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 Desalination Plant as a Stepping Stone to a Greener City

The Carlsbad Desalination Project is well on its way to production and it is geared to be a solid contributing factor to San Diego as an ecologically green city. A serious drought has taken the state by storm and a new water source that provides the needs of 300,000 San Diegans is an important step in the right direction of revamping the city for the next generation.

To be certain the desalination comes with a heavy $1 billion dollar price tag that will take some time to pay off. However, it does provide a significant reduction in water consumption for the city somewhere in the 9% range. This means San Diego has a water sources that shaves off another 10% of water usage on top of water conservation efforts.

Considering that it is unlikely that the city will find an untapped source of natural water soon such plants make sense in today’s world. San Diego will stand out as one of the cities in the future that can not only provides water but also contributes to the development of more eco-friendly cities that leave less damaging footprint on the environment.

I believe this to be an important selling point for the city. As local government and stakeholders think about long-term plans they can capitalize on the areas natural beauty, background and resources by engaging in environmentally friendly changes. We can see the tip of the ice berg with new bike lanes. The possibilities are great for other projects.

Someday San Diego may produce another desalination plant. The ocean is plentiful and can potentially provide higher percentages of water as technology improves to reduce household and construction costs that are prohibitive in other communities. Perhaps someday we may be choosing to build another desalination plant if the Chargers decide to move to the scorched earth just to the North.  
What is the economic contribution of a green city?

Innovation in San Diego Creates Investment Opportunities

2014 has come and gone, but the benefits of a growth year are likely to carry on for some time in San Diego. According to Connect, a non-profit group that supports innovation, they counted 446 technology and life science start-ups in 2014 up from 426 companies in 2013 (1). Of these firms, Bio-tech got 62% of the $805 million investment capital dollars while software and medical devices got a third and fourth place in total investment influx.

What does this say about San Diego? It says that San Diego has a budding bio-tech and software industry that should be supported by city policies, higher education, corporate training, and international promotion. Encouraging investment funds to find receptive companies seeking those investments for expansions puts money where it has the quickest and most efficient economic contribution.

The Economic contribution comes from using the investment money to expand operations, hire new people, and create additional contractual deals that grow not only the parent business but also smaller suppliers. Money invested into one company makes its way to other firms and the overall tax base of the city.

It is important for decision makers to look at their growing industries and find a connection between what their local competencies and resources offer to determine places to generate higher levels of investment growth. Making sure that the public is aware of these investments through various mediums that reach motivated investment entities helps in speeding up this growth process.

Economic expansion comes with the development of better city policies that further the growth of the area and better capitalizes on its local resources. Biotechnology and technology have significant international interest and is a field that is expected to grow in the future. Local military stakeholders may strengthen this industry, but the global market will determine the innovative value of its outputs. Getting companies and government to focus in the same area can mean higher levels of synergy.

San Diego Attracts Investment Capital. Could more be Done?

Investment is the lifeblood of our economy that provides nourishment for our cities. Without investment we don’t grow, business doesn’t expand and people don’t get hired. Everything comes to a standstill and in and good fortune ceases. Cities like Los Angeles, San Francisco and San Diego are attracting investments to their unique industry clusters.  Letting the world know what San Diego has to offer in terms of investment opportunities can be a catalyst to greater growth.

Nationally, the last quarter experienced $13.4 billion dollars in investments and about a third of that took place in San Francisco, Los Angeles and Orange County (as cited in Somerville, 2015).  According to the Venture Capital Association and Price WaterhousCoopers a total of 19 San Diego companies received around $270 in late stage venture capital funds (Money Tree, 2015). Not the largest share but certainly a sizable one.

Much of the money comes from large institutional investors that are looking for solid growth opportunities. Of these large investment opportunities around 36% were from hedge funds and mutual funds (As cited in Somerville, 2015).  There is still plenty of room to draw new investments from international investors that are also seeking high probably income outcomes. 

Companies invest in late stage start-ups because they can reduce their risks. Another option is to invest in a basket of companies to hedge the potential of loss on any one entity. The problem is that without knowledge of local investment opportunities investors are unlikely to fulfill to help businesses reach their full potential.  

Ensuring that emerging companies are easy to find and the proper mechanisms for investment are available will help further international investment in San Diego. Ensuring information is on public display via websites, is easily accessible from outsiders and targeted to both small and large investment entities helps to keep new industries budding and growing in a way that encourages local economic development.  

 

Freeman, M. (April 17th, 2015). San Diego start-ups net more venture capital. UT San Diego. http://www.utsandiego.com/news/2015/apr/17/MoneyTree-Dow-Jones-VentureSource-ATyr-pharma/

Somerville, H. (2013). Tech companies continue to land mega VC deals. San Jose Mercury News. Retrieved http://www.mercurynews.com/business/ci_27932457/tech-companies-continue-land-mega-vc-deals

The Money Tree. Retrieved April 18th, 2015 from https://www.pwcmoneytree.com/

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