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Region lags on foreign-backed jobs

The number of San Diegans employed by foreign-owned firms nearly doubled over the past 20 years, rising from 25,600 in 1991 to 48,730 in 2011, said a report released Friday by the Brookings Institution and JP Morgan Chase Bank.

But those workers still account for 4.8 percent of private-sector employment in San Diego County, putting it in 48th place among the nation's top 100 metro areas and 23rd place for its overall number of workers.

"Foreign direct investment (FDI) matters because the U.S. operations of foreign firms contribute inordinately to the economy," the report said. "While accounting for only 5 percent of private sector employment (nationwide), FDI accounts for 6.7 percent of total compensation, 12 percent of productivity growth, 15.2 percent of capital investment and 18.9 percent of corporate research and development."

Not all foreign-owned companies are high-paying centers of R&D investment.

The largest driver of foreign-backed employment nationwide — and the second-largest in San Diego — is in food chains, including the German-owned Trader Joe's and the Dutch-owned Stop-and-Shop convenience stores. Foreign-owned food chains employ 288,000 people nationwide, including 3,000 in San Diego.

But other local foreign employment is more tech-oriented, with foreign-owned precision instrument companies employing 9,700 workers; semiconductors, 2,500; communications equipment, 2,400; and pharmaceuticals, 1,600.

Britain is the biggest foreign employer in San Diego, with 11,900 workers, including more than 1,500 at the shipyards owned by British defense manufacturer BAE Systems, whose other local operations include a center for geospatial intelligence systems in Rancho Bernardo.

Japan is the second-largest foreign employer with 8,700 workers, led by Sony Electronics. Several large Japanese firms have long had back-office operations in San Diego for their manufacturing plants in Tijuana, but the Japanese have also been acquiring local firms, such as Hydranautics in Oceanside and Althea Technologies in Sorrento Valley.

"It's no coincidence that our top two FDI-generating cities, Tokyo and London, are also the two direct international flights out of San Diego," said Mark Cafferty, president and CEO of the San Diego Regional Economic Development Corp., who has been working closely with the Brookings Institution on ways of drawing more foreign investment to the region.

But San Diego lacks direct air access to several other investment centers in the world, such as China, which has recently been engaged in a wave of foreign investment.

A study by the UCLA Anderson Forecast release last week says that China has been targeting most of its investments in the West Coast cities of San Francisco, Los Angeles and Seattle — partly because of their direct flight links across the Pacific.

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San Diego Regional Economic Development Corp.

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530 B St. Ste., 700
sa, CA 92101

San Diego Regional Economic Development Corp. Executive(s):

Mark Cafferty

  • Executive Director

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