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The Big Picture San Diego Blog


Inclusive Growth

October 3, 2019

As a way to inspire new approaches to inclusive economic development, EDC organizes an annual leadership trip with its partners and stakeholders in a peer region facing similar challenges. This year, EDC led a delegation of more than 40 San Diegans to Atlanta, Georgia – a city with deep cultural and historical significance. After three full days of dialogue with some of Atlanta's most progressive and impactful leaders, our group came home with three main takeaways.

1. The decisions we make today will have lasting impacts on future generations.
We started off the leadership trip the way EDC approaches everything we do: with research. We learned how Atlanta's history of racial inequity directly impacted the way the city was developed. It affected where public transportation would run, where good schools were built, who received loans to buy a house or start new businesses, and much more. Rohit Malhotra of Center of Civic Innovation stated, "96% of people born poor in Atlanta will die poor in Atlanta." The disparities facing Atlantans today are deeply rooted in the region's history. And because it's leaders are willing to take a honest look at that history, that they are able to bring about lasting change. This inspired thoughtful discussion on how San Diego's own history has shaped the way our communities live today, and will hopefully lead to further investigation into our region's past, so that we can create sustainable solutions for our future.

2. Transportation can either exacerbate or alleviate existing problems.
Perhaps the biggest historic factor inhibiting Atlantan’s economic prosperity is access to transportation.  Because the city was designed to separate black and white populations, many low-income areas of the region simply do not have access to good jobs and affordable housing. In reference to predicting economic and health outcomes for Atlantans, Carol Naughton of Purpose Built Communities shared that "zip code impacts more than genetic code." To combat this, organizations like Purpose Built Communities, TransFormation Alliance, and Historic District Development Corporation formed and work together to create an infrastructure that will support healthy, sustainable, and affordable communities. Thanks to their support and a transformational vision for redevelopment by Ryan Gravel, the Atlanta BeltLine was created to connect disparate neighborhoods and is drastically changing the way people live. That kind of positive peer pressure is what is bringing about change unlike anything the city of Atlanta has ever seen before. People who were previously displaced from quality jobs and access to transportation can now walk or bike to the grocery store to buy healthy food for their families. They can walk to a quality job that pays enough to support themselves. The thoughtful collaboration between these entities shows us that this level of systems change is, in fact, possible when organizations work together to take action.

3. It's critical for younger generations to see themselves in leadership roles.
Inside the historic International Martin Luther King Jr. Chapel at Morehouse College, we heard about the importance of talent development investments from members of the Atlanta University Center Consortium. As Spellman College President Mary Schmidt Campbell eloquently said, "when students are affirmed, they do better." Organizations like Cristo Rey Atlanta High School, a private school for underserved students who don't pay tuition, help students and their families with hands-on college preparation, like the college application process. Interim President Camille Naughton said, "It's barriers like filling out a FAFSA application that keeps students out of college - not intellect or lack of desire." Clearly, the education systems in Atlanta understand that a bright future in Atlanta largely depends on significant investment in its students today. We also heard from Brookings Institution Fellow Rodney Sampson, who co-founded the Opportunity Hub (OHUBS) to eliminate barriers for minority tech founders. Rodney believes that building an inclusive economic ecosystem starts with early exposure to innovation and socialization. He said, "When you're exposed to innovative ecosystems, the trajectory of your ability to acquire wealth changes." Through organizations like these, students and young entrepreneurs see that they're worth investing in. They see themselves as a leader, who can take action and make an impact.

From hearing about innovative talent development strategies and inclusive entrepreneurial ecosystems at Morehouse College, to walking along the Atlanta BeltLine that is radically changing the connectivity of Atlantas's neighborhoods, our group gained invaluable insights that spurred thoughtful conversations about creating a better San Diego that works for all. The transformation in Atlanta was palpable. After immersing ourselves in its rich history and hearing first-hand experiences from Atlanta's civic, education, and business leaders, one thing is clear: our inclusive growth work in San Diego is far from over, but we're on the right path.

 

This trip was made possible through generous support from Southwest Airlines and Cox Communications.

