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inclusive economic development

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.**

 

April 16, 2018

This op-ed was first published in the San Diego Business Journal, authored by EDC's Dr. Nikia Clarke, Brown Law Group's founder and owner and incoming EDC Board Chair Janice Brown, and Brookings Institution's Amy Liu. 

San Diego is poised to become an unstoppable force in the global economy. The region is home to 34 percent more STEM workers than the national average, ranks third in the U.S. for patent intensity and has the sixth highest rate of income mobility.
 
While the rise of the innovation economy has created wealth and opportunity, it has also left many residents behind. This is leading to wide economic inequalities that, if left unaddressed, will cause San Diego to lose employees and companies to other regions.
 
San Diego Regional EDC and the Brookings Metropolitan Policy Program have collaborated over several years to make San Diego a prosperous global city. Last year, San Diego joined Brookings in a learning lab focused on inclusive economic growth. Here is what we learned:
 
According to the Center on Policy Initiatives, more than one million residents cannot afford to live in San Diego. Driven by wage increases in the innovation economy and constraints on the supply of housing, the region now has the fourth highest cost of living in the country.
 
San Diegans are spending an increasingly greater proportion of incomes on housing. These pressures are already impacting some of San Diego’s largest employers, as prospective talent opts for competing regions with lower costs of living.
 
In San Diego, more than 98 percent of the region’s employers are small businesses (less than 100 employees), which have less capital available to pay competitive wages. Employees of small businesses typically earn up to 20 percent lower wages than their peers at larger corporations. Because of this dynamic, the region’s small businesses struggle to compete with larger companies for skilled talent.
 
And this all comes at a time when workforce demographics are rapidly changing. Brookings research has shown that 59 percent of millennials and 67 percent of post-millennials in San Diego are racial and ethnic minorities. By 2030, Hispanics will become San Diego’s largest demographic group, and yet 85 percent currently do not hold a bachelor’s degree or higher.
 
Achievement Gap
 
Unless all San Diegans are willing to invest in closing this minority achievement gap, we will continue to constrain the region’s ability to compete in the global market. Employers cannot simply rely on the in-migration of workers. The real opportunity lies within our local talent pool. 
 
With the compounded impact of a high cost of living, low educational attainment in our fastest growing population and a small business-centric economy that struggles to pay competitive wages, San Diego has a problem that cannot be ignored. They point to an economic imperative for change. We must recognize that the roots of exclusion are economic, and must be systematically addressed by employers and policymakers, not left to philanthropy.
 
Calls to Action
 
Over the next year, a regional Steering Committee will be releasing research and recommendations to address these challenges that together create a platform for inclusive growth.
 
If leaders do not take measures to promote economic inclusion, San Diego will find itself unable to compete in a global economy that is increasingly unforgiving to businesses and regions that cannot adapt. If San Diego tackles these challenges head-on, it will position itself as a national leader among metro areas in building an innovative economy that works for all.
 
San Diego has evolved from border town, to military hub, to tech and innovation powerhouse. With the will, leadership and a healthy dose of experimentation and collaboration, San Diego can build an economy that reaches and includes all of its residents and employers.
 
Janice Brown is president of Brown Law Group. Nikia Clarke is executive director of World Trade Center San Diego. Amy Liu is director of the Metropolitan Policy Program at the Brookings Institution.

 

 

 

 

 

March 27, 2018

"Why Economic Inclusion is Crucial To San Diego," was originally published on GlobeSt.com. Reporter Carrie Rossenfeld interviewed Cynthia Curiel of Northrop Grumman.

It’s vital that San Diego employers act to close the minority-achievement gap, equip small businesses to compete and address the affordability crisis, Northrop Grumman’s Cynthia Curiel tells GlobeSt.com.
 
San Diego Regional EDC recently launched a data-driven initiative to drive economic growth and inclusion in the region. Catalyzed by San Diego’s participation in the Brookings Institution’s Metropolitan Policy Program learning lab in 2017, EDC released research that highlights the region’s economic pain points and necessity for an employer-led approach to tackling inclusivity issues. Simultaneously, the organization held a program called “Future of Growth: the economic case for inclusion,” with keynote remarks by Amy Liu, Brookings Metropolitan Policy Program.
 
