A Message about the 2026 Index

Dear Friends:

We remain a region in the throes of transition, rife with contradiction.

Our population is aging, our birth rate is historically low, and our rates of influx are off. Hiring practices in our driving industries now prioritize growth outside the region as much as within, and much of the local hiring requires an extremely rarefied skill set.

Our economy is somehow robust even though the headlines scream layoffs. There are mounting fears that would hang those layoffs on artificial intelligence, but there’s scant evidence, at least so far. What we do see is a complex cocktail of external factors (tumult in Washington, escalating tensions overseas, punishing rates) and internal ones (over-hiring during the pandemic, high housing prices) that have forced the brakes to the blistering pace we saw through the ‘teens.

In light of this, we should probably celebrate a regional economy that has mostly kept its place, absorbing 40,000 post-pandemic layoffs without any corresponding uptick in unemployment. If measured by productivity, revenues, profitability, or market cap, our companies are thriving. Our fabled innovation engine is as hot as it has ever been, generating $92 billion in venture capital and more angel activity than ever before. We have more patents, the highest concentration of unicorns, and we are undoubtedly the nation’s epicenter for AI.

But it’s really tense out there.

Many of our stressors are longstanding: disappointing educational outcomes, disparities by race, our staggering housing costs, the rise of homelessness, stagnating wages and a grotesque set of income and wealth gaps. But there are more recent developments that are equally concerning: transit staring at a fiscal cliff, inflation rates above the national average, workforce tensions in tech, and some very disturbing mental health trends (especially among the young).

Not surprisingly, we have seen manifestations of populist fervor here, as in other parts of the country. It’s being paired with a widespread distrust in tech, something unthinkable a generation ago.

Our challenge—and our opportunity—lies in managing the transitions ahead. Is the slowdown our chance to catch up? If we use thoughtful infill strategies to provide housing, will we come closer to meeting demand? Can we get ahead on our lagging infrastructure? Can AI amplify knowledge work rather than eliminate it? Can we design enough roles to make the resulting prosperity more widely shared? Can we create pipelines for those new roles and improve educational outcomes for our region’s youth?

As we transition it will be crucial to have the metrics at hand. We’re pleased to provide them.

Yours,

Russell Hancock
President & Chief Executive Officer
Joint Venture Silicon Valley
Silicon Valley Institute for Regional Studies