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South Bay Accent - Jun/Jul 2016

In short, our high-tech capital—the region encompassing Santa Clara, San Mateo, southern Alameda and northern Santa Cruz counties—is outperforming rival tech centers around the world. The more than 3.1 million square feet of office space in the region last year was the highest level since 2001. The amount of commercial expansion approved in the area during 2014 and 2015—more than 23 million square feet—is almost as much as was given the green light during the five previous years combined. And surprisingly, rates of poverty declined last year compared to 2014 to 8.1 percent of the population of Santa Clara and San Mateo counties. While troubling, the 8.9 percent rate of childhood poverty in Santa Clara and San Mateo counties is significantly lower than in San Francisco, the state of California and the nation as a whole. But as might be expected, those with longer memories that extend back 15 or so years to the dotcom bubble’s bursting are also waving a few red flags of warning. Hancock’s Joint Venture Silicon Valley—a consortium of business, government, labor and community leaders that seeks to influence public policy—and the Silicon Valley Competitiveness and Innovation Project, produced by a group of more than 400 local employers, temper optimism with caution and concern. They see a figurative smudge of smog dimming views from the hills and mountains ringing the Valley. In their opinion, ever-worsening traffic congestion, soaring home prices and rents that make the Silicon Valley and Bay Area the least affordable housing market in the nation, and a patchwork educational system that produces a dramatically uneven career playing field for local youngsters register among the more intractable dilemmas facing government and the business community. They are quick to point out that the median sale price for a home in Silicon Valley last year was $830,000, compared to a nationwide median of $223,000. “Housing is not affordable for a lot of people here,” says Hancock. “It’s usually not affordable for nurses, firefighters and teachers, but now it’s becoming unaffordable even for people in the professional class, including doctors and lawyers. It puts employers in a bad position. It’s a problem when it comes to building companies here.” That said, for established businesses and their employees, particularly in the region’s dominant high-tech sector, the present is clearly positive. According to the Index, job growth is accelerating, increasing 4.3 percent in 2015 compared to a year earlier, surpassing pre-recession levels. At 3.6 percent last year, unemployment in the region was significantly below the 5.7 percent rate for the state overall. Stephen Levy, director and senior economist for the Palo Altobased Center for the Continuing Study of the California Economy, believes the unprecedented prosperity of Silicon Valley’s tech behemoths—the likes of Apple Inc., Google Inc., Facebook Inc. and others—is driving the region’s gaudy success. “We are in the middle of this enormous continuing job surge,” Levy says. “Some are saying there is a tech bubble, but Silicon Valley is not a stock market for startups. It’s those big companies and their many millions of customers that are responsible.” Levy says it’s inevitable that not everyone is sharing in the wealth. Still, he adds, poverty rates and unemployment rates are actually getting lower. “People of color are doing better here now than 10 years ago.” 46 South Bay Accent He, too, worries about the infamous cost of housing in Silicon Valley and environs. “What is a newer and worsening problem here is that our transportation and housing infrastructure has not kept up with the huge numbers of people who have come here for jobs. If we cannot house people or people can’t move here because of the lack of housing or price of housing, it will eventually reduce our competitiveness.” Despite big increases in public transportation ridership, Levy concludes, traffic congestion is only getting worse. Silicon Valley Leadership Group’s president and CEO Carl Guardino echoes Levy’s praise for the area’s continuing success, noting the Leadership survey’s findings that track the creation of new jobs and technology, and growing levels of 2015 venture capital investment. “But it can all be jeopardized by becoming complacent and thinking things will remain the same,” he says. “The way you create a successful future is by working every day to improve your weaknesses. It’s foolhardy to assume success will continue on its own.” Long a booster of the unique convergence of industry, education, innovation and geography that has created Silicon Valley, Guardino oversees an organization whose report measures no less than 22 areas to gauge how the Bay Area’s tech sector stacks up against other tech centers nationally and worldwide. Its findings: Silicon Valley is still the global leader in launching and supporting the development of new businesses and technology. New York, Los Angeles, Boston and London follow, in that order. However, as the report notes, China and South Korea are increasing their investments in research and development at a far faster rate than the U.S. Also, Bay Area universities are awarding fewer degrees in the so-called STEM subjects (science, technology, engineering and math) than other tech centers worldwide. And that’s not the only problem: Less than half of Silicon Valley’s eighth-graders met or exceeded new state math standards in 2015.


South Bay Accent - Jun/Jul 2016
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