“Despite record-low unemployment and a renowned innovation ecosystem, San Diego has an inclusion problem that cannot be ignored,” said Mark Cafferty, president and CEO of San Diego Regional EDC, in a prepared statement. “Small businesses cannot compete with larger corporations, while one million people cannot afford to live here. This initiative is a call to action for San Diego’s employers – we must come together to bridge the gaps in our economy.”
 
Convened by EDC, a steering committee of local employers will work to create an actionable platform to achieve three goals: close the minority achievement gap; equip small businesses to compete; and address the affordability crisis. The committee consists of nearly 40 local employers including Northrop Grumman, Solar Turbines, Sempra, Thermo Fisher Scientific, San Diego Padres and more.
 
We spoke with Curiel about why economic inclusion is so vital for our region, what some of the best practices for inclusion are and advice she would give to other companies about inclusivity.
 
GlobeSt.com: Why is economic inclusion imperative for growth internally and across the region?
 
Curiel: Our nation is facing record-low unemployment rates. At face value, this is good news—it means people are working and the economy is producing, but it also means that employers and regions are facing intense competition for skilled talent. While it is important to ramp up talent-attraction efforts, we also must look to incubate a local talent pool. However, when looking at our current economic realities, this is a difficult feat for San Diego to accomplish. For starters, San Diego is an expensive place to live, with the fourth-highest cost of living in the nation.
 
Secondly, small businesses are the backbone of San Diego’s economy. More than 98% of our businesses are small businesses (under 100 workers). On average, small businesses pay 20% lower wages than their peers, making it more difficult to compete for talent. Lastly, although there may be an abundance of jobs in the innovation economy, there is a shortage of skilled workers to occupy them. Hispanics are the largest and fastest-growing demographic population in San Diego, yet are statistically the least prepared for high-skilled, high-wage careers, with only 15% holding at least a bachelor’s degree.
 
The compounded impact of a high cost of living, small businesses that cannot afford to pay competitive wages and low educational achievement in our fastest-growing population have created a problem that if ignored, will undermine San Diego’s regional competitiveness. While the answer is not easy or straightforward, it’s vital that San Diego employers act to close the minority achievement gap, equip small businesses to compete and address the affordability crisis.
 
GlobeSt.com: What are some best practices for inclusion in this sense?
 
Curiel: Simply put, the face of our workforce needs to reflect the face of our nation. At Northrop Grumman, we believe that fostering diversity and inclusion in our workforce and workplace is pivotal to promoting innovation and increasing productivity and profitability.
 
We offer a wide range of programs and activities turning our leadership focus on diversity and inclusion into tangible reality for our people from programs that cover education, employee-resource groups and work/life balance assistance, to name just a few.
 
We believe that a diverse workforce is a stronger and higher-performing workforce that results in more-engaged employees, which drives greater creativity and innovation into our business, resulting in more-impactful outcomes for our customers.
 
We want our employees to be comfortable bringing their authentic selves to work every day, which ultimately makes our company stronger, more resilient and more unified when faced with challenges in a rapidly changing and competitive world where we need everybody pulling together.
 
We also hire and mentor our nation’s wounded warriors through Operation Impact. By investing in underrepresented groups, we are not only enabling individuals to reach their full potential, we’re also leveraging untapped resources full of unique experiences, ideas, knowledge and skills to make our company, our culture and our products better.
 
We also know that in order to grow and diversify the talent pipeline, we need to inspire STEM- curious minds at an early age and that’s where our work starts. We partner with school districts and non-profit organizations in a deliberate effort to reach K-12 students from underrepresented communities throughout San Diego County. Some of our strategies include bringing kids on campus for hands-on STEM activities and high school internships, sending our engineers into the community to talk about their careers and providing direct financial support to public schools and non-profit organizations with engineering and technology-based programs.
 