To learn more about EDC's Inclusive Growth effort, visit inclusiveSD.org or follow along on social media at #inclusiveSD.

 

 

October 2, 2019

In an effort to address San Diego’s soaring cost of living, San Diego Regional EDC and its Inclusive Growth Steering Committee of 40 employers officially endorsed a regional goal to create 75,000 newly thriving households by 2030. Driven by the findings in EDC’s latest study release, this regional goal and accompanying set of recommendations aim to address key factors (housing, transportation, and childcare) impacting San Diego’s affordability crisis – the last of three main goals of a regional Inclusive Growth agenda.

"While San Diego's affordability crisis impacts everyone in the region, it has a disproportionate and devastating impact on African American and Hispanic communities,” said Mark Cafferty, president and CEO, San Diego Regional EDC. “The lack of affordable housing is a significant part of the problem, but those impacted are also the same residents who are dealing with the longest commute times, childcare deficits, limited connectivity to public transportation, and other barriers that make access to high-wage, high-skilled jobs particularly more difficult and burdensome."

ADDRESSING SAN DIEGO’S AFFORDABILITY CRISIS
In its new study, EDC found that the majority of household incomes in San Diego do not meet the region’s expected cost of living ($96,000 annually for owner-occupied households and $61,000 annually for renter-occupied households). The cost of housing – twice the average among U.S. metros – is the primary driver of the region’s growing cost of living, pushing residents further away from job centers and resulting in longer commute times and increased cost of transportation.

Additional key findings include:
Affordability: San Diego is 47 percent more expensive than the average U.S. metro.
Housing: Half of all homeowners do not earn enough to cover their cost of living, and nearly 60 percent of all renters fall thousands of dollars short each year.
• Transportation: The average household spends more than $14,000 on transportation and travels nearly 20,000 miles over the course of a year.
• Childcare: There are now nearly twice as many children under the age of six with working parents as there are licensed childcare spaces available.

With the fifth highest median home price, staggering commute times for its poorest residents, and substantial childcare shortages, San Diego’s high cost of living not only impacts the region’s existing workforce, but also the pipeline of future talent.


"It is becoming more challenging to recruit talent from out of the San Diego region because San Diego is not an affordable place to live.  This is especially true in higher education where many competitors for talent are in low-cost college towns," said Thom Harpole, human resources director, San Diego State University. "Salary and benefits packages alone are not adequate to address the problem.  Affordability in San Diego must be addressed to ensure the health of our communities and the success of our organizations in delivering on their missions."


If the region’s housing, transportation, and childcare costs continue to rise at this rate, San Diego will no longer be an attractive place to live or work. To address this affordability crisis, the Inclusive Growth Steering Committee has endorsed a regional goal of creating 75,000 newly thriving households by 2030. To meet this new regional goal, San Diego must increase the proportion of households that can afford the region’s true cost of living from 47 percent to 55 percent. This means more housing, more transportation options, and more childcare. It also means growing household incomes through the local development of skilled workers and creation of more quality jobs.


"San Diego's cost of living significantly impacts our ability to attract and retain talent from other destinations," said Clifford “Rip” Rippetoe, president and CEO, San Diego Convention Center Corporation. "We need to be creative to compete.  We work to make sure that all of our employees have the opportunity to thrive in San Diego.”


The Inclusive Growth Steering Committee has recommended that employers support the regional goal through the following actions:
1. Transparency – understand the impacts that lack of affordability has on existing workforce and talent pipeline.
2. Engagement – participate in public policy dialogue around infrastructure development to address the region’s affordability challenges.
3. Investment – invest in programs and projects that help ameliorate cost of living pressures on workforce.

Employers that have officially endorsed this goal and recommendations include San Diego State University, San Diego Convention Center, Booz Allen Hamilton, Cox Communications, Northrop Grumman, and more. For a complete list of employers committed to this effort, visit the new interactive web study.

If you are an employer interested in joining this effort, please contact bl@sandiegobusiness.org.

