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Manufacturing Contributes Nearly 9% To San Diego Economy

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Manufacturing Contributes Nearly 9% To San Diego Economy
Manufacturing Contributes Nearly 9% To San Diego Economy
Manufacturing Contributes Nearly 9 Percent To San Diego's Economy GUESTSKelly Cunningham, economist, National University System Institute for Policy Research Mary Walshok, dean of extension, UC San Diego

TOM FUDGE: Our top story on Midday Edition, they've got a day for everything, and tomorrow is the national manufacturing day. The national University Institute for policy research took a close look at the manufacturing district in San Diego, and they found that there are just over 94,000 people are working in San Diego factories. If you think they are all guys with blue collars, hard hands, and a little education, consider this. The average annual wage of a person in manufacturing in our region is $75,800. Joining me to talk further about the reality of manufacturing in San Diego and where it is going in this economy are Kelly Cunningham and Mary Walshok. A question for both of you, American manufacturing is not what it used to be. How, and why have things changed? KELLY CUNNINGHAM: Specifically for San Diego, especially, it is not our grandfathers manufacturing industry anymore. Industry is increasing in dollar value of production of what we are making in San Diego. We are actually doing it with fewer people. We do not need as many workers, so it is not quite the old factories, but it is more of a clean, sterile environment, in the facilities and in the manufacturing industry. TOM FUDGE: I think the old factories have gone away in a lot of parts of the United States. Just because of the fact we are in a global economy, and wages are lower elsewhere. MARY WALSHOK: We actually estimated in a research project we just completed even more manufacturing jobs. We were talking about as we walked in. I think a good metaphor is assembly-line models, the old image of manufacturing. Today, it is all about networks. A network economy of suppliers. Tool am a die, model makers, fabrication specialist, and they were manufacturing multiple and producing multiple products. In San Diego, we estimate close to 170,000 people. A lot of those are computer scientists working in production. Also, to pick up on Kelly's point, 80% of the people working in these jobs work for employers and companies that have twenty persons or less. It is all about networking. TOM FUDGE: Excuse me, let me get one fact straight. It seems there may be a disagreement about the number of people involved in manufacturing. I think your study said 94,000. KELLY CUNNINGHAM: That is correct, that is defined by the North American industrial classification system. I think Mary is including other jobs that would be categorized under a different industry, but fabrication and manufacturing work in another way. MARY WALSHOK: I think Kelly and I would agree that the old way of defining manufacturing is problematic. It is really about designing, making, and producing stuff. If you have that broad definition, then you get biotechnology into the conversation. You get information, communications technology, and fabrication of metal is 10% of the jobs in San Diego jobs. TOM FUDGE: Kelly, what do you want to add to that? What are some of the other companies, and what are they making? KELLY CUNNINGHAM: Mary is talking about R&D, that is true of what San Diego's manufacturing industry is as well, what you would consider more of research and development. It contributes, and as part of this umbrella of manufacturing. But for San Diego, our sectors are led by electronics and computers. Aerospace and shipbuilding, they are still prominent, but not as prominent as they once were, but they are still a big part. TOM FUDGE: They are making drones. KELLY CUNNINGHAM: That is a good example. The actual application of the drones do not take place in San Diego, the research and develop enough that is taking place at Northrup. The actual fabrication takes place in Riverside. MARY WALSHOK: We also manufacture Taylor guitars. TOM FUDGE: Illumina, I wrote down a few names of companies, D & K Engineering, Stone Brewery, Taylor Guitars. It was funny that I read the craft brewing industry is included, and beer is a manufactured product, even though it is food? MARY WALSHOK: We are producing products that are either being embedded in other products like automobiles or drones, but we are also producing skateboards, surfboards, guitars, beer, and when you start adding those activities, Kelly and I get closer together. R&D, the guys in the white coats do something that is quite different than the actual fabricating, something, and distribution of the products that come out of the innovation. That is what San Diego is getting better at, but in a very different way than in the past. TOM FUDGE: Let us to work with your numbers, so we can make comparisons to what you found in your study. How big of a segment of San Diego's economy is made up of any fracturing and the people they employ? KELLY CUNNINGHAM: It is the value, or the gross domestic product is about $17 billion, that is 9% directly to the GDP in San Diego. You can add in other factors, and they can double that. MARY WALSHOK: You add in the other factors, that is exactly what happens, it doubles that. TOM FUDGE: If you look at 9%, how does that compare to ten years ago? KELLY CUNNINGHAM: It was a little higher under the strict definition of manufacturing. Just as recently as ninety-seven, it was about 13% of our GDP. It struck a bit, not in dollars produced, but because other parts of the economy have grown. TOM FUDGE: There are surprisingly high salaries in San Diego manufacturing. You think of a factory worker, you think of someone not making that much money. But Kelly, the average is $75,000 a year? KELLY CUNNINGHAM: Yes, for manufacturing, that is the annual average, or to the overall average about $54,000. In some areas, hundred thousand dollars is the average for the industry, such as biomedical. TOM FUDGE: Who are the people making the series money, people in biomedical? MARY WALSHOK: Nuclear welders. KELLY CUNNINGHAM: Yes, Aerospace is there as well. TOM FUDGE: What is a nuclear welder? MARY WALSHOK: A welder working in a nuclear energy plant, working with composite materials and fabricating propellers for the