More pain and lost jobs are in store for Silicon Valley this year, but there's a ray of hope, Russell Hancock, president and CEO of Joint Venture: Silicon Valley Network, told attendees at a "State of Silicon Valley" conference this morning.
"It's got a lot of bad news in it," Hancock said of an economic-index report published by the Silicon Valley Community Foundation, co-sponsor of the annual conference, held this year at Parkside Hall in San Jose.
"There are stiff winds blowing out there, and national trends are catching up with us," Hancock said.
"If you've been conscious for the last 12 months, you know that the region is losing jobs," he said.
There has been a 1.3 percent increase in unemployment in 2008. Until October, the region was adding jobs, but crashed in November, Hancock said. Income disparity and predicted continued job loss spearhead what Hancock called "ominous trends."
The area wage distribution is increasingly taking on the configuration of an "hourglass economy," with 42 percent of the population earning $100,000 or more while most others earn less than $35,000. Middle-income earners comprise the narrow band of the hourglass shape.
"This has huge societal implications," especially in the are of sparse affordable housing for lower-income persons, Hancock said.
Only 29 percent of first-time homebuyers can afford a median-priced home in the valley, compared to 45 percent statewide. In 2008, there were 6,900 foreclosures in Silicon Valley, a 184 percent increase over the past year, Hancock said.
Yet the valley remains poised to emerge in a new and vibrant economy, the most promising of which is the "green and clean" industry, Hancock said.
"The seeds are in place for a major Silicon Valley comeback," he said.
There's been a quantum leap -- a 94 percent increase -- in clean-energy technologies in the valley, accounting for a 23 percent increase in jobs and a 29 percent increase in new businesses established in that category. Hancock said 50 percent of all patents in clean-and-green technologies were generated in Silicon Valley.
Clean transportation, green infrastructure and new materials are at the fore of the green economy. San Jose is the world's epicenter for solar technology, Hancock said. SV is also the leader in uses of these technologies, with a 59 percent increase in the use of solar.
Key questions, Hancock said, are whether Silicon Valley can make this transition and whether businesses can equip the workforce with the skills to grow the new technologies.