Through the Northrop Grumman Foundation, we are able to expand our reach as we work to connect youth to STEM careers and provide professional development resources for their teachers. Each year we send students and educators from local school districts to Space Camp in Huntsville, AL. Through the Foundation’s Fab School Lab program, Harriet Tubman Charter and the Del Dios Academy of Arts & Science both received $100,000 grants to build state-of-the-art science labs at their schools. For the past few summers, we have hosted local middle-school teachers with a focus on science and technology at our sites in San Diego for a two-week externship where they develop lesson plans based on “real world” applications of STEM principles. In addition, to extend our pipeline of talent through college, graduation and into the workforce, we have robust programs in place where we build direct relationships with some of the most talented engineering students in the country. We are focused on a number of target colleges, including those right here in San Diego, such as San Diego State University and University of California San Diego. This ensures that we are harnessing the strength of our local talent; we are hopeful that by engaging with students at a younger age, they will be inspired and excited by the broad range of opportunities that Northrop Grumman and other local companies offer once they enter the workforce.
 
GlobeSt.com: What advice would you give to other companies that are looking to be more inclusive?
 
Curiel: An investment in your community is an investment in your company. It’s no secret that San Diego is home to some of the brightest minds in the world, especially given the life-changing technology and life-sciences developments taking place. But just think of how many more brilliant minds there would be in our local talent pool if employers embraced diversity and provided the same resources and opportunities to San Diegans in disadvantaged parts of our region. Creating training programs and educational opportunities in these communities is just one way to promote inclusion, develop local talent and create lifetime advocates for your company. So, take a look around. Your next top engineer or scientist could be waiting for you to give them the tools to help them get there.
 
GlobeSt.com: What else should our readers know about the EDC’s recent inclusive- growth event?
 
Curiel: We must recognize that the issue of inclusion is, in fact, an economic imperative and must be systematically addressed by employers and policy makers—not simply left to philanthropy. As San Diego employers, it is our job to embrace the different pathways and experiences of this diverse workforce and use it to our advantage. The Inclusive Growth event included a keynote from the Brookings Institute’s Amy Liu, San Diego Regional EDC’s Nikia Clarke and various members of this initiative’s steering Committee, of which I am very proud to be a part. Over the next year, we will be releasing research and recommendations that together create a platform for inclusive economic growth.
 
It’s not just about creating more jobs; it’s about creating a trajectory of higher growth that comes from increasing the productivity of our local workforce. This won’t happen overnight, but I believe that together we will overcome these challenges head-on and create a better San Diego in which all can thrive. And we will be a better San Diego because of it. Follow along at #inclusiveSD and sandiegobusiness.org/inclusivegrowth.
September 29, 2017

Last week, members of the EDC team joined 20 board members, investors and partners on a trip to Louisville, Kentucky. The purpose was to learn about that city’s emphasis on inclusion and compassion as focal points for their branding and economic development efforts. We met passionate people—both in the private and public sectors—who are working hard to create a community that is uniquely Louisville.

Louisville Mayor Greg Fischer set the tone when he welcomed our group Wednesday evening and stayed to talk with us about Louisville’s past, its present challenges and the city’s goals around lifelong learning, health and compassion. Louisville’s challenges are significant, but they do not shy away from talking about them openly. And there is a genuine continuity to how people raise, speak about and confront these issues.

Research and workforce representatives presented hard-hitting data on the region’s existing economic disparities, as well as ambitions to add 55,000 degrees over a ten year span. The city’s economic development team and business leaders explained how the region has to work harder than most to attract and retain talent, and showcase their region as a place that is ripe for investment and growth—despite having 30,000 current job openings and being among the most affordable of large metros.

Many of the challenges that they face today stem from events that happened generations ago. But they embrace their past with the belief that they can’t chart where they are going if they ignore where they have been. Addressing a history of racial segregation, poverty and stagnant population growth are as much a part of their economic development discussion and focus as attraction, retention and expansion. The authenticity that was threaded throughout our visit culminated in an honest dialogue among our delegation.

San Diego’s Story

Back home, San Diego has experienced solid economic growth, led by its innovation industries, which have added jobs three times faster the overall economy1. However, this prosperity has not been shared by all San Diegans. A recent study found that there are more than one million people in our region with incomes too low to afford basic costs of living—the numbers are even more appalling for our black and Latino populations.