windmills that we see all over Palm Springs. We do not think of those is manufacturing jobs, but what Kelly's getting at, those are very high skill contents. Not necessarily college graduates, but very sophisticated technical engineering, welding, pipefitting, and other jobs that can command high wages. TOM FUDGE: And Kelly, there are people who work in manufacturing who do have college degrees? KELLY CUNNINGHAM: We actually from the majority of manufacturing workers in San Diego have a bachelors degree or higher. That reflects the changing area of manufacturing that requires technical skills, we found in our studies that there was a higher degree of those with a bachelor's or higher workers holding jobs here. TOM FUDGE: What about the training needed to produce these high-end people in manufacturing? Is that training that we have in San Diego? MARY WALSHOK: We have real gaps in terms of the workforce partnership community colleges, and university partners as well. Even people the skills they need to put education to work in the sectors where they are needed. Everybody wants a well educated worker. You have to be of the do math, read manuals, work in teams. That being said, you have to work in a very specific technical manufacturing or production environment, and most kids have never even seen those places, much less visited them. Or, have done a project in a worksite, so an employer can say you have worked in an AA site, and you have all of this experience, so I can put you to work tomorrow. We heard, and did a survey of companies including companies presenting tomorrow, the big gap for them is that kids are not work ready. TOM FUDGE: What about UCSD's extension? Do you teach some of these kids? MARY WALSHOK: Programs like extension, and some of the community colleges are doing all kinds of certificate programs to bridge to employment. Particularly at the absolute level, as Kelly knows. We have programs in clinical trials, management, and a big program in green algae manufacturing. We have a large program in the regulatory affairs, in biomedical and biopharmaceutical. And project management for engineers. All kinds of computer applied mobile applications. These are the kinds of additive skills in a 4 to 6 course sequence, often taught by people who work in the industry that enable a generally educated person to be workplace ready. TOM FUDGE: Are we talking about computer skills, or manual skills, being a nuclear welder, that kind of thing? MARY WALSHOK: Most of these are skills with your head, not your hands. But you need to be of the work with tools, and know how the machines operate and function. But there is a component of since you learning. You cannot ride a bicycle reading and manual. You have to get up on the bicycle and make it move. There are a lot of things in the world that we study that you cannot learn in a manual, you have to have hands-on or physical experience. TOM FUDGE: What you want to add to this subject of education and training, Kelly? KELLY CUNNINGHAM: We found this and looking at the manufacturing industry, there is a huge variety of diversity. We're not just focused on Aerospace was building. Recreational skateboards, surfboards, it still takes a different kind of skill for each of those types of industries. What is striking about San Diego, we have such a variety, and almost any kind of skill like that could be put to work. TOM FUDGE: If I go to a local community college, and ask them if they have classes on how to make skateboards, would they look at me funny? KELLY CUNNINGHAM: Probably. Woodworking, and working with materials and components that go into it, I'm sure there are skills in their that can be taught and learned. It is a hands-on type of industry, you have to get into doing it. MARY WALSHOK: We heard there should be project-based learning at the university level, and every engineering student should work on a real project, solving a real engineering problem every year. In the engineering, vocationally oriented technical jobs, they need to be experiencing a worksite, working on a project. We need to, therefore, in my opinion, spent internships, and experience based learning and on the job training at every level of education. That would help to closed the gap between academic knowledge, the general knowledge you must have, and the practical knowledge you need. TOM FUDGE: We have heard a lot about research companies wanting to bring people in from Asia with special visas to work here, because there are not enough Americans who have the knowledge and training to do that work. This is also the case for manufacturing? MARY WALSHOK: It depends on the level. I will refer to Kelly. I am struck by how many engineers from Taiwan now work at QUALCOMM. KELLY CUNNINGHAM: We find that in some of the higher-level skills that are required, these technical skills engineering, computer sciences, there is a lack of workers available, so consequently, we have to go outside of the region to try and workers, including overseas. TOM FUDGE: On October 3, tomorrow, about twenty local manufacturing companies are holding open houses for public tours. For more information on how to sign up for one of those tours, go to our website KPBS.org. Mary and Kelly, thank you both very much.

What do drones, 3-D printers, beer and guitars have in common? They all make up part of San Diego's growing manufacturing sector.

Just in time for National Manufacturing Day, a new study by National University System for Policy Research shows manufacturing plays a big role in the region’s economy by supporting tens and thousands of good paying jobs.

The study finds manufacturing contributes nearly 9 percent to the region's gross domestic product (GDP) and has grown faster than the rest of the economy.

But the report points out employment is still a challenge, since there were fewer manufacturing jobs in 2013 compared to pre-recession levels.

Key findings

• Manufacturing employs just more than 94,000 people in San Diego;

• The average annual wage of a person in manufacturing in our region is $75,800, higher than the region's median income ($53,800);

• Manufacturing employment fell from 102,000 in 2007 to 94,800 in 2013;

• Most manufacturing jobs require a bachelor's degree;

On National Manufacturing Day, 25 local companies are opening their doors to the public for behind the scenes tours. To sign up for a tour and for other Manufacturing Day events visit www.mfgday.com