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The Big Picture San Diego Blog

Economic Drivers

February 28, 2013

If you ask most U.S. sports fans to identify the fiercest rivalry in professional sports, many would quickly say, “Yankees and Red Sox.” Fans for both teams are incredibly loyal, united both in their regional pride and mutual distaste for the competition. But when you look closer at the actual numbers, it isn’t really a rivalry at all…in the past century, New York has clenched 27 World Series compared to four for Boston.

As a native Bostonian (side note: he now considers himself a proud San Diegan), Mark made it clear today at a breakfast forum hosted by the San Diego Press Club that this is very similar to California’s “rivalry” with Texas. In this scenario, California is the New York of job creation. Although both sides may have loyal contenders, when you look at the success Texas has had poaching jobs from the Golden State, there is no comparison. The numbers speak for themselves. California is leading the nation in private sector job creation. It is No. 1 in biotech, agriculture, high tech, entertainment and tourism.

As California and San Diego continue to face criticism from out-of-state politicians, the press and others for its “anti-business” policies, we must remember one critical fact. Time and time again, studies have shown that short-term economic incentives do nothing for long-term job growth. Yes, it’s fair to say that California could benefit from more business-friendly policies, but in San Diego, our traded economies –– military, tourism and innovation – are anchors for our growing economy.

All of that said, Mark told s crowd of about 40 local business leaders today, it’s not Gov. Perry’s $24K media buy that worries us, but some actual reforms/legislation (or lack thereof) that does:

●     TMD controversy— Removing ourselves from the legal side of this battle, we are looking at the sheer importance of these dollars for regional economic development. San Diego’s tourism industry is responsible for $18.3 billion in economic impact and employs 160,000 San Diegans. In 1993, Colorado eliminated its TMD, resulting in a 30 percent drop in its share of the U.S. travel market over four years.

●     Enterprise Zone Reforms—Although poaching jobs from other states and grandiose economic incentives don’t help long term growth, the EZ is a powerful growth tool for California helping companies like Soitec and the Wheat Group.

●     Sequestration/ Military Cuts—With the highest concentration of military in the world and 60 percent of California’s military assets, sequestration will be a devastating blow to San Diego’s economy, with approximately 30,000 jobs at stake. Many people also don’t realize the impact it would have on the high-tech and life sciences industries as well.

As Mark told the Press Club at the New School of Architecture + Design, at San Diego Regional EDC, our job is to attract, retain and expand businesses in the region. Everything we do, whether it’s advocating for certain policies or implementing strategic programs, is to grow jobs across the region.

And create jobs we do! In 2012, San Diego Regional EDC worked on 175 projects, creating 8,550 jobs in the region.

In addition to releasing the job numbers today, Mark stressed that San Diego needs to do more promoting and less comparing. Too often, San Diegans get caught up in comparisons with New York, Chicago, San Francisco and other great cities instead of focusing on the fact that San Diego is one of the very best places in the world for families and businesses.

He closed with one wish for San Diego: “gaining a little bit of confidence and whole lot of swagger.”

February 26, 2013

Mayor Bob Filner was the SD Press Club's first Newsmaker of 2013; Mark Cafferty will be its second. Join the San Diego business and journalism community for a breakfast this Thursday, Feb. 28 at 7:30 a.m. Mark will provide new EDC updates including the recent successes the organization has had generating and maintaining jobs throughout the region. He also will tell you how he really feels about attempts to lure businesses from California to Texas, and you'll get the latest update on efforts in Washington to curtail across-the-board budget cuts (known as Sequestration) scheduled to take effect Friday. You won't want to miss it.

Everyone is welcome! Please find more details and RSVP here

February 21, 2013

San Diego Venture Group gathered a diverse panel of San Diego-based venture capitalists recently to talk about their focus, how they spend their time, and what they recognize as red flags for prospective investments.

Jason Brown of Thomas McNerney & Partners made the first meeting/first date comparison with the comment that the venture investor/company relationship is like a marriage of sorts, except that you don’t want it to last … Compatibility is important when you’re going to spend so much time together. Brown concentrates on life sciences investing which carries huge risks and costs. “Getting to ‘yes’ is difficult. The elements of risk have to be achievable,” Brown said, “We have to look at clinical risk, scientific risk, regulatory risk, commercial and competitive risk.” Later, when a question came up about healthcare reform, he added reimbursement risk to the list. Despite these daunting odds, Brown said he spends as much as 50 percent of his time looking at new investments.

