So, What’s Your Problem?

I was in a meeting recently with some folks from outside the U.S. who wanted to know about San Diego’s economic resurgence over the last fifteen years. How, they wondered, had things improved so markedly, from a reliance on defense and tourism to a much more broadly-based economy that included, among other things, top national clusters in wireless and in life sciences.

Without getting into my answer in any detail (which emphasized good luck over good management), an interesting question came up during the subsequent wine-and-cheese: So, what’s your problem?, someone asked. What, he wondered somewhat facetiously, did San Diego struggle with, given the irritatingly nice weather, the splendid views, the lurking ocean, and the apparent success at economic development.

The answer was easy: Real estate. There is very little percentage in San Diego companies or institutions searching for employees who aren’t already living in a high-price region, like New York, Atlanta, Seattle, Boston, or San Francisco. After all, however interested they are in a position in a San Diego County firm or institution, they will fall over in a faint at the sight of an entry-level house priced at $700,000 for a 2,000-squ. ft. fixer-upper on a lot so sloped your barbeque has to be chained to the patio.

So there’s the worm in the system: San Diego companies have a very difficult time hiring entry- and mid-level employees — said folks just can’t afford to move there with requisite spouse and two kids. And even if they are willing to commute to get something better, then their naive optimism won’t last long in the face of 90-120 minutes on regional freeways every working day.

What’s the solution? I wish I knew. In some sense it feels like economic growth is perversely self-limiting, at least in places like San Diego that are inherently land-locked. (San Diego is bordered to the west by ocean, to the south by Mexico, to the east by mountains and desert, and to the north by the Marine base at Camp Pendleton.) At some point you simply can’t draw enough economic immigrants to keep things growing.


  1. What’s wrong with up?

  2. Not sure what you mean, but I have no problem with “up”. Just pointing out that regional vagaries in real estate markets increasingly mean that places like San Diego have to be highly selective in terms of where their companies look for hires.

  3. The next big thing on the internet will be video. I suppose we will travel much less. Why?
    Peak Oil: Life After the Oil Crash

  4. Traffic
    “Imagine how people in 2050 will look back at our lives today…”
    “If there is one thing that will appall people in 2050, it is the notion of traffic. The traffic problems that we experience in the United States today are pathetic beyond belief.”

  5. Energy is the next big thing…
    Bob Metcalfe – Memory Lane
    John Doerr – Web 2.0
    Alternative Energy Blog
    Alternative Energy –