How Does San Diego's Economy Differ?

This is second part of a series of questions about San Diego’s economy we’re asking economic leaders who will be a part of the 2010 Workforce Summit. Part one, posted yesterday, asked the question, “What have we been doing wrong?“

The second question:

Where does San Diego differ — or where can it differ — from the rest of California or from the rest of the United States? What strengths or weaknesses are particular to us?

Mark Cafferty, president and chief executive officer, San Diego Workforce Partnership:

In terms of our economy and our work force, San Diego differs from the rest of the state and country in many ways. Some aspects of our economy exploit our strengths, while other aspects present challenges that must be addressed. In the areas of job training and workforce development, I still feel that the strengths outweigh the weaknesses.

San Diego has a diverse base of industry clusters. Unlike other regions, our economy is not driven by any one company or sector. San Diego is also home to one of the nation’s most highly educated populations, with a large number of colleges and universities spread across the county to train and retrain our workforce. These characteristics would seem to highlight strong economic conditions.

However, the recession has exposed two key weaknesses.

First, too many jobs in San Diego were tied to the now-devastated housing market. The unemployment rate among those employees working in real estate and residential construction is almost 50% higher than the full unemployment rate.

Second, too many of San Diego’s lower-wage earners lack the basic skills needed to take advantage of the available education and training opportunities, and they are struggling to maintain in a fragile labor market.

Cecilia Estolano, chief strategist of Green for All:

One of San Diego’s greatest strengths is its ability to bring together government, business and academic institutions around cutting-edge industries. We’ve seen this many times before — from its role as a leader in the biotechnology and information technology industries, to its emerging status as a cleantech leader.

In particular, the EDGE initiative is a national model of how to introduce workforce development into a growing sector in a strategic manner. Its work has the potential not only to accelerate the development of a viable biofuels industry, but also to make sure that industry is inclusive, adaptive, and provides opportunities to historically disadvantaged communities.

San Diego is also nimble in its ability to adapt. Just now, we’re seeing it take the next step in its cleantech industry by linking its high tech sectors to the economic needs of its most vulnerable communities. It’s one of the first cities to think strategically about its industrial policy, and I expect this choice to yield high dividends as clean technology becomes increasingly viable.

Len Hering, vice president for business services and administration, University of San Diego:

I think San Diego has some unique features that can set it aside from the rest of the state.

First is the tremendous military presence which has for years been understated and, in some circles, totally minimized. Truth is, more Department of Defense dollars are spent here in San Diego County than any other county in the entire United States.

During my previous assignment I found it increasingly more difficult to get anything which involved expanding operations done in a cost-effective manner and in a reasonable timeframe.

Second is its tremendously diverse economy, as well as our proximity to the border. We talk about it but little is done to make things really work to our advantage.

Mohit Kaushal, executive vice president, West Wireless Health Institute:

Why is San Diego positioned to become the global center of health care innovation?

Just as Houston and Cape Canaveral are synonymous with space exploration, San Diego is quickly becoming synonymous with health care innovation. With breakthroughs and discoveries dating back to the early days of the Salk Institute, our thriving research community continues to cross new frontiers, attracting pioneers such as Gary and Mary West and J. Craig Venter and global events like TEDMED.

San Diego is a leading center of:

wireless and electronics companies (more than 300)
life sciences, including biotech, genomics and medical device companies (more than 600)
private medical research organizations (more than 50)
world-class universities (three)

In addition:

Approximately 100 wireless health care startup companies are based in the San Diego region.
The Torrey Pines Research Mesa is home to more than 25 nonprofit research organizations, a variety of incubators, and organizations dedicated to driving health care innovation in San Diego, including the West Wireless Health Institute.
In March 2009, the Gary and Mary West Foundation founded WWHI, and has since committed nearly $100 million to the world’s first independent, nonprofit medical research organization focused on lowering health care costs through the convergence of health care and wireless technology.

Mary Walshok, associate vice chancellor of extended studies and public programs, University of California, San Diego:

San Diego is an innovative region because it never had the luxury of relying on any one traditional industrial or economic sector.

Despite the importance of the military and defense contracting, San Diego has a long tradition of searching for new economic opportunities to develop a diversified economy. The region has excelled at growing R&D, commercializing the results of research and supporting start-up companies in order to diversify our economy.

Simultaneous with that, San Diego has adapted its education and training systems so that we can create a qualified workforce to work in CDMA technologies needed by companies such as Qualcomm. It also conducts clinical research, trials and biotech manufacturing, all of which are essential to the life sciences. We look to the future as we think about emerging economic horizons and job opportunities.

This capability is tied to the fact that San Diego in many ways missed out being a major city during the industrial era. Instead, the San Diego economy is characterized by small family businesses that must endure inevitable boom and bust cycles. This has built a culture that fosters entrepreneurial experimentation, a history which has served San Diego well in this new era of globalization and rapid changing technology.

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The San Diego Workforce Partnership Workforce Summit takes place at the Irwin M. Jacobs Qualcomm Hall on Thursday, November 18, from 8 a.m. to 11 a.m. A breakfast will be followed by a keynote address by Robert Reich, former United States Secretary of Labor and current professor of public policy at the University of California at Berkeley.

Edited by Grant Barrett, engagement editor for voiceofsandiego.org. Drop him a line at grant@voiceofsandiego.org, call him at (619) 550-5666, and follow him on Twitter @grantbarrett.