June/July 2018 61
PHOTO COURTESY OF JOAN MARCUS
BY MOST ECONOMIC BAROMETERS, the Silicon Valley economy
is a rarified weather pattern, soaring high and dipping low to create
ideal conditions for robust growth.
The 2018 Silicon Valley Index released earlier this year shows
that the Valley—which encompasses all of Santa Clara and
San Mateo counties, and small corners of Alameda and Santa
Cruz counties—generated 47,000 new jobs between the second
quarters of 2016 and 2017. Venture capital investments neared
the $25 billion mark and inventors registered more than 19,000
patents in 2017. And it’s not just tech rocketing to new heights.
The construction industry, too, is booming. Close to 5.4 million
square feet of new office space was added to the market last year.
So much for the soaring part, but what about the dip? Most
notable is the region’s unemployment rate: 2.5 percent, the lowest
““Silicon Valley and San Francisco are like two superb jet
engines, one on the left and one on the right, one focused on
hardware and software, the other on the Internet and the sharing
economy,” said Russell Hancock, CEO of Joint Venture
Silicon Valley, the San Jose-based high-tech industry think tank
and advocacy organization that has produced the Silicon Valley
Index since 1995. “They are distinct but complementary. We
BIG TECH, KING OF
THE JUNGLE, LEAPED
TO NEW CONQUESTS
BY DAVID GOLL
have major growth in government, education, construction and
retail. But it is led by tech, which is growing especially in the
Internet, Cloud and applications sectors, and we are moving into
promising new areas like AI (Artificial Intelligence) and machine
learning.” Hancock touted the rise of such San Francisco-based
companies as Airbnb, SoFi and Uber that provide “platforms for
aggregation, sharing, delivery of a good or a service” as further evidence
of the Bay Area economy’s innovative and resilient nature.
There were nine IPOs during 2017, as in the previous year.
A difference in 2017 is that all but one of these IPOs involved
a technology company, in contrast to a more diverse group of
companies that went public in 2016.
STILL THE HIGH-TECH CENTER OF THE UNIVERSE
Projections of Silicon Valley’s demise, or at least its shrinking
high-tech dominance, have been greatly exaggerated, according
to Micah Weinberg, president of the Bay Area Council Economic
Institute, a San Francisco-based think tank dealing with economic
and policy issues facing Silicon Valley and the larger Bay Area.
“In the last several years, we’ve heard talk of Silicon Valley being
over, but the 2018 Silicon Valley Index puts the lie to that narrative,”
Weinberg said. “There are lots of other regions doing well
throughout the country, but that is as a result of Silicon Valley also
doing well, not in spite of it. People engage in zero-sum thinking
too often. They think that if things are going well in Columbus,
Ohio, then Silicon Valley must be losing.”