San Diego’s innovation economy is a uniquely powerful engine — one driven not by heavy industry or low-cost labor, but by something much harder to replicate: talent, innovation and global collaboration.
The region is a major innovation cluster with over 16,000 innovation related companies calling San Diego home and includes some of the most advanced companies in technology, life sciences, communications, cybersecurity, software, defense and AI. These are firms that don’t merely compete in a global market — they help define it. And while much of the national debate around tariffs focuses on traditional manufacturing, what’s often missed is how these policies affect high-growth innovation regions like San Diego. In short: These new tariffs will disproportionately impact our economy, an economy powered by high-growth firms and a highly skilled, high-wage workforce.
At Tech San Diego, we work closely with a broad cross-section of the region’s tech ecosystem. From early-stage startups building cutting-edge technology to multinational enterprises deg the next generation of wireless infrastructure, nearly all are affected in some way by global supply chains. Tariffs, especially sweeping or retaliatory ones, inject uncertainty into those supply chains — delaying product development, complicating sourcing and increasing costs.
For a company developing new medical diagnostics or wearable health sensors, a key component may come from Taiwan. For a chip design firm, a particular wafer or etching tool may be sourced through a vendor who relies on imports from China or Southeast Asia. These are not optional purchases; they’re the backbone of what makes these companies competitive. Tariffs don’t just raise costs — they disrupt timelines, innovation cycles and workforce planning.
Critics sometimes argue that strong trade stances protect domestic industry. That may hold true for commodity goods, but innovation economies are built on agility. When the rules change without warning, even large firms can falter. Small and mid-size companies — so vital to San Diego’s economy — often don’t have the margin or scale to absorb those disruptions. They’re forced to make hard choices: delay a product launch, halt hiring or pull back from international expansion.
Moreover, these impacts ripple out into our community. San Diego’s tech and life science workforce includes thousands of engineers, data scientists and researchers earning high wages and contributing to a thriving regional economy. When companies hit pause on growth, it doesn’t just affect their bottom line — it impacts housing, education, and the broader local ecosystem.
This is especially significant for San Diego, which has worked hard to retain its university talent through the Jacobs Talent Initiative — a regional effort that connects students from local universities with local innovation companies to strengthen the talent pipeline and keep top graduates in the region.
Let’s also be clear: Our do not advocate for unfettered trade without guardrails. Fairness matters. Intellectual property theft, forced tech transfer and uneven tariff regimes abroad are real concerns. But the solution isn’t blanket tariffs that punish innovation economies alongside the behaviors they’re intended to correct. What’s needed is a more precise, predictable and collaborative approach — one that recognizes the complexity of the modern innovation economy.
We urge federal policymakers to include innovation leaders — especially from high-tech hubs like San Diego — in these conversations. National strategies must consider regional dynamics.
A tariff that sounds good in theory may have cascading consequences in practice when it affects the ability of a biotech firm to scale or a software company to meet its customer commitments.
San Diego has worked hard to build its reputation as a world-class innovation region. We’ve invested in research partnerships, talent retention, and startup growth. Tariffs that unintentionally kneecap these efforts are more than just an economic misstep — they threaten our global competitiveness.
It’s time to broaden the trade conversation to include the realities of today’s tech economy. The stakes are too high for a one-size-fits-all policy.
Carroll is executive director of Tech San Diego. He lives in Rancho Peñasquitos.
