Valley Vision

Dear Members and Friends,

Our March newsletter is exclusively devoted to coverage of the 2008 State of the Valley conference, held in San Jose on February 22. We’re delighted that more than 1,100 people gathered for a day spent in dialogue and discussion, including smaller break-out sessions.

We’re providing audio links to all of the plenary sessions here; we’re also pleased that our media partners at KQED and KTEH are rebroadcasting portions of the conference and preparing a 60-minute special report for prime-time viewing later this month.

But more than merely commentary, the day also featured musical performers, great food, and exhibits at the Kaiser Permanente Innovator’s Showcase. If you missed it, we hope you’ll make certain plans to join us next year when we do it all over again.


Russell Hancock
President and Chief Executive Officer

The 2008 State of the Valley Conference: Recap

More than 1,100 people packed McEnery Convention Center February 22 for the 2008 State of the Valley Conference, where ten information sessions filled a six-hour program. Keynote presentations featured FDIC Chair Sheila Bair on what the subprime mortgage crisis portends for Silicon Valley, and a wide-ranging dialogue on our region’s issues between Congresswoman Zoe Lofgren and Stanford economist John Taylor.

Interactive panel discussions on the future of the electric car industry and the role of professional sports in Silicon Valley drew strong interest from the audience, who used their cell phones to send questions to the stage or participate in live polling.

For the first time ever, State of the Valley also featured smaller, concurrent breakout sessions on select topics where Joint Venture is leading a project or initiative. These included panels on disaster preparedness (with California Insurance Commissioner Steve Poizner), health care, climate protection, and improving El Camino Real.

The luncheon also featured the presentation of the David Packard Award, Joint Venture’s highest honor, which this year went to Stanford Professor William F. Miller (who will be featured in our April newsletter).

In this issue:


The State of the Valley Conference coincides with the release of Joint Venture’s Silicon Valley Index, which received extensive coverage this year in the New York Times, the Wall Street Journal,, CNET, the San Jose Mercury News, the San Francisco Chronicle and the Sacramento Bee, among many others.

Doug Henton and Tracey Grose, who headed up the research team, briefed conference attendees on the major findings. Among these: Silicon Valley experienced a sixth consecutive year of productivity gains that surpassed previous highs from the dot-com boom. Venture funding, patent generation, and job growth were also extremely robust, exceeding state and national rates.

Yet the growth spurts are offset by some instability in the workforce, particularly in the mid-range professions where the Index documented a significant squeeze. Other troubling signs include an uptick in juvenile felony offenses, and falling graduation rates.

The briefing also included updates on housing, land-use, education, health, and other indicators.

Click here to download the entire report.

What Does the 2008 Index Tell Us About Our Opportunities and Challenges?

In a lively panel discussion moderated by the Mercury News’ Rebecca Salner, venture capitalist Tim Draper, Infinera CEO Jagdeep Singh, San Jose Mayor Chuck Reed and economist Stephen Levy offered their views on the most significant challenges facing the region. Workforce issues were paramount: the panelists agreed that globalization had intensified the competition for tech jobs in the middle-income range, and discussed ways the region can provide better opportunities for training and re-tooling. Levy pointed out that a wave of boomer retirements was opening up a spate of skilled jobs, but lamented that community colleges and other training programs are straining under the weight of excess demand. Jagdeep Singh and Tim Draper argued that the Valley’s economy was strong by most conventional measures, while allowing that the region can be “good for companies but hard on people.” In their view Silicon Valley was better poised to weather the recession settling in on the nation as a whole, because our companies are inventive, export-oriented, and used to adapting to new circumstances. Mayor Reed touted clean technology as the prime example of that.

Morning Keynote:

Implications for Silicon Valley and Beyond

In her morning keynote remarks, Sheila Bair, the chair of the Federal Deposit Insurance Corporation, called for more stringent regulations to prevent a repeat of the subprime mortgage crisis.

She also said the FDIC is urging lenders to slow down on foreclosures and focus on ways to modify or renegotiate existing loans. "In today's market, a policy of mass foreclosures is doing more damage," she explained.

Appointed to a five-year term as FDIC chair in 2006, Bair surmised housing prices will continue to decline across the country for quite awhile. "There's going to be more pain before we get through it," she argued, adding "but we will get through it."

(Click here to listen to Chairwoman Bair.)


A morning panel moderated by Mercury News cleantech and energy reporter Matt Nauman was a charged-up discussion among AC Propulsion CEO Tom Gage, General Motors executive Bryon Shaw and plug-in hybrid advocate Felix Kramer. They opined on why alternative carmakers are attracted to Silicon Valley and what the future holds for electric vehicles.

“We’re not going to take over China or Detroit, but every carmaker has an outpost in Silicon Valley and is watching what people are doing,” said Kramer, founder of nonprofit plug-in hybrid initiative CalCars. “This can be a real incubation area for new automotive technology.”

Gage pointed out his company’s all-electric Scion eBox gets 120 miles on one charge. AC Propulsion also supplies technology to Tesla Motors, and is locating a new office in Palo Alto in response to the interest in Silicon Valley in such technology."The driving public here is among the most enlightened in environmental and policy issues," he said.

Byron Shaw, managing director of the Advanced Technology Office at General Motors said GM plans to introduce the first rendition of the plug-in Chevy Volt in 2010 along with similar versions for the Saturn. He said that GM will also sell a bevy of alternative-fuel vehicles in the next decade, including electric cars, fuel cell cars, and vehicle-to-grid plug-ins.

Shaw and Kramer forecast that 20 years from now 80 percent of the cars on the road would be electric or plug-in hybrids. Gage was much more conservative in his estimate.


With two major professional sports franchises planning to migrate to the South Bay, Oakland A’s President Michael Crowley, San Francisco 49ers executive Jed York and San Jose Sharks CEO Greg Jamison took part in a morning panel discussion on the role of pro sports in Silicon Valley, moderated by public affairs expert and former Assemblyman Jim Cunneen.

The discussion covered everything from steroids to transportation options at the new stadiums, to the local economic impact of the franchises, and the way technology will alter the fan experience in the future.

Afternoon Keynote:

Structural Change, Occupational Shifts and Technology Innovation in a World of Uncertainty

The luncheon keynote presentation on our region’s role in the global economy featured a snappy dialogue between Congresswoman Zoe Lofgren and Stanford economist John Taylor, a member of the Council of Economic Advisors in the first Bush White House and a former Undersecretary of International Affairs in the U.S Treasury Department. The Wall Street Journal’s Kara Swisher moderated the discussion.

Speaking about potential threats to innovation, Rep. Lofgren, whose 16th District represents Silicon Valley, told the audience she believes foreign-born engineering, science, and math students in the United States should be automatically granted legal residency when they get a job in this country. Noting that some 56 percent of the doctoral candidates at the top U.S. schools are immigrants, she said many later leave the country because of the government's current immigration policy.

"We're not only not getting the benefit of the high-end math and engineering talent, but also we're forcing these people to other countries to compete with us and (forcing off shoring)," she said.

Taylor agreed with Lofgren, noting that of the 15 professors Stanford hires each year, all but one are foreign born.

Lofgren also predicted that Microsoft is likely to encounter an antitrust battle in Washington for its proposal to buy Yahoo! for $44.6 billion. “I’m pretty confident it will end up before the House Judiciary Committee,” she said, adding that she was reluctant to comment in detail on the takeover attempt.