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).

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