Steve Hamerslag of TVC Capital invests in software and software services. TVC Capital looks for investments where there is already $2 - $10 million in revenues and the company has reached a point where it is time to professionalize the organization. Hamerslag said TVC invests anywhere from $4 - $10 million in each company and expects to take an active mentoring role. Red flags for Steve? Issues with bad management or trust and inconsistent answers to questions about the business. He spends about 20 – 25 percent of his time looking at new deals and said that a recommendation from a trusted source really helps a company get his attention.

Afif Khoury of Scatter Ventures invests in many different areas. A quick look at the firm’s portfolio shows everything from farming to pharma. He spends about 20 percent of his time looking at new investments and will probably make two new investments in the next 12 months. Red flags for Afif? Too rosy an outlook and overselling. When asked what was most important – team, idea or opportunity, he answered that all are important. While he made it clear that Scatter invests in people, they’re looking for markets as well as management.

David Wise of Qualcomm Labs invests both internally (Qualcomm Life, Qualcomm’s wireless health subsidiary, originated in Qualcomm Labs) and externally with a focus on platforms that will drive new business for Qualcomm technologies. Wise spoke about their venture with EvoNexus, an incubator program within CommNexus where Qualcomm Labs @ EvoNexus has funded three companies. Wise says creating companies outside the walls of Qualcomm gives small start-ups more freedom while still having access to Qualcomm’s business and technology resources. Wise estimates he spends 30 – 40 percent of his time looking at new investments.

San Diego Venture Group and San Diego Regional EDC share office space. It’s great to have someone as knowledgeable as Dave Titus, SDVG’s President, within easy reach. Access to capital is a key requirement to maintaining and growing an innovation economy. Dave’s insight and connections within the industry help us work more effectively with entrepreneurs.

February 8, 2013


With more than 660 theaters in 52 countries across the globe, IMAX has established itself as an innovative name in the entertainment, technology, and distribution sphere. In 1973, when IMAX was in search of a location to erect its first dome theater, it seemed logical to do it in an innovative city like San Diego.
40 years and myriad movie theaters later, IMAX executives are back in San Diego as part of CommNexus’ MarketLink program. The program, which connects innovative regional companies with multinational corporations, provides another outlet for emerging businesses to showcase their technology to companies such as LG, SONY Electronics, Motorola Mobility, Verizon Wireless and British Telecom.
IMAX executives, Canadian Consulate representatives, and San Diego elected officials recently had the opportunity to link up and celebrate this innovation milestone at the site of the first dome theater, the Ruben H. Fleet Science Center. City of San Diego Mayor Bob Filner was on hand to emphasize his appreciation of companies like IMAX that continue to place value in San Diego, and also commented on the dynamic economic ecosystem that is encouraged by programs like MarketLink.  As chair of the City's Economic Development Committee, Councilmember Sherri Lighter also discussed the importance of maintaining the region’s competitive edge through generating new ideas and establishing new businesses.  
The anniversary also highlighted the important longstanding relationship between San Diego and Canada. Canadian Consul General David Fransen noted that IMAX was not the first Canadian company to participate in MarketLink. Research in Motion — which recently changed its name to BlackBerry after its signature device – came to San Diego in 2010. With support for other regional programs including WBT Innovation Marketplace, Canada—and through its regional consulates— has demonstrated a strong partnership between the two locales.
If the longstanding relationship between IMAX and San Diego tells us anything, it’s that we don’t see this partnership slowing down anytime soon. 
February 6, 2013


Statement from Mark Cafferty,  president & CEO of the San Diego Regional Economic Development Corporation, on Texas Governor Rick Perry's attempts to lure businesses out of California:
“At EDC we spend our days attracting, growing and retaining businesses. People choose to do business here because we are San Diego…because we are California, and because we have created a synergy and culture like no other. Companies make investments where big things happen, and big things happen here.
"Can California take steps to be more business friendly? Absolutely, but the fact remains that we are still number one in biotechnology, agriculture, high-tech, entertainment, foreign direct investment, and the list goes on and on. In San Diego, we are home to one of the nation’s most diverse economies, anchored by the largest military installation in the world.
"We are always open for business in San Diego and we welcome Governor Perry’s tourism dollars anytime he wants to drop into town.”
February 3, 2013

Many people recognize the importance of the defense sector in protecting us internationally, but fail to recognize that it also protects the local economy. From Qualcomm to essential innovation research, the defense sector has been instrumental in jump-starting many economic facets that make us proud to call San Diego home.