EDC’S INCLUSIVE GROWTH INITIATIVE
In 2018, EDC launched a data-driven, employer-led initiative focused on promoting inclusive growth as an economic imperative. Together with its Inclusive Growth Steering Committee, EDC has set collaborative regional goals, endorsed actionable recommendations for accomplishing them, and will continue to monitor its regional progress towards building a strong local talent pipeline, equipping small businesses to compete, and addressing San Diego’s affordability crisis.

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

View the full interactive web study release: Addressing San Diego’s Affordability Crisis.
 

September 12, 2019

 

In an effort to provide residents with increased access to high-demand jobs, San Diego Regional EDC launched Advancing San Diego, a $3 million local investment initiative underwritten by JPMorgan Chase that will align industries with economic development, workforce development and education systems.

“Talented and skilled workers are integral for a strong economy,” said Mark Cafferty, president & CEO at San Diego Regional EDC. “With and through our program partners and stakeholders, we are establishing a first-of-its-kind, employer-led initiative that will measure and aggregate workforce needs while also indentifying solutions that align and strengthen our local education systems. We need to ensure that the benefits of our region’s growing innovation economy are reaching all San Diegans.

Advancing San Diego will establish nine working groups that are designed to give employers a collective voice about talent needs in priority industries, ranging from software and technology to marketing, healthcare and more. In the first report, 17 participating employers expressed a projected need for more than 7,200 additional software-related positions over the next three years.

The Advancing San Diego initiative
In April 2019, San Diego was one of five cities to receive a $3 million investment as part of JPMorgan Chase’s AdvancingCities Challenge, an initiative to drive inclusive growth and create greater economic opportunity across the U.S. Advancing San Diego is a collaborative program by San Diego Regional Economic Development Corporation, the City of San Diego, San Diego Workforce Partnership, United Way of San Diego, and San Diego & Imperial Counties Community College Association (SDICCCA).

As San Diego’s economy continues to expand, employers are seeing an increased demand for skilled workers. While San Diego strives to attract and retain talent, it must also look inward to build a workforce that meets demands for current and future jobs. EDC and its Inclusive Growth Steering Committee of 40 employers have endorsed a regional goal to double the number of skilled workers produced in San Diego County to 20,000 per year by 2030. This requires strong, effective learning programs offered by community colleges and other education institutions.

The goals of Advancing San Diego are to:

  • Engage employers in a structured process to collectively communicate talent needs
  • Identify education programs that are aligned with industry needs
  • Increase the pool of diverse, skilled talent in San Diego
  • Expand access to talent pipelines for small companies

“By 2020, nearly two of every three jobs in the U.S. will require a credential or degree, and currently, 90 percent of our students remain in San Diego after graduation,” said Dr. Sunita "Sunny" Cooke, superintendent & president at MiraCosta Community College District. “Community colleges play a critical role in creating a diverse talent pipeline for the region. The Advancing San Diego program willhelp connect the work occurring within local community colleges to ensure we offer innovative curricula that support employer needs and include opportunities for students to apply their learning in workplace settings so graduates are ready for employment.”

Education systems that are aligned with results set forth by the working groups will be listed as ‘preferred providers’ by Advancing San Diego. This designation rewards higher education students with priority access to work-based learning and engagement opportunities via networking events, career and internship fairs, and local company tours. To learn more and become a ‘preferred provider,’ educators are encouraged to apply at advancingSD.org.

Additionally, businesses with fewer than 100 employees make up 98 percent of San Diego firms, and on average, are challenged to compete with larger employer wages. As part of EDC’s inclusive growth strategy, more than 35 employers (and counting) have endorsed a regional goal to create 50,000 new quality jobs within small businesses by 2030. To further engage small businesses, nearly half of the funding for Advancing San Diego will be used to subsidize internships within small businesses and offer additional services that support student success in the workplace.

“Start-ups like LunaPBC are rich with mission, purpose, and the opportunity for personal and professional growth,” said Dawn Barry, co-founder & president at LunaPBC. “Unlike large employers, startups are often lower on salary, but offer exciting equity and the opportunity to experience first-hand what it’s like to build an enterprise. When large employers work together with smaller employers, and pursue partnerships with incubators and accelerators, higher education and regional development teams, we strengthen our collective visiblity as a region for career development.”

