Will San Diego’s Increasing Exports Lead to New Employment Opportunities?

San Diego’s economy is picking up speed in ways that may lead to greater employment opportunities. According to the U.S. Department of Commerce, San Diego realized $18.6 billion worth of goods which is a substantial increase of over $700 million from 2013 (1). Should the city expect increasing employment opportunities in the near future?

The majority of exports was in computers and electronics, transportation, machinery, plastics and rubber, metal, and processed food. In these sectors greater sales often lead to greater profits and expansion of buyer networks that often leads to production expansion for companies. 

Corporations expand production to sell more items while seeking to increase their returns from economies of scale. Expanded production sometimes leads to more efficient operations which in turn impacts profit margins. Profit margins stoke the fire of expansion as firms have healthy returns and seek to maximize those returns through additional investments. 

It is those investments in capacity that eventually leads to increasing employment.  Highly skilled and educated employees are likely to find higher wages than employees that have not learned market relevant skills. 

The economic system relies on exports and sales. Only through pro-growth strategies that encourage alignment of the local hubs to international needs can long-term employment stability be found. When market adjustment doesn’t happen, or employment is artificially inflated through excessive legislation, there will be long-term economic consequences.

San Diego should expect increasing employment opportunities in those sectors that have long-term relationships/contracts with international companies and fit within current growing market trends. A boom in growth in 2014 often results in increased hiring in 2015. There are many other factors that can impact this but if the invisible free market hand takes precedence we should see new hiring.

San Diego Becomes gets Exposure as “Smart” City in National Geographic Documentary

San Diego is being filmed as one of the “World’s Smart Cities” creating international buzz for innovation, craft beers, coastline, parks, and management. The program will be aired internationally on the National Geographic Channel and raises public awareness of the benefits to live, work and invest in San Diego. 

Modern cities are known for their local industries and lifestyles. For example Seattle and coffee, Detroit and cars, and Cancun and vacation are tied together in consumer minds. Once these associations become embedded they will influence consumer impressions in a way that leads to choices and in turn greater economic activity. 

Documentaries not only help solidify those images but also raise awareness of other local industries. San Diego may have great beaches but it also has a budding bio-technology industry that would benefit from greater international exposure. That exposure can lead to greater awareness of local investment opportunities.

San Diego draws mental associations of beaches, military bases, and palm trees but it has much more to offer.  A documentary on the advanced scientific industries in the area, craft beers, and parks adds to that image and creates new information for people to recall when they think about the city.

Consider a person in Europe watching the program that knows little about San Diego but is planning on adding a new investment to their portfolio. After watching documentary on the city and learning about the rapidly growing scientific community they decide to explore promising investment opportunities. 

The same can be said for viewers in Brazil who may be planning their next family vacation. After seeing the images of parks, beaches, craft beers, and restaurants they may just opt make San Diego their next vacation destination. A single thought or feeling stemming from the images leads to purchasing behavior.

Documentaries such as this are only the tip of the iceberg. Once viewing the program people will search out information related to their interests. Typing “San Diego” into Google recalls pages on travel, city government, parks, and hotels. A similar search on “San Diego Investment Opportunities” draws a Hodge Podge of real estate unrelated websites leaving potential investors confused.

Capitalizing on new exposure opportunities requires the ability of people to find the information they need to make decisions that are beneficial to the city. Encouraging greater search engine ranking of San Diego opportunities will rely on public conversation in the form of video, text, websites, music, etc… that draw more visitors and rank higher in search engine rankings. 

As public awareness about the city grows it takes on a form of marketing that can lead not only to additional tourism but also to more investment capital. This all spells growth for the city as that money makes its way into the local hotels, restaurants, start-up businesses, and existing industry clusters. Promoting San Diego promotes our economic opportunities. Getting in the conversation can make all the difference.

Documentary: The Worlds Smart Cities. 8PM, April 25^th, May 2^nd, National Geographic Channel

San Diego Employment Numbers Trip But Could Regain Footing from High Technology Firms

2014 wasn't a great year for job creation in San Diego as employment numbers left much to be desired. According to the Employment Development Department 30,208 jobs were added to the San Diego economy in 2014 missing economist projections (1). Despite slower than expected growth in construction, professional, health, and scientific jobs the service industry added the most jobs with a 4.86% increase. Employment rates may be on the rise if San Diego focuses closely on high growth industries that already have a solid present in the area.

