> > The Post-Post Bubble Valley > New report says Silicon Valleys economy looking up; affordable > housing remains an issue. > January 31, 2007 > By Alexandra Berzon > http://www.redherring.com/Article.aspx?a=21055&hed=The+Post- > PostBubble+Valley > > > > Full report at: > http://www.jointventure.org/publicatons/index/2007%20Index/The% > 202007%20Index%20of%20Silicon%20Valley.pdf > > > > The Silicon Valley is clawing its way back. And this time, observers > say, the good times could last for a while. > > The Valley created 33,000 new jobs between the second quarters of > 2005 and 2006a gain of 2.9 percent. Thats the first significant > employment increase since 2001. The numbers come from a new report on > the Valleys economic outlook, to be released Friday by the Joint > Venture Silicon Valley Network, a non-profit organization funded by > local governments and businesses. > > But with its cheery outlook on the Silicon Valleys economic picture, > the new report echoes figures published six years ago when strong > numbers did little to foretell the fall ahead. But this time around, > the reports authors say, it could be different. > > The organization has produced the economic outlook index for the > Valley every year since the mid-90s, and hadnt had much good news to > report in a while. Between 2000 and 2005, 220,000 jobs were lost in > the Valley. Every year people said, Whats happening to the Valley? > Have we lost our magic? Are we going to be the next Pittsburgh? > said Silicon Valley Network CEO Russell Hancock. > > In retrospect, said Mr. Hancock, the bubble should have been > apparent. Too much money was being thrown at investments in one area: > the Internet. > > Now, Mr. Hancock said there are some indicators that the growth might > just stick around for a while. Whats different now is a dispersal of > investment to different types of high-tech industries including > online and wireless entertainment companies, wireless infrastructure > technology, biotechnology, and nanotechnology. An area of emerging > interest is clean technology, where there was a surge of investment > up 266 percent between 2005 and 2006. Im not seeing the hype and > the prodigious amount of activity, said Mr. Hancock. What Im > seeing instead feels more thought out. > > The greatest job growth was in the area of software, which saw an > increase of 4,919 jobs. While Internet companies attracted > investment, total jobs in that area lagged because so many Web 2.0 > companies operate with small staffs, said Mr. Hancock. > > Job losses were felt in computer and communications hardware > manufacturing, with a decline of 1,253 jobs. At the same time, > hardware manufacturing wages were up 15 percent, which Mr. Hancock > said is because the manufacturing jobs that do stay in the Valley are > increasingly high-skilled. > > Those numbers present a clear indication of the increasing influence > of globalization and outsourcing in the Valley. That, coupled with a > lack of affordable housing, has meant the Valley becoming a place > where large companies house their headquarters, while basing nitty- > gritty operations elsewhere. > > The number of affordable housing units built in 2006 was the lowest > since the survey began, Meanwhile, rental prices rose five percent > the first increase since 2002. The number of first-time homebuyers > able to afford a median-priced home dropped from 44 percent in 2003 > to 26 percent in 2006, roughly in line with California trends. > > What were finding in the Silicon Valley is there are lots of start- > ups, we do that well. And we have established companies that hollow > out and the headquarters stay here, said Mr. Hancock. But what we > dont do really well is mid-level company and mid-level employees. > People get to that point and cant pay what they need to for the > housing so they go off to Colorado, and then they hit senior > management and come back to the Silicon Valley. Im not sure thats > healthy. > > Heres a sample of other findings from the report: > > *Immigration to the Silicon Valley is increasing at a rapid clip. > Forty-eight percent of the Valley speaks a language other than > English at home. Over half (55 percent) of the science and > engineering workers in the Valley in 2005 were born abroad, compared > to 20 percent in the U.S. as a whole. Across all occupations, 43 > percent of Valley workers were born abroad, compared to 16 percent of > U.S. workers. Total population in the region went up 1.28 percent > between 2005 and 2006. > > *Six of the top 10 U.S. cities for patent requests in 2005 are > located in the Silicon Valley. Eleven percent of all U.S. patents > were issued to Silicon Valley companies. > > *Venture capital investment in the Silicon Valley for the the first > three quarters of the 2006 was $5.2 billion, up from $4.6 billion for > the same period in 2005. Thats still far below the peak of over $20 > billion for the year in 2000. > > *Silicon Valley receives 14 percent of the worlds venture capital, > roughly comparable to the entire United Kingdom. > > *Between 2004 and 2005, the Silicon Valley saw its first median > household income increase since 2001up 6.5 percent. > >
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