SAN DIEGO—In 2014, San Diego was ranked the 16^th-largest metropolitan region in the US in terms of its GDP, according to San Diego Regional Economic Development Center. The market definitely has its strengths in industrial and exporting, but it also has its weaknesses. GlobeSt.com spoke exclusively with the organization's VP of economic development Sean Barr about those strengths and weaknesses and how San Diego can boost its exporting potential among other global markets.

GlobeSt.com: How does San Diego's industrial and exporting power compare to other markets in California?

Barr: Both Sacramento and Los Angeles have been through the process San Diego has been through, the Global Cities Initiative, a five-year project through the Brookings Institute that aims to help leaders in U.S. metropolitan areas reorient their economies toward greater engagement in world markets. All three markets went through that process to develop specific, targeted export plans. San Diego has done alright historically in export potential, but there's a lot more room for us to grow with respect to our technology base. Biotech, medical devices, telecommunications, software and robotics all have tremendous potential offshore in overseas markets.

GlobeSt.com: What are the region's unique strengths and weaknesses in this area?

Barr: Our export strengths really mirror the strengths of the economy. When we look at economic drivers here, we think about it in terms of three legs on a stool that drive the vast majority of our growth: the innovation economy, defense-oriented technology and the tourism economy. Those three are our greatest exports in San Diego. But when you combine that with the academic institutions that are here—SDSU, UCSD, the University of San Diego, Cal State San Marcos—and you see the number of foreign students on those campuses, it's clear that our educational institutions are in fact also an export. There is huge potential here for education as an export.

When it comes to our weaknesses as a region, a few things come to mind. Historically, many of our companies have looked at the fact that San Diego is one of the largest economies on the planet. It offers great opportunity for small or mid-sized companies who say, “Why would I need to take my product or services around the world when one of the largest economies is in my backyard?” That has been a challenge for many companies in terms of looking at whether they should be exporting because they have everything they need here.

Another weakness is our connectedness. LAX and SFO offer a number of daily direct international flights, but this is not true in San Diego. Being able to access international markets with ease certainly has been a challenge for businesses in San Diego. And companies do not have the information they need to make well-informed decisions about entering or diversifying into new markets, which makes it difficult to make sound decisions on executing a business plan. We need to provide that information more effectively.

GlobeSt.com: How do you see these weaknesses changing in the future?

Barr: This year, we at SDREDC have developed a Go Global San Diego Initiative with more than 30 partners and 400 businesses that is designed to bring a wealth of industry associations and supporting ecosystems to the table to ensure that members have the information they need to go global. These are things we need as a region to compete globally. We are working to develop two things: the global competitiveness of our companies and the global competitiveness of the region.

For the first, we want to be more streamlined in order to get companies who are thinking of going global the information they need. We want to incentivize their interest in going global via a MetroConnect prize, which provides grants to companies considering entering a new foreign market. Over the past two months, we have selected 15 companies from more than 65 applications who are actively pursuing those markets. It's designed to take some of the risk out of the equation by offering them funds to support their efforts to go global.

Secondly, we want to enhance the global competitiveness of our region. We're working very closely with the San Diego Regional Airport Authority to provide direct airline service to international destinations. British Airways introduced a new direct flight to London a few years ago, and two years ago Japan Airlines made the decision to provide direct service form San Diego to Tokyo. These are two examples of the type of access that we need to expand globally. We're looking to expand and add service to new global cities in the near future, which is part of our effort to coordinate a much better global-competitiveness approach here in the region.

GlobeSt.com: How can CRE get involved in these efforts?

Barr: When you talk about export, sometimes your best customer is your best investor. A lot of people we sell product to are San Diego's best investors, too. Japan and the UK are our largest export destinations, but they're also San Diego's largest customers. Export attracts investment back into the region, and companies like Kyocera, Sony and other large Japanese firms have a significant presence here in San Diego. We will likely see continued investment from Japan and the UK, which brings with it commercial real estate needs at a time when the availability of foreign capital is growing. This is a great opportunity for San Diego to attract a much larger share of that investment, particularly from those companies interested in biotech and wireless—San Diego has tremendous potential for companies looking to attract those firms. There is great potential for the CRE market to continue to keep an eye on them and to attract and grow them.

Globally oriented companies, whether an exporter or a foreign-owned firm with a presence in San Diego, pay higher wages, grow faster and spend more on R&D. From a CRE perspective, that's the type of client that is of the most interest. That sounds like a nice clientele lineup, from my point of view. The facts bear out—globally oriented firms are more competitive than those firms that are only domestically focused. The world economy is increasingly offshore. World investors are increasingly outside of our country, so we have to continue to compete for that investment.