Report: Industry employs 6,600 workers and has a $1.5 billion impact locally
By Mike Freeman Mar 20, 2014
In the wake of high-profile data breaches at Target and elsewhere, San Diego business leaders aim to promote the region as a hotbed for cyber security technology by tapping into military expertise that’s already here.
The San Diego Regional Economic Development Corp. released a study today highlighting the region’s cyber security prowess. More than 100 cyber companies — along with the U.S. Navy’s Space and Naval Warfare System Command Center (SPAWAR) — employ about 6,600 workers locally and generate $1.5 billion in total economic impact.
The EDC has teamed up with private firms, including anti-virus software maker ESET and information technology contractor Sentek Global, to create a Cyber Center of Excellence. The goal is to nurture a cyber security ecosystem to create jobs, similar to the biotechnology and wireless clusters that San Diego is known for.
Three members of San Diego County’s congressional delegation, Democrats Scott Peters and Susan Davis and Republican Darrell Issa, are scheduled to speak at a news conference this morning announcing the initiative. San Diego Mayor Kevin Faulconer and Rear Adm. Patrick Brady, commander of SPAWAR, also are slated to attend.
“As we move forward, we really want to get people to recognize San Diego as a leader in cyber security,” said Mark Cafferty, chief executive of the EDC. “This gives us an opportunity to start with a growing sector that we know has an anchor in San Diego.”
About half of the region’s cyber security-related employees are at SPAWAR, the computer networking, engineering and communications arm of the Navy. With military budget cuts looming, cyber security is an area that’s likely to escape the worst of the budget ax. The Defense Department recently proposed a five-year cyber security budget totaling $23 billion.
“There is a need for businesses and the community to step up and help the Department of Defense capitalize on that investment,” SPAWAR spokesman Greg Geisen said. “It is not going to happen in one city or one town. The regions that are not paying attention are not going to capitalize. Those that stand together and show what they have to offer are most likely to benefit.”
San Diego isn’t alone in promoting cyber security as an economic engine. Much of the nation’s cyber security infrastructure is based around Washington, D.C., and Baltimore — the home of the National Security Agency, U.S. Cyber Command and the National Institute of Standards and Technology’s Computer Security Division, among others.
Baltimore in particular has been aggressive in laying the educational, capital and marketing foundation to form a cyber security hub, which now employs about 75,000 workers in the Baltimore and Central Maryland area.
Meanwhile, San Diego’s cyber industry suffered a blow when Internet security software firm Websense announced that it was relocating its headquarters — and 445 jobs — to Texas.
Still, local officials say the time is right to position San Diego as a cyber security cluster, when massive data breaches grab headlines and technology trends such as remote computing and digital health care make network security a priority.
Fifteen years ago, most hackers broke into networks simply to show off to fellow computer geeks. They did little actual damage. Today, experts say state-sponsored attackers and organized criminals are behind most incursions. They’re after credit card numbers, intellectual property and other valuable information.
“What we are seeing is the threat now shifting from being purely a problem for the government to being a huge problem for the private sector,” said Andrew Serwin, a San Diego lawyer who worked with the EDC on the cyber security report.
The region employs about 3,550 private sector workers in the cyber security field, according to the study. The CyberHive startup incubator and educational programs such as Securing Our eCity also have roots here. The San Diego Supercomputer Center located on the UC San Diego campus, coupled with Web security education programs at other universities, sets the stage for a cyber security cluster.
But SPAWAR is the centerpiece. It employs 3,095 in the field locally, according to the study. It supports many private firms through information technology contracts. More than half of cyber businesses in San Diego list the federal government as a customer.
SPAWAR has operations across the country, but San Diego is its largest location. It has research and development labs in Point Loma and Old Town.
“SPAWAR is being looked at as the beacon potentially for a lot of that cyber security innovation,” said Sean Barr, vice president of the EDC. “They are the second largest generator of intellectual property in our region behind Qualcomm. It is a significant opportunity for the Cyber Center of Excellence to leverage.”