By Gary London
While there are valued manufacturing concerns active and presumably profitable in San Diego, the overall “footprint” for manufacturing is diminishing, and the number of manufacturing jobs has fallen dramatically.
In the last 11 years, the San Diego region has lost 30,000 manufacturing jobs. This 25 percent reduction (from 122,000 jobs in 2000 to 92,000 jobs in 2011) is not simply due to the recession.
This is a long-range trend, and these are likely permanent losses.
While manufacturing is dispersed throughout the region its footprint is most noticeably now on the “Mesas”: Kearny Mesa, Sorrento Mesa and Otay Mesa.
The pattern is quite simple. Kearny is the home of the “meat and potatoes” manufacturers, which produce more of the sustainable items needed in our economy. Sorrento is home to the once emerging, now stable and very important technology sectors. Otay is the hub of international trade, stocking and warehousing goods from Mexico and points south.
Together, they present continuing economic health to our region. Firms here to stay in the manufacturing sector are those focused on technology and products for the military including Nassco/General Dynamics, General Atomics and Goodrich. This is not a mystery: These are some of the top manufacturing firms on the San Diego Regional Economic Development Corp’s. “largest manufacturers” list.
These important companies countywide mostly do not hold the keys to our economic future. Those keys certainly include the technology firms, but the keys are mostly in the services and businesses sectors in our region.
We must understand this in order to guide our future urban policy.
The goal of public policymakers should be to flexibly encourage the creative re-use of land and structures. This was seen earlier in Mission Valley and presently in Kearny Mesa where the pattern of development has refocused from lower to higher density buildings and a concomitant job change has accompanied the land-use changes.
Kearny Mesa now contains 110,000 square feet less industrial space (a drop to 11.4 million square feet which occurred over the past nine years). This is not a lot of reduction, but it portends the fate and the future of this Mesa. It is rapidly becoming a more urban, diverse place.
And it should. It is smack in the center of the region. It is easily accessible, easy to build on and vast.
We are not seeing this conversion or abandonment of manufacturing space on a larger scale, yet, but losing 30,000 jobs in the last 11 years translates to vanishing of demand for 1.5 million square feet of industrial space. Now operating with workforces that are smaller, manufacturers are not effectively utilizing their space and will ultimately demand less space.
This translates into conversion, repurposing and demolition.
The purpose of public policy ought to be to encourage conversion to vertical- and mixed-use without demanding it. In other words, if a conversion or demolition is proposed, it should be allowed assuming problems between concerned parties are resolved.
This is how we will achieve economic growth and prosperity in the region. We must recognize that the growth in manufacturing in our region is mostly toast. Policy guidelines should contain reasonable approaches to maintain and preserve what we have, but they should also allow the market to move rapidly if better, more viable, land uses are proposed.
The ticket to prosperity is in professional services and businesses. It is in high technology (communications, pharma and software, maybe clean-tech). It is with the military complex. It is in international trade and tourism.
As we approach 2012 it is time to shelve stale public policy and replace it with new policy and initiatives, which recognize the alteration in our local factors of production. We must recognize the changes and nurture the new engines for our region’s growth and prosperity.