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About this blog: I grew up in Los Angeles and moved to the area in 1963 when I started graduate school at Stanford. Nancy and I were married in 1977 and we lived for nearly 30 years in the Duveneck school area. Our children went to Paly. We moved ...  (More)

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2014 Silicon Valley Index

Uploaded: Feb 5, 2014
Each year Joint Venture Silicon Valley and the Silicon Valley Community Foundation publish an Index of economic, social and other indicators for the Silicon Valley region that includes Santa Clara and San Mateo counties and a few neighboring cities. The 2014 Index was released yesterday. The Index, news release and accompanying information are available at Web Link.

The highlights are a combination of very good news, continuing areas of disappointment and new challenges from the sizzling growth in the Valley.

Job growth in Silicon Valley is surging with 46,665 added jobs or 3.4% growth in the past year and today the Bureau of Labor Statistics noted that the San Jose metro area where Palo Alto is located was the nation's fastest growing major metro area for job growth in the year ending December 2013. The Index notes continuing gains in patents, venture capital and IPOs. This growth as readers know well has pushed home prices and rents to record levels in many communities and is causing near gridlock on many roads at peak commute times.

At the same time wage growth for many workers not in the tech economy remain stagnant despite job growth and reductions in unemployment. This has contributed to a widening gap between top earners and others—a trend that is not unique to Silicon Valley but which persists across decades and regions in the United States.

The Index also notes that still many children do not read or do math at appropriate grade level and high school graduation rates and achievement, while improving slowly, still leave far too many without the skills needed for higher education or a good job. And the high rents make it difficult for many, not just lower income households to live in the region.

Russ Hancock, President of Joint Venture, said "A surge of innovation between San Jose and San Francisco is driving prodigious growth from Market Street to Market Street, but with that comes with tough new challenges in housing, transportation and infrastructure for the entire region". Emmett Carson, President of the Community Foundation, said "This year's Index proves that a rising tide does not lift all boats" and these results call for "intentional public policies" to address the challenges of growth.

Here is my take. I agree with all three points: 1) the economy IS sizzling, 2) a rising tide does not lift all boats and 3) growth brings challenges in housing, transportation and other areas of our life. With most of the press coverage focusing on the people left behind in the surge of job growth, I want to focus attention on three other points.

One, while a rising tide has not lifted all boats—here or elsewhere in the nation—it certainly has helped to reduce unemployment and create rising state and local revenue that will help in addressing education and infrastructure deficiencies. Moreover, it is hard to see how much progress can be made n helping mobility for low and moderate wage workers without continuing economic growth. It is not sufficient by itself but is a necessary piece of the solution.

Two, Hancock and Carson were clear that the Index points to the need to increase opportunity and NOT to disparage or take away from the income and job gains that the tech surge has created.

Three, and the most important from my perspective, these two goals are CONNECTED. More housing options for all residents, better investment in our roads and public transit such as CalTrain and BART and improving K-12 and pre-school opportunities serve DOUBLE DUTY in supporting broad economic growth in the Valley and increasing economic opportunities for residents.

I think the issues raised by the Index are an important part of our upcoming discussions in Palo Alto about planning for our future.

I serve on Joint Venture's Silicon Valley Institute for Regional Studies board and assisted in the preparation of the Index—both activities in a volunteer capacity.

Comments

 +  Like this comment
Posted by Wayne Martin, a resident of Fairmeadow,
on Feb 5, 2014 at 1:06 pm

A lot of data to absorb in one sitting.

One obvious "datapoint" that needs comment is the following—

> The Index also notes that still many children do not read or
> do math at appropriate grade level and high school graduation
> rates and achievement

This is a biased representation of the data about educational attainment in the SV. The raw data from the CA DoEd, when processed, shows that the API (Academic Performance Index) for Santa Clara County is about the highest in the state. To be sure, there are low points for APIs here—but the comment in the Index does not seem to give credit to the high performance of the Valley schools, in general. The fact that there is low performance for some (note the actual lack of hard data to make the SVI's point) needs to be discussed in light of the Valley's high performance.

The Index also does not seem to want to link the high performance of Santa Clara County students to their parents' academic performance—which seems to be common, where people promoting more government spending is concerned.

Another troubling point is the belief that everyone who enters the public schools should go to college. Clearly, college is not for everyone—no matter how noble the belief that education should be the primary goal of the State. We are seeing a failure rate of about 50% in the nation's schools. Some of the CSU colleges have actually posted graduation rates of 4%-6% for students in a 4-year degree track. It is really hard to see the value of pushing everyone into this career path.

Another data point missing was the GDP generated in the Silicon Valley. I recently found a Wiki-page that claimed that the San Francisco Bay Area generated about $550B. It would be nice to see a breakdown of the regional GDP by county.

One last point—it's a shame that this data is released only in .pdf format. The authors should also make this data available in .xls, or .csv, format for further use by interested parties.


 +  Like this comment
Posted by stephen levy, a resident of University South,
on Feb 6, 2014 at 3:01 pm

stephen levy is a registered user.

The purpose of the Index is to provide information and not to make policy recommendations. So these suggestions are mine.

There are two sets of policies that can improve conditions for large numbers of residents whose wages have not been growing and for their children AND at the same time provide a foundation for future economic prosperity in Silicon Valley.

One set is about education. My mom ran a business that made little girl's blouses and dresses (back when girls wore dresses) and she always said "We are only as good as our next season". But the good part is that there always was a next season--a next chance.

Our children are our "next season". However difficult it is to help residents now in the workforce with education, language, digital literacy or other barriers, we should be able to find ways to help their children. Yes, that will take money but along with money, we need Silicon Valley innovation to do a better job with what we have--by using technology, by finding ways to engage parents and motivate kids, with charter schools and preschools.

By the way that will also help prepare the workers we need to replace retiring baby boomers.

The second set of policies is to make it legal and easier for unauthorized immigrants who are here to use their skills and acquire more skills. There are roughly 300,000 unauthorized immigrants in the Bay Area workforce and a smaller but sizable number in school. It is a mistake to waste their skills and potential. They lose and we lose.

These are just two examples of strategies that can serve both goals--helping people not making economic progress AND supporting continued competitiveness and prosperity in the region.

Footnote--Wayne Martin was wrong on a bunch of points in his post above. The Index and my initial post do acknowledge that progress is being made in academic achievement in our schools. That in no way contradicts that the numbers who do not graduate or have good skills is still fart too large. And both Joint Venture and the Community Foundation support efforts to develop pathways and excite students who may not go to a four year college or any college at all.

I serve on the local and state workforce boards and we do not presume or think that every student should go to college. On the other hand most if not all high school students will benefit from some post secondary education or training from apprenticeship to a community college skill-based credential.


 +  Like this comment
Posted by Garrett, a resident of another community,
on Feb 11, 2014 at 9:45 pm

Even though it hasn't lifted my boat, I am not employed or even involved in the computer industry. No connection in anyway expect some of the stocks I have been purchasing over the last few years.

Strong Silicon Valley is good, kids go to college, get a degree and come here. I don't see anything wrong with this, work hard, do good. I am liberal minded person but I support people going in business, we need to build housing for all these young people coming here.

We need to keep Silicon Valley going.



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