News Releases

The 2009 Index of Silicon Valley

Annual report finds recession catching up to Silicon Valley, green economy offers new opportunities for growth; special analysis on employment warns valley is unprepared to meet workforce needs

SAN JOSE and MOUNTAIN VIEW, Calif. –February 17, 2009 – The global financial collapse and national mortgage crisis have finally caught up to Silicon Valley, but the region can rebound as a leader in clean technology innovation, according to the 2009 Silicon Valley Index released today by Joint Venture: Silicon Valley Network and Silicon Valley Community Foundation.

In a companion Special Analysis to the annual report on Silicon Valley’s economic health, researchers probing economic restructuring and workforce transitions cautioned that the region is currently not producing enough talent to meet its workforce needs in the next decade as the industry mix changes and new skills are needed.

While home foreclosures, economic instability and the year-end spike in job losses have wracked Silicon Valley, investment in clean technology grew 94 percent and jobs in the sector rose 23 percent since 2005, raising hopes for economic recovery through innovation in green technology and new, related business models.

“Our economic challenges are greater than they have been in years,” said Russell Hancock, president and CEO of Joint Venture. “At the same time, we have become a magnet for green innovation and a new epicenter for solar technology. New technologies and employment in the green sector may help offset the Valley’s economic woes.”

However, Silicon Valley also must begin addressing the challenges to the systems that support people who work and live in the region and are essential to its ability to continue innovating.
“Investing in and rebuilding our region’s social infrastructure is vital to sustain the innovation economy that has made Silicon Valley a national model,” said Emmett D. Carson, Ph.D., CEO and President of Silicon Valley Community Foundation. “We need a strong system of workforce development to support adult worker retraining and transition. The cost of inaction will undermine the region’s innovative capacity and overall competitiveness and with it, our regional prosperity and quality of life.”

This year’s Special Analysis examines the impact economic changes are having on the region’s communities and highlights the need for a strong system of workforce development and safety net programs.

The Silicon Valley Index, published annually since 1995, measures the strength of the region’s economy and the health of the community. It coincides with Joint Venture’s annual “State of the Valley” conference, sponsored by the Community Foundation, to be held on February 20 at Parkside Hall in San Jose. Keynote speakers this year include electric car entrepreneur Shai Agassi and Newsweek International editor Fareed Zakaria.

The Index, which includes data from all of San Mateo County this year for the first time, reports its findings in five major sections: People (talent flows, diversity); Economy (innovation, employment, income); Society (preparing for economic success, early education, arts and culture, health, safety); Place (environment, land use, housing, commercial space); and Governance (civic engagement, revenue).

Among the highlights in this year’s Index and Special Analysis:

  • Silicon Valley’s population grew 1.6% in 2008, and continued to surpass the state’s growth rate of 1.2%. Foreign immigration witnessed a net increase of 27% in 2008.
  • After holding steady until October, employment of residents in the region began to drop in November. The San Jose-Sunnyvale-Santa Clara Metropolitan Statistical Area posted a 1.3% drop in December 2008 over December of the previous year.
  • Clean technology and related businesses have increased in number by 29% since 1995. This sector has seen 88% job growth since 1995 and 23% just since 2005. Job growth since 2005 has been strongest in Green Building (424%), Transportation (140%) and Advanced Materials (54%).
  • Investment in cleantech in Silicon Valley increased 94% from 2007 – valuing almost $1.9 billion in 2008. In 2007, Silicon Valley alone accounted for 55% of California and 31% of U.S. investment.  The bulk of this investment was in energy generation followed by energy infrastructure.
  • After rising steadily since 2005, total venture capital investment in Silicon Valley dropped 7.7% from 2007 to 2008. Nationwide, investment dropped 11.4%. While investment is slowing, Silicon Valley continues to account for 29% of total U.S. VC investment.
  • Silicon Valley’s contributions to art and cultural organizations as a proportion of the region’s income ranks far below that of leading U.S. metropolitan areas—and only about half the average of the top twenty metropolitan areas by population.
  • Silicon Valley residents have been driving fewer miles since 2002, and vehicle miles of travel per capita dropped 2% between 2006 and 2007. The number of new registrations for gasoline-powered cars in Silicon Valley has dropped by a quarter since the beginning of the decade.
  • Silicon Valley is on the forefront of alternative fuel vehicles—particularly hybrids.  The region now accounts for 15% of newly registered hybrids, 10% of electric, and 5% of natural gas vehicles in California.  Alternative fuel vehicles now comprise 3.4% of all newly registered vehicles in Silicon Valley—up from very few vehicles (0.11%) in 2000.
  • Home foreclosure sales went up faster in Silicon Valley (184%) than California as a whole (126%) in 2008. The number of foreclosure sales rose from 2,429 in 2007 to 6,900 in 2008.
  • In housing affordability, Silicon Valley has now become the least affordable region for housing in California—with less than 30% of first-time homebuyers able to afford a median-priced home.  After a large increase in apartment rental rates of 7.8% between 2006 and 2007, rates rose only 2% between 2007 and 2008.
  • The number of homeless people in Santa Clara County decreased from 7,491 in 2005 to 7,202 in 2007.
  • Silicon Valley needs to fill 30,000 jobs annually until 2016, particularly in population-driven industries such as health services, education, retail, transportation, government administration and other local serving industries.
  • In the past decade, employment at companies with payroll has dropped 5 percent while the number of nonemployers grew 21 percent, illustrating a structural change in the nature of employment.
  • Silicon Valley’s demand for commercial real estate dropped precipitously in the last quarter of 2008. The net change in occupied space (absorption rate) entered negative territory for the first time in four years with a net loss of 7.6 million occupied square feet.
  • Since 2000, Silicon Valley voters have approved 81% of all local bond measures, including county, city and school district measures.
  • Up 10% from the last general election in 2004, 83% of Silicon Valley’s registered voters came to the polls; statewide, 79% of eligible voters cast ballots, 7% more than in 2004.

Media Contact

Duffy Jennings

Vice President, Communications
Joint Venture Silicon Valley


(408) 298-9337 direct
(408) 896-6900 cell

Media Kit

News Coverage

Joint Venture's initiatives, publications, events and regional expertise receive frequent coverage in the national and local news media. Our staff is always available to comment on economic trends in Silicon Valley.

View news coverage.