Not only do recent DoD cuts mean thousands of jobs at stake in various industries in the local economy, but also mean that this ‘quality of life’ that we have worked so hard to build is in jeopardy.

Please read Mark’s column in the U-T  to learn about some of the steps EDC and regional partners are taking to defend this vital facet of our economy.

January 31, 2013

San Diego's nonstop flight to Tokyo has resumed service with an alternate aircraft, a Boeing 777. Japan Airlines (JAL) has announced they are resuming Mon/Wed/Fri service through February 17.  Schedules thereafter will be announced as soon as they are confirmed. Additional information can be found at



January 28, 2013

San Diego venture capitalist and entrepreneur Greg Horowitt took the EDC board of directors on a virtual zip line tour of his new book “The Rainforest: The Secret to Building the Next Silicon Valley” at a recent meeting. San Diego has served as a living lab for Horowitt, who is one of the founders of Global CONNECT, a San Diego-based network committed to growing new technology clusters worldwide.

Horowitt asks a provocative question: Can we engineer serendipity through design? The answer is yes – if we are designing a culture and a system for innovation. Using the contrast between a plantation and a rainforest, he illustrates the prized attributes of a plantation: order, precision, accuracy, productivity, and (to make the comparison work) no weeds. Then imagine a rainforest: it mixes diverse elements together that encourage the development of new species and allows weeds to grow unchecked.

In San Diego, we talk about an ecosystem of innovation.  According to Horowitt, the roots of an ecosystem are smart policies, supportive infrastructure, flexible but strong intellectual property frameworks, enterprise and entrepreneurial support, and a robust capital “food chain.” It also includes an informed and engaged private sector, proactive innovation leadership development, responsive and responsible workforce development that includes skill-building initiatives, active youth engagement, and university – industry linkages. A quick scan of the San Diego innovation landscape reveals that, as a region, many of these roots are well established and are growing branches that expand our economy and prosperity.

Horowitt’s Rules of the Rainforest are straightforward and time-tested:

Rule #1: Break rules and dream.

Rule #2: Open doors and listen.

Rule #3: Trust and be trustworthy.

Rule #4: Experiment and iterate together.

Rule #5: Seek fairness, not advantage.

Rule #6: Err, fail, and persist.

Rule #7: Pay it forward.

The living lab of San Diego has given Horowitt insights that he and his Rainforest co-author Victor Hwang hope will lead to a focus on the development of innovation systems rather than the more traditional emphasis on innovation at the micro level of individuals and teams. Horowitt and Hwang have given San Diego a thoughtful, well-researched look at what it takes to build innovation capacity.

January 11, 2013

A report released today detailed the impact of Qualcomm Incorporated—San Diego County’s largest private employer—on the regional economy.  Sponsored by San Diego Workforce Partnership with guidance and insight from San Diego Regional Economic Development Corporation,  “The Economic Impact of Qualcomm: Driving San Diego’s Technology Growth,” provides insights and analysis into the economic contributions of Qualcomm as well as the broader telecommunications and information technology (T&IT) industries in San Diego. The report also includes a workforce needs assessment.
The mobile giant’s presence in the regional economy adds $4.53 billion in economic activity annually, equal to about three percent of the county’s Gross Regional Product (GRP) in 2010. Every dollar generated directly by the company equates to nearly $2 of economic activity in the region, making the yearly economic impact of Qualcomm equivalent to one and half 2012 London Olympic Games.  
Take a look at the complete study and executive summary.
December 21, 2012

“Good News of the Week” was born out of a casual conversation in the conference room. Someone mentioned the positive headlines the region was getting and before we knew it we’d been around the room and everyone had something to contribute. We live in one of the greatest places in the world and it seems like we don’t spend enough time recognizing our regional accomplishments. So we started pulling together the good news of the week and sending it out to our stakeholders. Now, people from around the region send us their news and week by week we have seen the readership grow.

This week, we thought we’d mix things up a bit: we present to you “Good News of the Year,” a collection of the top 10 stories that came out of the region in 2012.

Here’s to many more positive headlines in 2013.

Wishing you the best,
San Diego Regional EDC Team

P.s. If you don't subscribe to our newsletter now, you can do it here.