Report: Demand for Software Talent and Criteria for ‘Preferred Providers’
Working group members were asked to provide hiring projections along with skills and competency requirements for critical jobs, in order to identify programs that align with industry needs. Collectively, these results were compiled into the Demand for Software Talent Report and will create a criteria for ‘preferred providers’ of software – a designation by employers that demonstrates an education program is providing adequate training for software engineers.

Companies that contributed to this report represent industries with the highest proportion of software talent in San Diego, including tech, life sciences, healthcare and defense. Based on the participation of 17 employers who collectively employ approximately 53,000 people and share a need for software talent, this report indicates the working group is projected to hire more than 7,220 additional software professionals over three years.

Additional key findings include:

  • Software engineers accounted for the highest future hiring demand among all software occupations in working group companies, making up 53 percent of total projections
  • Entry-level software engineers represent the highest hiring need of any position at any level
  • Collectively, the working group projects they will hire more than 1,700 entry-level software engineers over the next three years
  • Approximately 44 percent of working group employers require a bachelors degree for entry-level software engineers

Through the Advancing San Diego collaboration, San Diego strives to cultivate a more inclusive economy, as this initiative will look inward to address regional talent shortages and strengthen the relationship between employers and education systems.

For more information about the new Advancing San Diego initiative, future working groups, or to be listed as a ‘preferred provider, visit advancingSD.org. Follow along and join the conversation at #advancingSD.

View the full interactive web report—“San Diego’s Demand for Software Talent Report”—here.

**Read the full press release here.**

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.

 

 

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 18, 2019

Today, JPMorgan Chase has announced that San Diego is one of five cities to win a $3 million grant from the AdvancingCities Challenge. Launched in 2018, the inaugural competition is a $500 million, five-year initiative to drive inclusive growth and create greater economic opportunity in cities across the United States. This grant will be used to fund a new collaborative program—Advancing San Diego.

“The Advancing San Diego program is going to be a game-changer and will provide resources to underserved communities that need it most,” said Mayor Kevin L. Faulconer. “It’s going to lift up our small businesses, prepare San Diegans for skilled jobs and make a real difference in people’s lives. It’s also going to level the playing field so that no matter where you grow up in San Diego, you have access to opportunity. I want to thank JPMorgan Chase for choosing San Diego, as well as the San Diego Regional EDC and all of the participating agencies who supported our proposal.”        

JPMorgan Chase received more than 250 applications from 143 communities. Among the four other winning cities in the U.S.—Chicago, IL; Louisville, KY; Miami, FL; and Syracuse, NY—San Diego was selected because its proposal successfully outlined local coalitions of elected, business, and nonprofit leaders who will work together to address major social and economic challenges such as employment barriers, financial insecurity, and neighborhood disinvestment.

Through Advancing San Diego, EDC and its partners will collectively work to double the production of skilled workers by 2030 and enhance relationships between local employers and the region’s education systems. The concept incorporates a demand-driven, employer-led strategy to both connect underrepresented residents with high-demand jobs, while also providing small business access to diverse talent applicants. More specifically, these efforts focus on elevating San Diego’s Hispanic population, who is projected to be San Diego’s largest demographic group by 2030. Currently, 84 percent of Hispanics do not hold a bachelor’s degree and are drastically underrepresented in the region’s innovation economy.

With unemployment rates at multiyear lows, companies need to compete for talent like never before. The good news is that our future talent poolthe engineers, scientists, data analystswill be homegrown,” said Janice Brown, Board Chair, San Diego Regional EDC. “EDC has embarked on Advancing San Diegoa collaborative effort between business, nonprofit, philanthropy and academia, aimed to increase degree and credential completions required for high demand jobs and support the small businesses that drive our economy forward.”

