Economy
A common misconception of San Diego economy is that the defense- and military-based economy continues to be hit hard by cutbacks in defense spending. While this may have been true in past years, San Diego economic planners have worked hard to build a more diversified economy in order to remain untouched by the rises and falls of any one industry group.

In the years following the first declines in defense-related income, some industries in San Diego have remained stable with steady growth, while others, such as high technology medical technology and business services have come onto the forefront as major areas of potential economic growth.

According to the San Diego Regional Chamber of Commerce Economic Research Bureau, projections for the 2002 economy indicate continued growth through 2003. The value of all goods and services generated in San Diego County neared $120.1 billion during 2001; goods and services generated in 2002 are projected to grow to $126.2 billion.

San Diego's "real" Gross Regional Product (GRP) growth in 2002 is estimated at 2.4 percent, while 2001 forecasts aimed toward 3.3 percent growth. San Diego’s rate of economic growth is projected to continue to outperform both the state and nation in 2003.

One of the best indicators of San Diego's economic recovery is the number of jobs being created. Despite a national recession, San Diego added nearly 20,000 jobs in 2002. Total civilian employment, which includes local employees and self-employed people, averaged 1,468,340 in 2002, the highest ever recorded for San Diego County. In addition, the annual average unemployment rate remained considerably low at 4.0 percent.

The following is brief look at key industries in San Diego County.

Agriculture
San Diego continues to see a gradual increases in agricultural production value due to specialization in such crops as avocados, exotic flowers and nursery and decorative plants. San Diego County ranks as the 20th largest agriculture producer in the nation. It also has the second largest number of farms in the nation. Nursery and flower crops account for two-thirds of the total production value.

Defense
The increase in military and homeland defense spending has greatly contributed to economic growth in the past year. In 2001, San Diego received more than $10 billion in direct expenditures from the U.S. Department of Defense (DOD), a rate second only to Los Angeles County in DOD expenditures and obligations. Military installations include Marine Corps Base Camp Joseph H. Pendleton; the Marine Corps Recruit Depot (MCRD); Marine Corps Air Station at Miramar; Naval Air Station North Island; Naval Station San Diego; and Naval Submarine Base, San Diego. These facilities will continue to train recruits and maintain U.S. military ships and planes.

The military base realignments and closures of the 1990s actually proved to benefit San Diego. Despite losing the Naval Training Center at Point Loma, the region absorbed military operations from other areas as the Navy committed more than ever to San Diego. The most significant of these relocations was the U.S. Space and Warfare Systems Command (SPAWAR).

SPAWAR move from Virginia to San Diego in 1997, and now employs nearly 4,000 workers in the county and had an operating budget of $4.3 billion in 2001. The close of the Long Beach Naval Shipyard also transferred millions of dollars in shipbuilding and repair contracts to private San Diego companies. Coronado NAS will become homeport to three, massive, nuclear-powered aircraft carriers, entailing a substantial upgrading in facilities to accommodate these larger ships.

High Technology
San Diego is beginning to be seen as an area for emerging technologies, especially due to the region’s diversity of high-technology clusters. While aerospace does not have the impact on San Diego like they did in past years, advances and growth in other technology areas, include the biomedical, software, telecommunications and security sectors. There are nearly 160,000 high technology workers in the 1,400 companies throughout San Diego. Telecommunications, such as wireless phones, contributes more than $5 billion to the local economy each year.

Biotechnology
San Diego County has many notable medical research institutions within its borders, and a variety of significant biomedical and biotechnological developments have emerged from these facilities. With more than 32,000 biotech jobs in 499 companies, San Diego has the third largest concentration of biotech companies of all U.S. metropolitan areas.

Dr. Jonas Salk, founder of the Salk Institute for Biological Studies in La Jolla, developed the polio vaccine in 1955, creating the foundation for the region’s life sciences community. Advances in health care and medicine continue to come from the Salk Institute, as well as the University of California San Diego, Scripps Clinic and the La Jolla Cancer Research Foundation.

International Trade
International trade continues to be a major economic strength for the region. The border between San Diego and Mexico already is the busiest in the world. The San Diego-Tijuana binational economy is further enhanced by NAFTA. Goods moving through the San Diego customs district totaled $33.6 billion in 2001. Tijuana has become the television producing capital of North America, if not the world, as Asian manufacturers opened manufacturing facilities in the region because of the inducement of NAFTA advantages.

Manufacturing
Manufacturing is the largest contributor to the county's gross regional product, accounting for $25 billion in 2002, an all-time high, according to the Economic Research Bureau of the San Diego Regional Chamber of Commerce. Major manufacturing areas include shipbuilding and repair, industrial machinery and computers, metals production, and the manufacture of toys and sporting goods.

Tourism
San Diego is considered one of the most desirable year-round vacation spots in the nation, and it is regularly ranked in the top ten most popular destinations in the continental United States for international visitors. Despite a worldwide downturn in the tourism industry and especially in air travelers, San Diego successfully targeted several West Coast drive-in markets, bringing more regional vacationers to the area. In 2001 total revenue from visitors topped $5.1 billion. As a result, service industries have seen continued growth in past years, specifically in areas such as dining, lodging, shopping and recreation services.