1. Clinton lauds San Diego's model of collaboration
In September, the region gained national attention when Former President Bill Clinton made an appearance on Jon Stewart’s "The Daily Show." When asked about how public and private entities could work together, he immediately jumped to San Diego as a model of collaboration, citing Qualcomm, UC San Diego , and Craig Venter as innovative partners in the region. That wasn't the first time Clinton praised the region. In June, he made similar remarks on CNBC's "Closing Bell." You can watch the complete clip of Clinton's "The Daily Show" appearance here: (3:30 is where he begins talking about the region.) 


2. Operation San Diego in full force
San Diego is home to the largest concentration of military in the world. With a quarter of the jobs in the region linked to the military, sequestration (automatic spending cuts that will be triggered if a budget resolution is not passed), threatens to ripple through every sector of San Diego's economy. Recognizing the threat to the local economy, business and community leaders have worked together on a collaboration known as "Operation San Diego," an initiative to protect the region's military assets. lt has been widely successful: regional leaders have helped establish a full-time presence in Washington and were invited to speak at a White House Business Council meeting. Numerous community and business related educational panels have also been held. On a state level, San Diego has been looked to provide leadership in this area, proving that San Diego has the resources to mobilize not only the region, but the state.


3. Filner becomes SD's 35th Mayor
On Dec. 3, crowds from around the Mega-Region gathered  to watch Bob Filner become the 35th mayor of City of San Diego. Filner proposes to bring new voices to City Hall to reflect our more ethnically diverse city, improve relationships with municipal employee unions, make the port an engine for job growth, and to focus additional attention on individual neighborhoods.


4. Forbes names Debra Reed a 'power woman'
There are now 20 female CEOs running America's largest companies; one of them is right here in San Diego. In August, Former EDC Chair and CEO of Sempra Energy Debra Reed was recognized by Forbes as one of the nation’s most influential female CEOs. Also recognized as one of Fortune's "50 most powerful women in business" for the second straight year, Reed became chairman of Sempra in December.


5. Brookings mentors San Diego to create International Export Plan
The world renowned Brookings institution  selected San Diego to participate in its Metro Export Initiative, a project that helps regions implement customized Metropolitan Export Plans. As the eighth largest city in the U.S., San Diego ranks 17th among the top 100 largest U.S. metro areas in international exports. The plan, which will be formulated in 2013, will help expand San Diego's exports and increase job creation throughout the Mega-Region. 



6. SD establishes a direct link to Asia
On Dec. 2, a 787 Dreamliner aircraft  left Lindbergh Field for Narita International Airport in Tokyo, establishing San Diego's first direct flight to Asia. The new service provided by Japan Airlines is expected to have a huge economic payoff for San Diego due to a forecasted 67 percent spike in visitors to the U.S. from Asia over the next five years. With nonstop service to both Asia and the United Kingdom, San Diego is joining its big-city rivals as a player in the growing market for international travel.


7. Soitec opens plant in SD
It's no surprise that San Diego is leading the way in renewable and solar energy. If the region were a nation unto itself, it would rank among the top 25 nations in the world in terms of solar capacity. Solar Giant Soitec helped the region uphold this ranking when it chose San Diego as its new North American home, creating 450 jobs in the region. The Rancho Bernardo facility, which opened on Dec. 19, is located in a newly expanded enterprise zone.


8. SD quenches thirst with new desalination plant
The region recently made national headlines when the San Diego County Water Authority voted to utlize the largest water desalination plant in the Western Hemisphere with the recent approval of Poseidon Resources' Carlsbad Desalination Project. The project provides 50 million gallons of water to the city per day, enough to quench the thirst of 450,000 residents, as well as reduce its reliance on outside sources. The construction of the plant will provide more than 2,300 jobs and will sustain 575 jobs when it is completed in 2016.


9. California's economy on rebound
When the global economy started to collapse in 2007, out-of-state politicians, the media and others painted California as the poster child of the economic downturn. It was a long slog but in 2012, there have been more positive indicators that things are continuing to improve: tourism and manufacturing have seen steady upticks, companies are not only staying in the region, they're moving here. We've seen that San Diego, with its superb quality of life and tremendous talent pool, has proven that it has the unique ability to be where California begins again.

10. Community funds public market
Seattle has Pike Place. London has Borough Market. San Diego will soon have its own permanent fixture to add to this list: The San Diego Public Market in Barrio Logan. What is most remarkable about this projects is the fact that it was initially funded entirely through the community with kickstarter, a platform for funding creative projects. In six short days, the community came through, raising more than $100,000 via 1,379 backers. The market will permanently open in spring 2013.