3 million grant from JPMorgan Chase’s AdvancingCities program to further propel the inclusive growth initiative and its goals.

For more information about the Inclusive Growth initiative, visit inclusiveSD.org. Join the conversation at #inclusiveSD.

**Read the full press release.**