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The Big Picture San Diego Blog


March 12, 2013

175 projects. 6, 215 jobs. What a year 2012 was. Check out our annual report, detailing some some of the highlights and programs from last year.

To all of our investors, partners and the rest of the San Diego business community, thank you for helping us carry out EDC’s mission is to maximize the region’s economic prosperity and global competitiveness. 

March 4, 2013

CaliBaja MegaRegion

How many positive articles about Mexico does it take to confirm a trend? Three seems about right, but add in a major think tank calling 2013/2014 the “Year of Mexico,” and you’ve got a full-fledged movement going on.

First came Chris Anderson’s New York Times opinion piece titled “Mexico: The New China,” where he describes his cross-border company 3D Robotics. With facilities in both San Diego and Tijuana he is able to do what he calls “quicksourcing,” where the short supply chain between the two locations enables the company to innovate faster and control inventory more efficiently. Anderson, who was the editor of Wired before he left to join 3D Robotics full time, compares the Hong Kong and Shenzhen special economic zone of the late 1990s and early 2000s to today’s experience working between San Diego and Tijuana. “The sense of possibility I felt when I first crossed from Hong Kong to Shenzhen in 1997 is what I now feel when I cross from San Diego to Tijuana,” said Anderson.

Flat-worlder Thomas Friedman weighed in from Monterrey, Mexico on “How Mexico Got Back in the Game,” with stats on Mexico’s trade with the U.S. – a staggering $1.5 billion a day. Friedman cites The Financial Times reporting that Mexico has signed 44 trade agreements, which is more than any country in the world, and exports more manufactured products than the combined exports of all other Latin American countries. “Better integration of Mexico’s manufacturing and innovation prowess into America’s is a win-win. It makes U.S. companies more profitable and competitive, so they can expand at home and abroad, and it gives Mexicans a reason to stay home and reduces violence,” wrote Friedman.

Violence is where USA Today’s article “Mexico’s commerce crawls back from drug war’s chaos,” started – but the story focused on the fact that border violence has been dropping steadily in the last year –  quoting a study from the University of San Diego’s Trans-Border Institute citing that organized crime-related murder in Mexico dropped 21 percent in 2012. In Mexico’s six border states the drop was a dramatic 32 percent.  San Diego Regional EDC’s Christina Luhn, who leads the Cali Baja Bi-National Mega-Region initiative, worked closely with the reporters and introduced them to people on both sides of the border.

EDC Vice President Sean Barr was in Washington DC last week for meetings at the Brookings Institution regarding their Metropolitan Export Exchange program where teams of metropolitan leaders are working on developing Metropolitan Export Plans to improve their global trade strategies so the nation can remain a center of growth and innovation for years to come. At the meeting Brookings announced that 2013/14 will be the “Year of Mexico.” According to Barr, the ongoing reshoring and nearshoring trends have attracted their attention. Their effort will start with an in-depth study of US-Mexico supply chains.  “The Mega-Region Initiative is of considerable interest to them,” he told the EDC team.

Let’s make sure it’s really the year of cross-border progress.


March 1, 2013

A message from Mark Cafferty

As you are aware, the law of sequestration will likely take effect today. The result – essentially a 10 percent across-the-board cut of all federal programs, projects and activities – will bring a dense rolling wave of financial implications for our region.
The impact to our military economy is significant. The impact to our innovation economy is troubling. The impact to our tourism economy compounds the problem we already have with the region’s TMD standoff. Effects throughout the local economy will be felt in the coming months and thousands of jobs are at risk, quickly making this a harsh reality for families and businesses across the region.
These cuts have the potential to set back medical research and our innovative economy by a generation or more, according to former NIH director Dr. Elias Zerhouni. Imagine all that will be lost – life-altering innovations, technological breakthroughs, not to mention jobs and businesses. There will be immediate impacts, for sure. We’re already seeing some. But the long-term effect – the slow and steady burn – is what really has the potential to hurt San Diego most. 
Our partner Larry Blumberg, Executive Director of the San Diego Military Advisory Council (SDMAC), put it this way: “Defense contractors are going to be the first ones let go — and we know some of them are already starting to receive pink slips. In mid-April, the Department of Defense is going to furlough civil servants one day a week. This would impact 25,000 San Diegans, and a day’s pay for each of them is a lot of money to take out of the local economy.”
Just this past Tuesday, EDC received notice from GD NASSCO that the company has informed 1,040 employees in San Diego, Norfolk and Mayport that layoff notices would likely be issued in early April. Notices from BAE, Continental Maritime and other shipbuilders also have been received by our office over the past month totaling an additional 1,321 job losses. The job numbers are real and estimated to total more than 5,500 in the shipbuilding industry alone.  
It’s also worth noting that sequestration is only one of the challenges coming out of Washington.  We face additional threats in the weeks ahead.
On March 27th, the current continuing resolution (CR), the mechanism through which the federal government draws funds it needs to operate, will expire. A federal government shutdown is on the horizon without a new CR in place before the end of March.
At some point toward the end of March, President Obama is expected to deliver a budget for fiscal year 2014. Based on everything we are hearing in Washington, I believe a request for another round of base realignment and closures (BRAC) will likely be included within that 2014 budget.
On May 19th, the current debt ceiling will be reached, which represents an unprecedented fourth fiscal event in three months with serious implications for the country and San Diego’s economy.
There is plenty our region must do. EDC, SDMAC, the Chamber of Commerce, CONNECT, BIOCOM and other partners are ramping up efforts in Washington, Sacramento and throughout the region to ensure that our military and innovation economies are protected. We thank you all for your interest and support to date. As always, we will work to keep you informed of both the implications and challenges we face, along with our plans for addressing them in the weeks ahead. 
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.


November 29, 2012

A series of recent articles and reports emphasize what San Diego mega-region watchers already know: Mexico’s auto industry is quickly becoming one of the country’s major manufacturing success stories. A publication released by Jones Lang LaSalle outlined why they believe Mexico “is an increasingly attractive supply chain (manufacturing and distribution) location when looking to access the United States and elsewhere.” They mention low labor costs (while China’s are increasing), a skilled workforce (more than 90,000 students graduate from engineering and technology programs every year) and ever-improving supply chain infrastructure – with shipping lead times a fraction of what they are from China (15-20 days or more to US ports from China versus 48-72 hours direct to market by truck from Mexico).

The Wall Street Journal weighed in on the topic with an article detailing the plans major car makers have for expanding production facilities in Mexico, including Volkswagen, Honda, General Motors, Mazda, Fiat and Nissan. Volkswagen’s Audi division is planning a new plant with a $1.3 billion price tag.

According to the Wall Street Journal, one in 10 cars sold in the US last year was made in Mexico. The country ranks fourth in auto exports behind Germany, Japan and South Korea but the Mexican government believes they will pass South Korea in the coming years based on the level of planned expansions.

Finally, a special section dedicated to Mexico appeared in The Economist magazine with one article aptly titled “Seńores, start your engines.” In addition to the same positive comments regarding labor costs, skilled workers and transportation, their commentary points to the ambition of new president Enrique Peńa Nieto to increase annual growth in the Mexican economy to 6% during his six-year term. The auto industry will play a significant role in making that growth a reality.