USD Magazine, Spring 1993

pate an upturn in the next few years. For a long-term turnaround, San Diego County needs to concentrate on at least two of its three main means of freight traffic-the airport, railway system or port. "It looks pretty difficult for the San Diego economy in the future," Gin says. "Through 1994 and beyond, I just don' t see what's going to pull the city through these economic hard times. San Diego has some unique problems. We don't have a good transportation infrastructure. The airport is a problem. The port facilities haven't been expanded like they could have been. And the rail lines here all run north. So the ships that might consider coming to San Diego go to West Central Los Angeles instead. There are not a lot of manufacturing plants around here, and there's not likely to be-manufacturers like to locate around places with good transportation." Already, San Diego's biotechnology industry, one of the county's manufacturing bright spots, is clamoring for improve– ments in the airport because the industry needs an airport large

Tokyo-and a healthy 21 percent of what is made here, is exported. But growth has brought congestion, and the city rates poorly on vocational training programs and pro-business atti– tude. Manufacturing has been growing faster than the U.S. aver– age, with biotechnology, electronics and telecommunications among competitive local industries. San Diego's Golden Trian– gle, where the major industries are biotechnology and commu– nications, has 164 companies with 11,000 jobs. The number of jobs could grow to 50,000 in the next seven years, thanks to a Nov. 30 announcement by then Mayor-elect Susan Golding, who said she will consider using the city's ability to sell bonds to help finance the construction of biotechnology manufactur– ing facilities unable to secure other financing. The companies then would repay the funds . Golding announced other financial incentives that experts agree are needed to lure business to California, such as streamlining the permit process for biotechnology manufacturers and guaranteeing them a water supply in the event of water

enough to handle the shipment of its products. There is not going to be a big turn upward in the San Diego economy until something is done about the airport, Gin predicts. Unless there are improvements in the transportation infrastructure, San Diego will not see any gains and is likely to be hurt by NAFTA.

rationing during droughts . Several biotechnology man– ufacturers have said water guarantees are essential for them to commit to Southern California as a manufacturing site. Biotechnology and other

"Companies wanting to locate to this area would want to supply their products to northern Mexi–

co, but Mexico's Rodriguez Field is expanding and they are deepening the port at Ensena– da. So why would they come here?" Gin asks.

small industries may be San Diego's answer to the scramble to find a replacement for General Dynamics, says Linda Scales, director of the Office of Career Services at USO. But San Diego is at a competitive disadvantage. High land and housing costs mean employers have to pay their workers more. The state budget crisis means the area can't compete with states like Arizona, which has put together attractive packages to lure

Once the airport is developed, San Diego could become a more attractive location for commercial development, but either a rail– way or port expansion would have to follow, Gin says, adding that even if the bicker– ing factions debating the site of a new airport or expan- sion of the old one decided tomorrow on the best option, it would take at least a decade to get the plans implemented. Another unique nature of San Diego's economy is its lack of diversity. The county is heavily defense-oriented, and military cuts have so wounded the area's economy-with more cuts rumored to come under President Bill Clinton's defense plans-that even though economic recovery appears to be beginning for the rest of the country, San Diego is likely to be left behind. "In other cities, you might have the local economy start to return as the economy starts to recover," Gin explains. "In Detroit, they might lay off workers at the automotive plants, but they rehire them as soon as the country starts to come out of the recession. But as the national economy starts its recov– ery, people aren't suddenly going to be buying more Hughes Aircraft missiles." There are some bright spots in the gray economic forecast for San Diego. The city is well situated to trade with Mexico and Asia-it has economic development offices in Tijuana and

business there. Southern California is having a problem trying to retain businesses, much less attract new ones to an area where community services are being cut. "What has happened, because of trouble at the state level, is that the state has not been able to send as much money to the local level and that has forced the cities to cut their budgets," Gin says. "That is why you are seeing reduced library hours, and why the City of San Diego is not hiring police officers." The California state school system-once a nationwide model that served as a magnet to draw business into the state-may now be a deterrent. Even before the most recent budget cuts, California, which once had the top-rated public school system in the country, had

1 :.

U S D

M A G A Z I N E