The numbers are not dismal and could indicate a upward swing for 2015. Service jobs are relatively easy to add and mark a level of rising consumer spending on travel, restaurants, and leisure services that mark optimism. These are some of the first jobs added to the economy before higher paying jobs also make their way onto the market.

Higher paying employment comes after lower skilled service jobs have made their initial appearance. Industries that have higher paying positions add significantly to income and wages in the area but take a little longer to kick in. Companies making larger investments in skill, recruitment, relocation, compensation and salary only add jobs when needed.

There has been a healthy discussion of encouraging technology firms in San Diego. This discussion, in addition to other high growth fields, helps in improving the future labor market by aligning the economy to industries in demand. For example, small business accounts for 2/3 rds of job creation and high growth firms 35% of job gains during the years 2009-2012 (Clayton, et. al. 2013).

Technology industries are in hot demand around the world and gaining high levels of investment. Companies that are in the high technology sectors of pharmaceutical, chemical, communication, navigation, agricultural equipment, science, etc... find themselves growing faster than many other companies. Their abilities to obtain new resources, based on market demand, pushes them forward.

San Diego has a  solid high technology based that can be used to create stronger platforms for growth. Cities that put in place policies that encourage the development and investment in growth industries often magnify growth in these sectors (Jenkins, et. al., 2006). The policies should help funnel international investment into industries that are currently, or will soon be, in high demand globally.

Encouraging those industries that are likely to provide the highest paying jobs and greatest amount of overall economic growth is smart government. It provides an opportunity to employee more people and raise the standard of living for a lot of people. Likewise, investors want a return on capital and high growth industries offer that opportunity. Making sure legislative hurdles are lowered and letting the world know of the local investment offerings in San Diego can make a huge difference in industries that are ready to break out onto the international market.

Clayton, et. al. (2013). High-employment-growth firms: defining and counting them. Monthly Labor Review, 136 (6).

Jenkins, et. al. (2006). Do high technology policies work? High technology industry employment growth in U.S. Metropolitan Areas, 1988-1998. Social Forces, 85 (1). 

Downtown Partnership Fosters San Diego Business Growth

The Downtown San Diego Partnership elected a new board of directors to help manage and foster future business growth.  The partnership is designed to brand, revitalize, and create economic growth for the city. Keeping San Diego’s downtown developing and adapting helps raise the economic stature of the city through collaborative effort that improves the business attractiveness of the city.

It is beneficial to understand what a Business Improvement District is (BID). BID’s levy additional taxes on businesses within the district and use that money to improve the management of the area. It is like having an additional service on top of existing governmental services. Businesses willingly pay the extra cost because they can create collective benefits that they wouldn’t be able to do on their own. 

BIDs create additional value for these businesses by creating better environments. For example, in North Carolina a survey found that local business owners thought highly of the BIDs ability to raise retail and property values (Ha & Grunwell, 2014). Sharing marketing resources and keeping the area consumer friendly helps all members of the community. 

Businesses that work in collaboration with each other find ways of improving their business models. BIDs offer an opportunity for downtown businesses to develop their brand image and improve on their innovative abilities (Byrne, 2014). As these businesses begin to develop and grow that revenue can be used to strengthen the competitive nature of San Diego’s downtown area. 

Opening a business in the downtown area has obvious benefits for customer attraction and business connections. You might want to check out the benefits of membership. A younger generation of talent and shoppers are attracted to metro areas that offer them a number of shopping amenities in a small area. Developing stronger downtown business management that keeps the area clean, safe, and attractive has positive benefits for the quality of life and economic sustainability of the area. 

http://www.downtownsandiego.org/ 

Byrne, K. (2014). Hubs of Innovation. Site Selection, 59 (4). 

Ha, I. & Grunwell, S. (2014). Estimating the economic benefits a business improvement district would provide for a downtown central business district. Journal of Economic & Economic Education Research, 15 (3).