The San Diego of tomorrow is going to look very different than the San Diego of today. With the AdvancingCities Challenge, EDC is able to support its existing inclusive growth efforts, which aim to build a strong local talent pipeline, equip small businesses to compete, and address the affordability crisis. Together with San Diego Workforce Partnership, San Diego and Imperial Counties Community College Association (SDICCCA), United Way of San Diego County, and City of San Diego, San Diego Regional EDC is leading a region wide approach to sustain growth throughout San Diego County.

To learn more about AdvancingCities and the other AdvancingCities Challenge Winners, visit jpmorganchase.com/advancingcities.

Join us in Advancing San Diego. For more information about EDC’s inclusive growth efforts, visit sandiegobusiness.org/inclusivegrowth

*Read the full press release.*

April 9, 2019

In February 2019, EDC supported The San Diego Foundation’s annual convening to recognize the accomplishments of its 2018 Science and Technology program grantees. The San Diego Foundation supports efforts that encourage more students to pursue STEM careers and academic research, with the goal of strengthening our regional economy. Grantees have a demonstrated track record of engaging students in STEM fields, particularly among underrepresented populations. Eduardo Velasquez, research manager at EDC, participated in a panel alongside City of San Diego’s Deputy Operating Officer Erik Caldwell and Qualcomm’s Inclusion and Diversity Manager Carrie Sawyer for a discussion on the importance of building a strong local talent pipeline. 

The San Diego region is recognized as a tech hub, with some of the most innovative companies and world-class research universities. Yet, not all students have the opportunity to explore and pursue STEM-related fields that lead to high-paying jobs in the innovation economy. San Diego’s Hispanic population is statistically the least prepared to enter or complete a degree or credential, yet represents nearly half of the future local talent pool.

This demographic gap in educational attainment, combined with rapidly changing skill requirements and a nationwide battle for talent, is likely to lead to an increased shortage of skilled workers in our region. As a member of EDC’s Inclusive Growth Steering Committee, The San Diego Foundation’s convening directly supports the regional goal of producing 20,000 new skilled workers per year by 2030.

Learn more at talent.inclusivesd.org

January 24, 2019

As part of EDC's Inclusive Growth initiative, we're gathering best practices to help uncover unique approaches to inclusion that can be replicated or scaled locally - including actions from employers and regions outside of San Diego. We hope that sharing these best practices will help inspire San Diego companies/organizations to take on their own. Read The New York Times article below to learn how Microsoft is contributing to affordable housing in the Seattle area:

SEATTLE — The Seattle area, home to both Microsoft and Amazon, is a potent symbol of the affordable housing crisis that has followed the explosive growth of tech hubs. Now Microsoft, arguing that the industry has an interest and responsibility to help people left behind in communities transformed by the boom, is putting up $500 million to help address the problem.

Microsoft’s money represents the most ambitious effort by a tech company to directly address the inequality that has spread in areas where the industry is concentrated, particularly on the West Coast. It will fund construction for homes affordable not only to the company’s own non-tech workers, but also for teachers, firefighters and other middle- and low-income residents.

Microsoft’s move comes less than a year after Amazon successfully pushed to block a new tax in Seattle that would have made large businesses pay a per-employee tax to fund homeless services and the construction of affordable housing. The company said the tax created a disincentive to create jobs. Microsoft, which is based in nearby Redmond, Wash., and has few employees who work in the city, did not take a position on the tax.

The debate about the rapid growth of the tech industry and the inequality that often follows has spilled across the country, particularly as Amazon, with billions of taxpayer subsidies, announced plans to build major campuses in Long Island City, Queens, and Arlington, Va., that would employ a total of at least 50,000 people. In New York, elected officials and residents have raised concerns that Amazon has not made commitments to support affordable housing.

Microsoft has been at the vanguard of warning about the potential negative effects of technology, like privacy or the unintended consequences of artificial intelligence. Executives hope the housing efforts will spur other companies to follow its lead.

“We believe everybody has a role to play, and everybody needs to play their role,” said Brad Smith, Microsoft’s president and chief legal officer.

