San Jose — Silicon Valley added more than 30,000 jobs over the last year’s total, per capita income increased, average pay rose, and value-added per worker showed significant gains.
So says the 2007 Silicon Valley Index, a 60-page report to be released by Joint Venture: Silicon Valley Network at its annual State of the Valley conference February 2nd. Google CEO Eric Schmidt and former Vice President Al Gore will keynote the conference, which also features panel discussions on globalization, and Silicon Valley’s role in America’s energy future.
“Silicon Valley has entered a new phase in its dynamic evolution,” said Russell Hancock, Joint Venture’s President and CEO. “Last year we saw the first evidence the downturn was behind us. This year we see quite clearly that Silicon Valley has done it again—we’ve reinvented ourselves. Venture capital is moving into promising new areas like renewable energy and clean technology, our innovation has carried into Web 2.0 and other new forms of media, and our employment gains are broadly based, spanning most sectors of the economy and not just our driving industry clusters.”
The report shows Silicon Valley commands a large and growing share of all US venture capital investment (more than 28 percent), and that investments in clean technology have reached $300 million annually (a 900% increase) — making the Valley the nation’s prime spot for innovation in energy alternatives. The report also shows Silicon Valley’s population is growing and becoming more global in character, with 40 percent of the workforce born outside the United States, and 48 percent of the region’s population speaking a language other than English in the home. This means Silicon Valley has supplanted Los Angeles as California’s most ethnically diverse region, and is now second nationally, behind Miami.
In a “special analysis” section the report argues that Silicon Valley’s diverse ethnic composition will be its chief asset in the global marketplace, where new technology regions in Asia, Israel, and Europe are emerging as competitors and collaborators.
But the region faces significant challenges, warns Hancock in his introduction to the report. “Most of these challenges are old and familiar,” he writes. “The portion of residents unable to afford median-level housing is increasing. Health care availability shows troubling disparities by race. Too many are unprepared to compete in today’s economy. Our educational institutions are straining under the demands heaped upon them. It’s alarming to see juvenile crime on the increase.”
According to the report, the percentage of first-time home buyers who can afford the median-priced home is 26 percent, down from 31 percent in 2005. The high school graduation rate dropped 3 percent to 86 percent across Silicon Valley, the lowest level since 1998. Drop-out rates increased by 1 percent for all ethnic groups except Hispanics. The share of third graders reading at or above median, however, grew by 3 percent. Juvenile felony offenses per capita (per 100,000) increased to 1,034, up from 902 in the previous year.
According to Hancock, “we are growing as a global center for creativity in business and technology, defining our advantage by being creators of new products, services, companies and business models. This is a fundamental restructuring, away from the old manufacturing model toward a new idea economy. We can see it happening very clearly, and our region’s companies are taking full advantage.”
Hancock concludes: “The question for Silicon Valley is whether there will be broad participation in these activities—particularly for the rising generation—or whether we’re looking at a future where our companies prosper through their global networks but the region doesn’t feel better off.”