BY JON HINDMAN (San Diego Business Journal, August  15 , 2005)

Inexpensive, highly available land and affordable residential real estate attracted many manufacturing companies to North County up until a couple of years ago. But now land is more expensive and not nearly as available and home prices are devastatingly high to first-time home buyers.

Admittedly, there actually never was a huge push to attract large manufacturers to the region, says Gary Knight, the president and chief executive officer of the San Diego North Economic Development Council, a coalition of the private and public sectors working to grow the economic base of North County. But now that those firms are here, he hopes they'll stay.

Although the affordability index is far from ideal, Knight says that North County is a tremendous environment for high-tech, biotech and medical equipment manufacturers, a trend he's confident will continue for many years because "there are a number of biotech companies starting up and their suppliers then form around them and establish a presence here," said Knight.

Tech Focus

Because of this, whenever the San Diego North EDC does try to attract manufacturers to North County, it'll likely concentrate on recruiting and relocating biotech and high-tech companies. And there's another reason for concentrating on strengthening the biotech and tech base, Knight says.

"You have to find businesses that have a good pay scale for their employees in order for them to be able to afford to live here," he said.

North County has a 20 percent deficit in the number of homes available, says Knight, so if 100 people are looking for a house, only 80 could find one and of the 80, only 9 percent could afford it.

In June, the median price for all homes in North County - both single-family detached and attached - was $569,000, compared with $485,000 for ZIP codes to the south and east, according to the North San Diego County Association of Realtors.

As for marketable traits that should help woo tech and biotech companies, one is the highly trained work force in the region, stemming from the higher education facilities.

Skilled Workers

According to Knight, "Cal State San Marcos, Palomar and MiraCosta all have programs designed to certify lab technicians. They also have programs in place to assist the biotech companies in getting qualified employees."

Carlsbad-based Invitrogen Corp., one of the region's largest manufacturers with more than 1,000 employees in North County, can attest that the skilled work force is a major plus to doing business here. Nicolas Barthelemy, the senior vice president of global operations at Invitrogen, says that the biotech manufacturer "benefits from a big pool of labor" that can't be found in most other areas of the United States.

The other marketable trait is more obvious and not as necessary to tout.

"People locate here for lifestyle. The quality of life here is very good," he said.

But even the excellent quality of life can be easy to turn down if the cost index remains high. Therefore, Knight says it's important to keep available space so that the cost index doesn't keep rising, and attack issues such as workers' compensation, energy and other factors that drive up the cost of doing business in North County.

The San Diego North EDC also plans to foster an environment that is friendly to small manufacturers, because currently the organization reports that a whopping 95 percent of businesses in the region have five employees or fewer. This figure isn't expected to fluctuate much in the future, especially in the manufacturing industry.

Knight expects that an increasing number of North County manufacturers will feature small local staffs, which will focus on creating ideas and doing the design and brain work, because product assembly continues to move to China and other parts of the world where it is less costly.