9-year expansion adds more jobs, new levels of productivity, VC megadeals, record amounts of commercial space.
Yet fewer start-ups see funding, and inequality reaches new dimensions. Transportation and housing woes persist.
February 12, 2020 — The 2020 Silicon Valley Index, released today by Joint Venture Silicon Valley’s Institute for Regional Studies, shows that Silicon Valley continues its upward spiral with employment growth, eye-popping land transactions, and venture capital flowing into record numbers of megadeals.
The latest Index also shows that conditions are harsh for the broad peripheries of the population as inequality reaches new dimensions. In the private sector, new-found scale and consolidation are starting to alter some features of the innovation ecosystem, and for three consecutive years more people are leaving the region than coming in.
“The granularity of migration data in this year’s Index is eye opening – we’re essentially turning over our population by nearly 5% every year, with the influx of foreign immigrants increasing our region’s diversity and tech talent base,” said Rachel Massaro Joint Venture Vice President and Director of Research for the Institute. “We also got a much better sense of where our outgoing residents are going.”
“Silicon Valley enjoys thriving businesses, a deep talent pool, and record-breaking megadeals. Yet we live with scorching home prices and creaking infrastructure,” said Russell Hancock, CEO of Joint Venture and President of the Institute. “While the Bay Area added 821,000 new jobs since the recession, we only permitted 173,000 new housing units, a discrepancy of five to one.”
Despite efforts to provide relief, 11,200 people across San Mateo and Santa Clara counties are homeless, including more than 1,000 children. Thirty percent of residents are not meeting self-sufficiency standards, just as the cost of goods and services has risen by 2.7% in the past year.
Key Findings
Employment: At 2.1%, the unemployment rate reached a 19-year low and the region added nearly 30,000 new jobs, outpacing the state and the nation. Regional GDP increased by $17 billion in 2019. Labor productivity reached a record $241,000 in value added per worker, a 53% increase since 2001.
Housing: With the median home price above $1 million and the highest in the nation, housing remains unaffordable to most. A greater number of affordable housing units were approved (3,258) than in the past 20 years at greater density than for any year on record. Eighty-three percent of permits issued in the past four years were unaffordable to most buyers and renters.
Income: Costs are rising,and income and wealth inequality are more pronounced than ever. Wealth inequality is at a historic high as 13% of households hold more than 75% of the region’s wealth. Thirteen percent of households have more than $1 million in net assets, while 37% have less than $25,000 in savings.
Commercial space: Newly-completed commercial space hit an 18-year high, reaching 8.5 million square feet. The total amount of commercial space under construction reached a new high at 14.8 million square feet in Q2. A resurgence in hotel development brought 36 new hotels since 2014 and more to come.
Investment: $42 billion in venture capital was invested in Silicon Valley and San Francisco companies, including a record 92 megadeals. Automotive and transport industries emerged as new targets for investments while 22 local companies made their debut on the publicly traded markets.
Population: More people are leaving the region than coming in, with the expansion fueled by foreign-born talent. Though the tech workforce is largely young and male, older workers are remaining in the labor force longer and women – though still underrepresented in numerous sectors – are increasing in number.
Trends of Interest
Internet speeds. Average internet upload speeds were slow compared to San Francisco, California, and the nation as a whole.
Health. The rate of deaths caused by hypertension and hypertensive renal disease increased by 270% since 1999. Adult obesity increased from 17% to 24%, and to 27% for those below the poverty line.
Philanthropy. There are nearly 1,800 foundations in Silicon Valley with $65 billion in total assets. The top 50 corporate philanthropists donated $186 million to local organizations in 2018.
Cleantech. Community choice energy programs now serve 89% of residential electricity customers and 69% of commercial, reducing carbon dioxide emissions from electricity use by 64%. Installed solar photovoltaic systems totaled 550 megawatts in 2019 – twice what it was four years ago.
The complete 2020 Silicon Valley Index is accessible online at www.siliconvalleyindicators.org and may be downloaded from the Joint Venture website.
About Joint Venture Silicon Valley
Established in 1993, Joint Venture provides analysis and action on issues affecting the Silicon Valley economy and quality of life. The organization brings together established and emerging leaders—from business, government, academia, labor and the broader community—to spotlight issues, launch projects and work toward innovative solutions. For more information, visit www.jointventure.org.
About the Silicon Valley Institute for Regional Studies
The Silicon Valley Institute for Regional Studies provides research and analysis on a host of issues facing Silicon Valley’s economy and society. The Institute is housed within Joint Venture Silicon Valley. For more information, visit www.SiliconValleyIndicators.org.
