Title: 81 percent high school diploma 40 percent college degree .
1-
- Silicon Valley
- Opportunities Challenges
- Russell Hancock
- President Chief Executive Officer
- Alameda County Library Foundation
- 24 October 2008
2 3The Valleys Distinguishing Features
- 1,500 square miles
- 40 Cities, 4 counties
- 2.6 million people, 42 percent foreign born
- 1.3 million workers
- 81 percent high school diploma 40 percent
college degree - 25 percent of workforce in high-skill occupations
- Income average 60 percent higher than US
- 6 percent US GNP, 11 percent of US patents
- Productivity rate growing 50 higher than US
average
4But our most important characteristic
Is that we keep reinventing ourselves!
5Milestone Silicon Valley Innovations
6Top Patent-Generating Cities, 2007
Source Joint Venture Silicon Valley Network,
2007 Silicon Valley Index
7- However, the Valleys edge doesnt stem from
innovation alone
8 but also from entrepreneurship
- Silicon Valley has a remarkable capacity to
create and grow new companies - New Companies New Technologies
- (Entrepreneurship)
(Innovation) -
- Endogenous Growth
- New Wealth Creation
?
9The Valley spawns the leading companies in every
technology generation
10Largest Silicon Valley Firms
11Largest Detroit Firms?
12Technology Regions Will Always Experience
Boom-Bust Cycle
- New technologies drive dynamic waves
- Entrepreneurs take advantage of new opportunities
- Swarms of new firms cluster around new
technologies creating short term bubbles
- New products eventually become commodities and
investment leads to breaking of bubbles.
- New technologies emerge from the convergence of
old technologies and the process of creative
destruction begins again
13- SILICON VALLEY LOSING ITS EDGE. Cover Story,
Business Week. - DREAMS OF STRIKING IT RICH FADING IN SILICON
VALLEY. Front page, Los Angeles Times - SILICON VALLEY WILL NO LONGER BE AN ICON. Po
Bronson, Wired
14- SILICON VALLEY LOSING ITS EDGE. Cover Story,
Business Week, 1985. - DREAMS OF STRIKING IT RICH FADING IN SILICON
VALLEY. Los Angeles
Times, 1991. - SILICON VALLEY WILL NO LONGER BE AN ICON.
Po Bronson, 2003.
15Bubbles Arent New
- Between 1846 and 1852 telegraph miles in the US
rose from 2,000 to 23,000. Three lines covered
New York and Boston, though there wasnt enough
traffic for onne. - In 1894 the US had 192 railroads in bankruptcy
(41,000 miles of track)
16Bubbles Arent All Bad
- Spread of cheap telegraphy fostered other key
innovations Associated Press, national markets
in stocks - Railroads served as crucial platform for new
industries Sears Roeback.
17After the dot-com bubble
- Prices plunged servers, digital cameras,
domain-name registration, web design, web
hosting, office space - System in place for transmitting data, voice,
documents, companies like Vonage and Skype rise
up. - Google prospers by lashing together thousands of
cheap servers and tapping into an installed base
of 172 million web surfers, and hiring redundant
engineers
18But the real story is the small companies
Source Joint Venture Silicon Valley Network,
2005 Silicon Valley Index
19The Valley also proliferates new business models
- Internet-based commerce (Netscape)
- Free search, supported by advertising (Google,
Yahoo) - Music downloads (Apple itunes)
- Social networking (Facebook, MySpace)
- Consumer as producer (You Tube)
20- So whats happening right now in Silicon Valley?
21Were adding jobs
Silicon Valley Employment, 1997-2007
Source Joint Venture Silicon Valley Network,
2008 Silicon Valley Index
22Our innovative edge continues
Silicon Valleys Share of US California
PatentsSilicon Valley Cities
23Venture funding hits new highs
Venture Capital Investment Silicon Valley Cities
24Were moving into promising new areas
Venture Capital Investment in Cleantech Silicon
Valley Cities Rest of State
25Incomes are on the rise
Real per Capita Income Santa Clara San
Mateo Counties vs. United States
26Median Income Silicon Valley and United States
27- So what comes next for Silicon Valley?
28- 1. Were not finished with Information
Technology yet.
29 30- 3. Convergence of biotechnology,
nanotechnology, and information technology
31 32Silicon Valley Challenges External
- Volatility in financial markets
- Collapse of financial institutions
- Housing crisis
33Silicon Valley Challenges Internal
- As a community we have many issues to address.
- Its going to get harder and harder to
participate in the innovation economy.
34Issues for the Silicon Valley Region
- The Usual Litany
- Transportation
- Housing
- Infrastructure
- Tax Fiscal Policy
- Quality of Life
- Health care, health insurance
- Education
35Housing AffordabilityPercentage of Potential
First-Time Homebuyers able to Purchase
Median-Priced Home
Source Joint Venture Silicon Valley Network,
2007 Silicon Valley Index
36High School AchievementSilicon Valley
Source Joint Venture Silicon Valley Network,
2008 Silicon Valley Index
37Enrollment in Intermediate Algebra by Ethnicity
2005
38Juvenile Felony Offense Per CapitaSan Mateo
Santa Clara Counties
39Perhaps More Disconcerting
- It will become increasingly more difficult for
people to participate in the innovation economy,
and in the global marketplace
40- In the future prodigious job growth in Silicon
Valley is unlikely. - We can most likely expect steady, incremental
growth. - The major opportunities will be in a few key
clusters, and the industries that support those
clusters. - Those jobs will be hard to get, and require
significant training.
41Why? Whats Happening?
- Intense competition. Rise of competitor regions
- Companies doing more with less. They have to.
- Silicon Valley workers doing it with productivity
gains.
42Job Distribution by Wage Level Santa Clara San
Mateo Counties2002 2006
43Why? Whats Happening?
- Off-shoring and outsourcing.
- Old story, except now higher-end functions going
off shore - Design
- RD
44Why? Whats Happening?
- Technologies invented here eliminated entire
classes of jobs - Administrative class
- Archivists, data entry
- Back Office functions
- Production
45Why? Whats Happening?
- Many of the emerging clusters (Biotech,
Web 2.0) arent big job generators to begin
with.
46Why? Whats Happening?
- Nature of corporate capitalism itself is
changing - Vertical integration a thing of the past
- Companies down-sizing
- Focus on key competencies
- Groaning under weight of overhead
- Health care, benefits
- Reducing FTEs, using contractors
-
47- To survive and thrive in Silicon Valley people
must be innovative, productive, willing to
re-invent themselves, and resilient
48Silicon Valley Worker of the future
- Will work in numerous places over course of
career - Will have to re-train and re-tool
- Will have to distinguish self with a unique
competency - Will shoulder a heavier burden for coverage and
benefits - Will need high-end skills language, writing,
communication, technical expertise
49THANK YOU FOR INVITING ME
- Detailed information is available at the Joint
Venture website www.jointventure.org - We also welcome your calls
-
- Joint Venture Silicon Valley Network
- 84 West Santa Clara Street, Suite 440
- San Jose, California 95113
- (408) 271-7213
-