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

Crossborder Group
Crossborder Group

Presentation made April 25, 2013, to the members of the San Diego Regional EDCs 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 Groups own proprietary at-border surveys).

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Seeing Past the Misperceptions: Crossborder Trends and Why They Matter San Diego Regional Economic Development Corporation Chairmans Competitiveness Council April 25, 2013
A Few (Possibly) Surprising Facts About Tijuana & Baja California
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
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
#3 State employment in Mexicos 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) Bajas growth sectors: medical devices, aerospace, automotive, food TIJUANA & BAJA CA: MAJOR MANUFACTURING CENTER
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: BAJAS 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
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 Diegos unique advantages is nearshore proximity to lower-cost, globally competitive manufacturing in Baja California NEXT DECADE: MFG COSTS TO FAVOR MEXICOAND TJ
S鱈. Tijuana and Baja California: on the mend Despite media hysteria: peak of violence in 2008 Fact: in 2012, Tijuanas 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 BUTHAS REGIONAL SECURITY IMPROVED?
The Border & What it Means for San Diego
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
BAJA CALIFORNIA: PART OF REGIONS HEALTH CARE SYSTEM Baja California also de facto part of San Diegos (and SoCals) 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
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
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 PLANNEDBUT NOT ENOUGH $$
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:
臓Gracias! 多Preguntas? KennMorris, President/CEOof CrossborderGroup Email:Kenn@CrossborderBusiness.com SanDiego: 619-710-8120 Tijuana: 664-380-6151

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

  • 1. Seeing Past the Misperceptions: Crossborder Trends and Why They Matter San Diego Regional Economic Development Corporation Chairmans 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 Mexicos 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) Bajas 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: BAJAS 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 Diegos unique advantages is nearshore proximity to lower-cost, globally competitive manufacturing in Baja California NEXT DECADE: MFG COSTS TO FAVOR MEXICOAND TJ
  • 8. S鱈. Tijuana and Baja California: on the mend Despite media hysteria: peak of violence in 2008 Fact: in 2012, Tijuanas 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 BUTHAS 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 REGIONS HEALTH CARE SYSTEM Baja California also de facto part of San Diegos (and SoCals) 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 PLANNEDBUT 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. 臓Gracias! 多Preguntas? KennMorris, President/CEOof CrossborderGroup Email:Kenn@CrossborderBusiness.com SanDiego: 619-710-8120 Tijuana: 664-380-6151