Is San Diego on track to become the next Silicon Valley?
It’s no secret that San Diego is on the rise. The city has become one of the most popular cities for people to relocate to, ranking eight in the United States for population growth from 2017 to 2018. The rise in the city’s economy has been rapid in the last decade and the city is enjoying the lowest unemployment rate that it has seen in the past 10 years. And as people and jobs are rushing into the city, people are beginning to notice the ever-largening presence of tech companies. The presence of these tech companies coupled with the ever-expanding field of technology has people wondering, is San Diego the next Silicon Valley? We’ll breakdown what has been happening in San Diego in recent years, what the present landscape looks like and what the predictions are for the future of the city.
In 1985, San Diego got its first big data company when Qualcomm opened its doors in the city. The company has brought millions of tech jobs to the area since its founding and has grown to be one of San Diego’s largest employers. The presence of Qualcomm in the city has itself been a draw for business and is surely one of the seeds that was planted to bring San Diego to its rising status in the tech industry.
Another key factor in San Diego’s rise has been the consequences of enormous growth in other cities. In places that have historically attracted companies before like San Francisco and Silicon Valley, rents have become far more expensive than neighboring cities. When companies see these price tags that aren’t feasible for their start-up or even existing company, they need somewhere to turn. In the past 10 years, that place has often been San Diego.
More and more start-ups are choosing San Diego. In 2016-2017, San Diego was one of the top 10 cities for start-ups. While it was not in the top five of the list, San Diego still had the highest relative growth overtime along with L.A. and Chicago. This means that San Diego started with a lower number of start-ups and that while not in the top five, it has grown more popular over the years. This brings us to present-day San Diego and the things that are going on around the city in 2019.
A strength that San Diego has in the growing economy is the make-up of its residents. San Diego is home to a bounty of millennials and skilled workers. A 2018 study found that one in three San Diego residents are millennials, putting it just behind Austin, Texas in cities with the largest amounts of millennial residents. The workforce in San Diego right now is younger and more skilled than ever before, leaving companies to have to fight to attract top talent. The amount of companies is getting larger and the benefits that they can offer their workers are becoming increasingly important as the companies try to ensure that they have the best employees for the job.
As companies like Apple, Walmart and Amazon flock to San Diego to take advantage of the relatively low rental rates compared to other places in California, it seems that the future of San Diego is not unlike that of Silicon Valley. The next few years are sure to be formative for the future of San Diego and help residents, the real estate industry and interested companies to create plans for their futures in San Diego.