The company’s strong finances, a sign of its resurgence under Satya Nadella as chief executive, have given it resources to deploy, Mr. Smith said. In October, the company reported net income of $8.8 billion in its most recent quarter, up 34 percent, and it had almost $136 billion in cash and short-term investments on its balance sheet. The company’s stock has risen steadily under Mr. Nadella, and Microsoft is now valued at over $800 billion.

A number of other tech businesses have tried to address the homeless crisis. Amazon’s chief executive, Jeff Bezos, has supported homeless service providers through his personal foundation, and the Salesforce chief executive, Marc Benioff, helped fund a proposition in San Francisco to tax businesses to pay for homeless services. Voters approved the tax in November, rejecting opposition from some tech leaders, including Twitter’s chief executive, Jack Dorsey.

Others plan to build housing for their own employees. Such housing may help with demand, but it has also reinforced the impression that the companies are focused too closely on their own backyards.

“This is long-range thinking by a company that has been around for a long time, and plans to be around for a long time,” said Margaret O’Mara, a professor at the University of Washington who studies the history of tech companies.

Microsoft began researching the region’s housing last summer, after the nasty tax fight in Seattle and around a peak of the housing market. The company analyzed data and hired a consultant to decide how to focus its work. The area’s home prices have almost doubled in the past eight years, and Mr. Smith said he learned that “the region has counterintuitively done less to build middle-income housing than low-income housing, especially in the suburbs.”

That squeeze hits a range of workers. “Of course, we have lots of software engineers, but the reality is that a lot of people work for Microsoft. Cafeteria workers, shuttle drivers,” Mr. Nadella said this week at a meeting with editors at the company’s headquarters. “It is a supply problem, a market failure.”

Microsoft plans to lend $225 million at subsidized rates to preserve and build middle-income housing in six cities near its Redmond headquarters. It will put an additional $250 million into low-income housing across the region. Some of those loans may be made through the federal programs that provide tax breaks for low-income housing.

The company plans to invest the money within three years, and expects most of it to go to Seattle’s suburbs.

The loans could go to private or nonprofit developers, or to governmental groups like the King County Housing Authority. As the loans are repaid, Mr. Smith said, Microsoft plans to lend the money out again to support additional projects.

The remaining $25 million will be grants to local organizations that work with the homeless, including legal aid for people fighting eviction. The Seattle Times reported Wednesday that if the $500 million were put into one project, it would create only about 1,000 units, so instead Microsoft will most likely put smaller amounts in many projects to help build “tens of thousands of units.”

The initial reaction to the company’s announcement was positive.

“There is almost no level of housing that isn’t direly needed,” said Claudia Balducci, a member of the King County Council who helps lead the Regional Affordable Housing Task Force.

report in December by the task force said that the region needs 156,000 more affordable housing units, and will need 88,000 more units by 2040 to accommodate future growth.

A growing body of research has tied the lack of affordable housing to increasing homelessness. A December study from the real estate website Zillow said that was particularly true when households pay more than a third of their income in rent. The New York, Boston, Los Angeles, San Francisco and Seattle regions — the country’s largest tech hubs — have all already crossed that threshold.

“The idea that you can live in your bubble and put your fingers in your ears just doesn’t work anymore,” said Steve Schwartz, head of public affairs at Tableau Software, which is based in Seattle.

Amazon in recent years has worked closely with Mary’s Place, a homeless shelter for women and children in Seattle, and is integrating a shelter for about 65 families into one of its new buildings. Amazon has paid tens of millions of dollars to the city’s affordable housing trust fund as fees to build in the core of Seattle.

Amazon declined to comment.

Google supported the City of Mountain View’s plan to add 10,000 housing units in an area it’s developing, with 20 percent designated for lower-income residents. And Facebook has planned to build 1,500 apartments near its Menlo Park headquarters, with 15 percent to be affordable.

Microsoft has begun a major overhaul of its main campus in Redmond, committing billions of dollars in renovations and connecting it to a light rail station under construction. The company helped finance a successful campaign for voters to approve more property taxes to pay for transportation. This new investment in housing takes its commitments a step further.

“This is where Microsoft is going to be, and the region needs to work,” Ms. Balducci said. “I don’t think this is wholly altruism.”

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 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.