U.S. Benefits from Globalization and Open Borders
The United States benefits from globalization and open borders, both socially and economically. Migration alleviates human suffering driven by economic push factors, climate change, and conflict – conflict often instigated by US intervention in global politics. But migration also plays a large role in sustainable development and can help alleviate the cost of labor shortages (1.3 trillion per year across the world’s 30 largest economies).
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These same labor shortages are likely to be exacerbated in future by an aging population, both in the U.S. as a whole and in the San Diego area, where 23% of the population was aged 60 or older in 2022.
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Benefits also extend to companies, not just regional economies. A BCG analysis of more than 3,000 publicly listed companies shows that companies with greater global diversity generate 2.2 percentage-point higher profits (in terms of EBIT 8 margin).
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California, San Diego and the California-Baja Port of Entries
San Diego is fueled in large part by a “knowledge economy”, with research institutions and venture capital attracted to the area. Compare that to the very different industries of Tijuana, with its large manufacturing capacity and substantial foreign direct investment (over a billion dollars per year)
[4] and its clear how San Diego has much to gain from its place in relation to the US-Mexico border.
In 2019, the California-Baja port of entries saw almost 4,000 commercial trucks and 180M in bilateral trade traveling northbound each day. Exports from California to Mexico constituted $24.1B in 2020, and $47.9B in imports ($4.9B in vegetables and fruits).
People are also a major component of the regions relationship, and those same ports of entry had a daily average of 200,000 individuals cross south to north
[5], including both students and workers. Tijuana had nearly 7000 cross border students, and Mexicali had nearly 4000. San Diego had 2,806 cross border workers, and more than 1,923 in Imperial, 34,817 in Tijuana and 13,196 in Mexicali According to Knauss School of Business report on the CaliBaja regional economy.
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Covid-Resiliency
With border closures and restrictions in recent years, studies have shown that infrastructure deficiencies and long wait times at the border have had a negative economic impact on the area.
[7] The importance of this was highlighted during and after the Covid-19 pandemic. The San Diego Association Of Governments (SANDAG) reports that despite the challenges in border restrictions put in place during the pandemic, the crossborder dynamic proved to be an important part of the California-Baja border regions economic resiliency and recovery.
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Industry Highlights: Tourism
San Diego Tourism Authority and Tijuana authorities have taken part in joint tourism promotions for the region – a key effort given that the visitor industry employs 1 in 8 San Diegans, hosting 31.8 million visitors in 2023 who spent approximately $14.3 billion
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Industry Highlights: The Arts
The World Design Organization (WDO), an international NGO, announced in 2021 that both San Diego and Tijuana would be jointly named the World Design Capital (WDC) for 2024 thanks to their efforts towards human-centered design and their history of cross-border collaboration.
[10] San Diego and Tijuana were the first binational designation in the organizations history.
According to a report from the City of San Diego's Regional EDC, the creative industry of San Diego impacts the broader economy. For every job in the creative industry, another 1.1 jobs are supported, resulting in over 100,000 impacted jobs and $11.1B in economic impact.
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Industry Highlights: Manufacturing
The Baja-California and San Diego relationship has an enormous impact on the manufacturing industries for both regions. According to a report on the CaliBaja Regional Economy from USD School of Business, key cross-border manufacturing industries produce 52,000 jobs in San Diego and Imperial and 177,500 jobs in Baja, with $14.9B value added in San Diego ($287,500 per worker) and $2.2 billion in value-added generated in Baja California ($12,250 per worker). These same industries are also supported by around 50,000 college graduates each year.
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