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2013 - Seeing Past the Misperceptions: Crossborder Trends and Why They Matter

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Presentation made April 25, 2013, to the members of the San Diego Regional EDC’s Competitiveness Council. Provides an overview of some key facts about the San Diego-Tijuana binational relationship – …

Presentation made April 25, 2013, to the members of the San Diego Regional EDC’s Competitiveness Council. Provides an overview of some key facts about the San Diego-Tijuana binational relationship – including population, trade, manufacturing, security and border crossing data (some of which is derived from Crossborder Group’s own proprietary at-border surveys).

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  • 1. Seeing Past the Misperceptions: Crossborder Trends and Why They Matter San Diego Regional Economic Development Corporation Chairman’s Competitiveness Council • April 25, 2013
  • 2. A Few (Possibly) Surprising Facts About Tijuana & Baja California
  • 3. • Amongst top MX Metro regions, Tijuana ranks #6 in population • Tijuana: Second-largest city on West Coast of North America • Nearby Mexicali: #13 in ranking of Mexico metro regions… TIJUANA : BIGGER CITY THAN YOU MIGHT THINK
  • 4. • Over 62,000 trucks cross northbound (and south) each month… • Otay Mesa is typically #2 Land Port along US- Mexico border: $32.8B in trucked trade (2011) • Trucked trade at Otay Mesa = 6X value of goods through Sea Port of San Diego… REGIONAL PORTS: $32B BY LAND…$5B BY SEA
  • 5. #3 State employment in Mexico’s maquiladora/IMMEX industries • Mexico: 2.0M (above 2007 peak of 1.9M); Baja: 236K (vs. 260K in 2007) • Tijuana: 159K (vs. 170K in 2007); Mexicali: 48K (vs. 57K in 2007) • Baja’s growth sectors: medical devices, aerospace, automotive, food… TIJUANA & BAJA CA: MAJOR MANUFACTURING CENTER
  • 6. • Tijuana: a national (& North American) leader in some tech sectors… • #1 location in NorthAm for medical device mfg employment (31K) • One of top NorthAm metros for electronics mfg employment (46K) REGIONAL ECONOMICS: BAJA’S ADVANTAGE FOR TECH MFG Santa Clara County San Diego County Orange County Michigan State Los Angeles County Chicago Metro Boston Metro New York State Minneapolis-St. Paul City of Tijuana* 9,859 10,360 11,528 11,261 12,570 12,789 15,229 18,233 22,099 31,079 2010/2012 Medical Device Mfg Employment in Key Regions* *data for Q2-2012 *see endnotes for estimation methodology used
  • 7. • China: times they are changin’ • Total China costs for mfg & logistics to North American markets increasing • Boston Consulting Group: by 2015, China mfg costs approx. $4.50/hr • KPMG: 2012 Competitive Alternatives study found little difference in Mexico v China costs • One of San Diego’s unique advantages is nearshore proximity to lower-cost, globally competitive manufacturing in Baja California NEXT DECADE: MFG COSTS TO FAVOR MEXICO…AND TJ
  • 8. Sí. Tijuana and Baja California: on the mend… • Despite media hysteria: peak of violence in 2008 • Fact: in 2012, Tijuana’s homicide rate significantly lower than many cities in US • Some increases in Q1-2013, but still far lower than 2008- 2009 peaks… • …Yet perceptions of violence continue to impede stronger relations BUT…HAS REGIONAL SECURITY IMPROVED?
  • 9. The Border & What it Means for San Diego
  • 10. Border crossers are commuters, tourists, and consumers… • At-border surveys by Crossborder Group show typical $140-170 daily average expenditure by Mexico-residing border crossers • …$10-14 million in crossborder retail expenditures daily BORDER CROSSERS: SIGNIFICANT SOCAL ECONOMIC IMPACTS
  • 11. BAJA CALIFORNIA: PART OF REGION’S HEALTH CARE SYSTEM …Baja California also de facto part of San Diego’s (and SoCal’s) health care marketplace • Survey: 46% of US-residing border crossers used medical services in Baja California over 12 previous months… • What? Dental, eye care, pediatric, elective surgeries… • Not only lower-cost source for health care services, but also for Spanish-speaking health care professionals
  • 12. • Border delays resulting in fewer people crossing the border… • From 61.5M individuals crossing in cars, buses, and walking in 2003 – to just over 41.3M in 2012 (a -32.8% decline!) BORDER INFRASTRUCTURE: NOT KEEPING PACE
  • 13. • Around $2-3 billion needed just for California-Baja CA POEs • Lack of funds (and resulting queues/delays) an economic, social & health threat to region BORDER CROSSINGS – PLANNED…BUT NOT ENOUGH $$
  • 14. SOMETHING UNIQUE: THE “CALI-BAJA” MEGA REGION Tried to give a few insights for “why” the binational Cali-Baja Mega Region should matter… • San Diego Regional EDC blog, March 4:
  • 15. ¡Gracias! ¿Preguntas? KennMorris, President/CEOof CrossborderGroup Email:Kenn@CrossborderBusiness.com SanDiego: 619-710-8120 • Tijuana: 664-380-6151

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