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Date: 2016-08-12

San Diego looks within for the key to economic growth - “All hands on the beaches”

Last year, the Brookings Institution, a Washington, D.C. think tank, reported that the San Diego metropolitan area wasn’t measuring up when it came to exports. The proof offered is that the region is the nation’s 17th largest, but ranks 55th in exports as a share of the metro area’s gross domestic product.

No city worth its salty margaritas, even one as laid back as sun-washed San Diego, wants to be in 55th place when it comes to generating wealth. Appalled by the ranking, nearly 20 business organizations are using that report to build a collaborative effort to help the region improve exports and give a needed boost to the economy.

The organizations, including nonprofits such as the San Diego Regional Economic Development Corp., and public agencies like the San Diego County Regional Airport Authority, and Port of San Diego released the Global San Diego Export Plan. It provides a framework for increasing exports through education, outreach, and improvements to the area’s infrastructure.

Brookings says half of the nation’s economic growth in the first year after the Great Recession came through exports. But while manufacturing employment rose in the nation in 2013, the sector, which pays good wages, declined locally by 1,600 workers last year to 91,800 people, state data shows. There are 2,600 manufacturing companies in the area, 99 percent of them small or midsize, the report says.

“You can’t make a lot of international flights out of here and air cargo is a big source,” said Alan Gin, economist at the University of San Diego, not involved with the report. “The Port can do some stuff but it’s not nearly at the capacity that you’d see in L.A. and the (San Francisco) Bay Area, and one of the reasons causing that problem is the lack of rail connections.”

Despite size limitations, the airport has attracted a direct British Airways flight to London and a Japan Airlines to Tokyo, which inject millions of dollars into the economy, and a goal could be to add more such flights to other designations.  The airport is an airy light-filled jewel in a setting of intriguing Mexican art.  This is a marked contrast from the shabby sprawl of LAX a couple of hours drive up the coast.

San Diego’s plan will take several years to complete, and requires initial funding. The document outlines four ways to get San Diego’s exports improving:

• Take advantage of San Diego’s biggest industries: military, tourism and technological innovation. More than 30 million people visit San Diego annually, and services to people from other countries is considered an export; San Diego is also home to more than 60 percent of the ships in the U.S. Navy and more than a third of the combat power of the Marine Corps.

• Help small and midsize companies export through mentoring and financing programs.

• Improve the infrastructure by establishing a Regional Infrastructure Council, which would identify needs and secure funding for improvement projects. The report also says cyber infrastructure here is “woefully underdeveloped.”

• Take advantage of the CaliBaja binational mega region, and improve the “border fluidity.”  The report says that the region loses $1.3 billion in revenue, $2.8 billion in output and 28,000 jobs per year because of long wait times.

Carbs are out, the surf is up

Border issues are a national problem and will require a national solution, one that has so far proven elusive given a divided Congress with little attention span.  But border crossings are managed by federal agencies, which must approve changes to the current setup.  Certainly the local private sector, in partnership with private railways and other stakeholders, could offer to foot part of the bill, but the holdup seems about more than money.

Policy paralysis has not stopped folks on both sides of the border from accomplishing important things.  Economies are highly intertwined and likely to grow more so as factories in the Mexican zone at the end of a San Diego light rail line hum with new export orders using U.S. components.  There’s even talk of one day building a mega airport near Tijuana that could serve the entire region.

San Diegans are pumped up about their plans and the urge not to wait for others, especially bureaucrats in Sacramento or Washington, D.C. to determine their future.  Laser focus must, of course, give way to more leisurely pursuits in the balmy early spring afternoons when an ocean breeze suggests some roller blading, perhaps a turn on the surf board if the wave size is suitable, or a stop at what seems like one of 5000 micro-breweries.  Up the road in La Jolla at the University of California San Diego students discuss how to derive energy from sea water and what kinds of businesses they might start here beneath an impossibly blue sky.

Meanwhile, down the cliff near a colony of sea lions, an al fresco diner theatrically waves off a waiter offering bread and lemon-infused olive oil.  Carbs are out in this part of California.  55th place?  With fit folks like these, getting to 50th should be a piece of cake, or tofu scramble if you prefer.


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