San Diego is home to the largest concentration of military assets in the world and the largest federal military workforce in the country. On a local scale, about 20% of San Diego’s gross regional product (GRP) is the result of defense-related spending – that’s $50 billion. The industry is key to the region’s talent and innovation, economy, and role in the nation’s security interests.
Congress recently passed a two-year budget bill that boosts defense spending $165 billion over the next two years, assuaging any doubts about defense spending uncertainty. Last year’s defense spending of $634 billion will grow to $700 billion this year and $716 billion next year. In March, San Diego was awarded a $1.6 million grant from the Department of Defense’s Office of Economic Adjustment to support the resiliency and growth of local defense contractors.
Shipbuilding and satellites are primary areas of work as well as emerging industries like unmanned systems and cybersecurity that are burgeoning in San Diego and are expanding into international markets.
In an unsurprisingly growing industry – one in which local colleges and universities are trying to keep up with workforce demand – cybersecurity accounts for more than 7,600 cyber jobs in San Diego that generate $1.9 billion in economic impact, according to the San Diego Cyber Center of Excellence (CCOE). The center promotes efforts to position San Diego as a global hub of cybersecurity innovation. In April, along with the San Diego Regional Economic Development Corporation (EDC), it hosted a tour of local tech companies for Dr. John Zangardi, the Department of Homeland Security Chief Information Officer whose office is leading the trip.
The companies included in the tour were Qualcomm, AttackIQ, MindTouch, Brain Corp, Ausgar Technologies, Unisys, FICO, Webroot and Illumina. CCOE said the tour “highlights the importance of collaboration between the public, private, academic, government and military sectors to foster greater cybersecurity.”
The other quickly expanding industry – and one in which collaboration has also proved important – is the unmanned systems industry. It’s an industry in which San Diego is poised to become a vital player. Two of the largest military unmanned aerial vehicle (UAV) manufacturers, Northrop Grumman and General Atomics, are located here. Furthermore in May, San Diego was among 10 agencies in the country chosen to partner in the U.S. Department of Transportation’s “Unmanned Aircraft Systems Integration Pilot Program” – a program aimed at accelerating the development of drone technology.
Emerging opportunities in the commercial drone market have also been seen in the region since 2015 when the Federal Aviation Administration (FAA) loosened restrictions on companies’ drone use. Between 2016 and 2021, the FAA expects more than a tenfold increase in the nationwide commercial drone fleet and a 1,000-2,000 percent increase in number of drone pilots. It also projects $82 billion national economic growth due to the industry by 2025.