In San Diego Latinos represent one-third of the population, and are projected to be the majority by 20302. Yet only 17 percent have completed a bachelor’s degree program or higher3. Meanwhile our region has a deficit of 4,500 STEM graduates4. But talent shortages exist in every metro area—our population is our talent pool.

And while we have large employers in our region that are the vanguard of innovation, 59 percent of our workforce is employed by smaller firms that often pay below average wages5. Layer on the fact that San Diego has the second highest median home price and is the fourth most expensive metro to live in6, and you quickly see the risks to our competitiveness as a region.

We spent the past six months working with key partners to develop our story and better understand our own regional challenges. And in the coming weeks we will reassemble our delegation, as well as business and community leaders, to build an economic development agenda that benefits more people, companies and communities: an agenda that grows our own talent, bolsters small- and medium-sized firm growth, and addresses the cost of living pressures on talent attraction and retention.

There is a lot of work to be done, and it will require great collaboration and coordination. Our mission at EDC is to maximize the region’s economic prosperity and global competitiveness. To live up to that mission our economic development strategies must promote and account for growth and inclusion.

Click here for an EDC-produced research profile on the Louisville and San Diego economies.

Footnotes

1.      U.S. Bureau of Labor Statistics, 2006-2015.

2.      American Community Survey, 2016; SANDAG population projections.

3.      American Community Survey, 2016.

4.      EMSI, 2017.2.

5.      Firms with fewer than 100 people; CA EDD Business Statistics, 2015.

6.      Among 50 most populous metros; National Association of Realtors, 2017; C2ER, 2017; EMSI, 2017.3.

July 14, 2017

In early 2017, the Brookings Institution’s Metropolitan Policy Program selected San Diego, along with Indianapolis and Nashville, to participate in a six-month intensive learning lab focused on inclusive economic development. During the lab, EDC worked alongside the City of San Diego, the Jacobs Center for Neighborhood Innovation, and UC San Diego extension, to develop a deeper understanding of specific barriers to economic inclusion impacting a variety of populations across the region. The outcome of the learning lab is a data-driven narrative that will inform EDC’s strategy as we work towards an economic development agenda that benefits more people, companies and communities.

San Diego is flourishing economically, with an innovation economy and a culture of collaboration that is driving growth and transformation. According to a Brookings analysis of 50 US metros, San Diego ranks 6th in upward mobility, meaning there is a greater likelihood that an individual born into San Diego’s lowest income quartile will end up in the highest income quartile. This fact, backed by the accomplishments of a range of programmatic models and initiatives by partner organizations – Accion, Connect, CDC, Junior Achievement, to name only a few – proves the success this region has demonstrated in terms of connecting communities to the drivers of our economy.

With an unemployment rate of 3.9 percent, the region is approaching full employment, meaning companies have incentives to offer pay raises and compete for talent. However, a 2016 study by San Diego-based Center for Policy Initiatives found there are one million individuals in San Diego that are living below self-sufficiency standards. This means that one third of our population cannot afford a no-frills cost of living without public or private assistance.

A nationwide battle for talent, a soaring cost of living at home, and a growing number of San Diegans unable to make ends meet are combining to form an unequivocal threat to our regional competitiveness. We cannot afford to ignore the large parts of our region that are disconnected from the engine of growth.

EDC, with a mandate to mobilize the business community around a broad economic development strategy, has committed to mainstreaming access and opportunity for all San Diegans into that overarching strategy. Over the duration of the 6 month learning lab, EDC interviewed over 25 companies, agencies, and organizations who are engaged in innovative and impactful best practices that guide families, individuals and companies on a path towards greater economic prosperity. We hosted Brookings research teams, and worked with public, private and nonprofit partners to convene dozens of roundtables and tours across the region. And we built a data-driven narrative that outlines the costs to our competitiveness of the growing number of San Diegans without access to opportunity, networks, and skills. .

For us the work is just beginning. As the learning lab comes to a close, we begin to look at the next phase: strategy. We will continue to lean on our growing network of partners and stakeholders over the coming months as we work with and through them to craft a plan that works to make our economy more inclusive, more competitive, and more resilient. Stay tuned.