The 2009 Special Analysis examines the fundamental economic changes taking place in Silicon Valley and their impact on our community.
As in years past, the Special Analysis is a core piece of the Index of Silicon Valley, and this year, it exists also as a stand-alone document. The expectation is that given the enormity of the issues especially in the context of the current economic climate, the findings and questions presented here will provoke serious discussion and action in the community that will continue long after the State of the Valley Conference.
Our conclusion: Silicon Valley’s “people and place” policies must evolve to help the region’s employers and educational institutions learn, adapt, and reorganize to maintain a thriving regional “habitat” for living and working in the global marketplace. The cost of inaction will undermine the region’s innovative capacity and overall competitiveness and with it, our regional prosperity and quality of life.
- Silicon Valley’s industry mix is changing as some industries grow, others contract, and new industries emerge.
- Sustaining Silicon Valley’s innovative economy is not possible without the people who maintain the region’s community infrastructure.
- Silicon Valley is not currently prepared to meet its projected workforce needs for 2016. The region is not producing enough talent with the necessary skills to fill the large volume of replacement jobs opening in community infrastructure and in high tech. It will not be able to meet these needs by importing workers from abroad and other states.
- The growing mismatch of jobs and skills will result in income polarization in which the tight supply of highly skilled workers will command premium wages and the surplus of lower-skilled workers will experience wage erosion.
- Silicon Valley needs a robust system of workforce development and safety net programs – one that supports adult worker retraining and transition in addition to improving the education of today’s young people.
Silicon Valley’s economy is transforming, and the region needs to re-examine how well its “people and place” policies can cultivate a thriving space for living and working in this changing context.