News

Pain and hope in store for Silicon Valley

'State of the Valley' conference outlines challenges and potential for area's economic future

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.

Related stories:

o 'Green industry' offers hope for Silicon Valley

What is democracy worth to you?
Support local journalism.

Comments

Like this comment
Posted by Bob
a resident of Mountain View
on Feb 20, 2009 at 10:29 am

"Only 29% of first time home buyers can afford a medium priced home in the valley" What ever happened to starting at the bottom with an entry level home the can afford?


Like this comment
Posted by resident
a resident of Leland Manor/Garland Drive
on Feb 20, 2009 at 10:49 am

The legislators raised income and sales taxes with this, and they want to make it easier for themselves.


Like this comment
Posted by George K.
a resident of Mountain View
on Feb 20, 2009 at 12:25 pm

MEDIAN-priced. Not MEDIUM-priced.


Like this comment
Posted by Rob
a resident of Woodside
on Feb 20, 2009 at 1:44 pm

What's the deal with silicon valley people always getting hyped up, thinking they will become millionares/billionares in a matter of hours or days? It's like they are running a marathon and starting off at 5k pace, only to fall flat on their faces, gasping for air at mile 5. These people are only entertaining on TV shows like house flipper and hot chicks of LA.

What happened to normal people who are into long-term conservative growth? Pace yer selves please.


Like this comment
Posted by Mike
a resident of University South
on Feb 22, 2009 at 9:05 pm

Would fewer jobs in Palo Alto be a bad thing?


Like this comment
Posted by Darrell
a resident of another community
on Mar 9, 2009 at 1:27 pm

The key item in the median priced homes debate was the fact that 45% outside of Silicon Valley could afford to purchase a home, vs. less than 30% here in Silicon Valley. That translates into 50% (of this group) not being able to afford a home vs., those living out of the area (two.nine out of ten vs. four.five out of ten). And that's with home prices being reduced significantly over the last year. So the aspect of affordability is still a major issue. I know, my wife and I have two grown sons who would love to get into the housing market and are in this group -- could afford one if they lived out of the area, but cannot afford it near Silicon Valley.

Thanks for listening.


Like this comment
Posted by OhlonePar
a resident of Duveneck/St. Francis
on Mar 9, 2009 at 1:36 pm

It's very either/or here. You're either well off to be in a safe area with good schools or you're in a high-crime area with poor schools. I have friends in the narrow middle and it's a real scramble--can't afford to move to the good districts, so they try to afford private schools. And it's not really that easy if you bring in $100K.

Wasn't like this even 20 years ago--places like Sunnyvale were very mid-level and south Palo Alto had a bunch of small, but relatively affordable houses. There were rich enclaves here, but there was a lot of variety in the city as a whole.


Sorry, but further commenting on this topic has been closed.

Stay informed

Get daily headlines sent straight to your inbox.

Su Hong 2.0? Former waiter reopens Chinese standby under new name in Palo Alto
By Elena Kadvany | 7 comments | 4,159 views

Living as Roommates? Not Having Much Sex?
By Chandrama Anderson | 1 comment | 1,677 views

What gives you hope?
By Sherry Listgarten | 4 comments | 1,493 views

Do city officials ever consider giving taxpayers a break?
By Diana Diamond | 19 comments | 1,472 views

Expert witnesses are more than experts. Plus my 7 fundamental impeachment questions
By Douglas Moran | 17 comments | 1,375 views

 

Palo Alto Weekly Holiday Fund

For the last 26 years, the Palo Alto Weekly Holiday Fund has given away more than $7 million to local nonprofits serving children and families. When you make a donation, every dollar is automatically doubled, and 100% of the funds go directly to local programs. It’s a great way to ensure your charitable donations are working at home.

DONATE HERE