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September 1, 2017

San Diego’s economic recovery since the Great Recession has been a story of resiliency, supported by a diverse set of economic contributors and driven by technological advances in the workforce.

During the Great Recession, the region’s unemployment rate climbed from 4.8 percent in December 2007 to all-time highs of 11.1 percent in January 2010 and again in July 2010. Once the recovery started, it remained steady—by September 2015, the unemployment rate had returned to pre-recession levels and has since continued to fall. The rate was 4.6 percent in September 2016 and is expected to continue this downward trend in September 2017 (once the labor force adjusts after the typical summer unemployment spike). Over the past 10 years, the San Diego unemployment rate remained consistently below California’s rate.

Part of this resiliency comes from a diversified economy. The five largest sectors each account for about one sixth of jobs in San Diego—a mix that has remained relatively steady from 2007 to 2017. Because San Diego’s economy is not overly dependent on any one sector, this reduces the impact of an economic event like the Great Recession from having an enormously adverse effect on the region’s labor force in any one sector.

While most of these traditional sectors suffered a decline in jobs during the recession, not all sectors were impacted with the same severity. Notably, Education & Health Services defied the recession altogether, adding 13,000 jobs to the region by the end of the recession in June 2009. The sector maintained an exclusively positive growth rate, outpacing every other sector. From December 2007 to July 2017, this sector has experienced 34.79 percent growth in jobs.

Despite its cyclical dips, Government also came out ahead at the end of the recession, with 1.28 percent net growth by June 2009—an addition of 2,900 jobs.

Of the remaining sectors, four have surpassed pre-recession employment:

  • Other Services (Repair and Maintenance, Personal and Laundry Services, and Religious, Grants, Civic, Professional and like organizations)
  • Leisure and Hospitality
  • Professional and Business Services
  • Manufacturing

Additionally, three are steadily recovering (Construction, Financial Activities, and Trade, Transportation and Utilities). Only Information—which includes publishing industries and broadcasting (except the internet), telecommunications, and software publishers—has continued to decline, showing no sign of recovery as media continues to shift to online platforms.

Much of this labor force recovery has been driven by technological developments in the workforce. A cross-industry trend toward data-driven decision making has created an opening for workers with data mining, manipulation and analysis, and data visualization skills, while the adoption of ever more sophisticated processes in manufacturing has led to growing demand for workers who can operate and repair advanced computerized machinery.

The San Diego Workforce Partnership (SDWP) focuses on five Priority Sectors, defined by industry clusters that show strong growth and opportunity for San Diego’s workforce. These five sectors—Advanced Manufacturing, Life Sciences, Clean Energy, Information and Communication Technologies (ICT) and Health Care—have embraced increasingly sophisticated technology and programming to improve efficiency and produce cutting edge products. Life Sciences, one of the largest industry clusters in San Diego County, is at the forefront of pioneering technology in subsectors such as DNA sequencing and genome research. In a 2017 report, Biocom, an advocate for California’s life science sector, reported San Diego’s Life Science industry is one of the strongest in the nation, employing almost 50,000 people directly and supporting an additional 133,000 jobs.

While the increasing adoption of automation has the potential to replace jobs, especially in Advanced Manufacturing, it also leads to growing demand for people with the capacity to design, facilitate and troubleshoot these new processes. There is also increasing need for highly skilled technicians to repair multi-million-dollar machinery. Advanced Manufacturing supports 168,374 jobs in San Diego and has increased by 7.0 percent in the past ten years. According to an upcoming SDWP report, the top growing industries within the sector are biotechnology and medical device manufacturing, experiencing a 66 percent increase in employment in the past ten years, and defense, aerospace and transportation manufacturing, which experienced a 43 percent increase in employment. Aerospace product and parts manufacturing alone has nearly doubled in size, from 6,400 jobs in December 2007 to 11,900 jobs as of July 2017.

The San Diego workforce has demonstrated resiliency and adaptability over the past decade. In the coming years, it will be crucial to pay close attention to the evolving technological skills needed by employers and to prepare the San Diego workforce for these positions.

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