2013 - Seeing Past the Misperceptions: Crossborder Trends and Why They Matter
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The document discusses the economic significance of Tijuana and Baja California, highlighting their status as major manufacturing hubs in North America, particularly in medical devices and electronics. It notes the relocation of manufacturing due to increasing costs in China, which favors Mexico's competitive advantages. Additionally, the document addresses perceptions of violence in the region and the implications for cross-border trade and healthcare services, emphasizing the need for improved border infrastructure to support economic growth.
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 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