ShareThisBy CAROLYN SAID
San Francisco Chronicle
Silicon Valley, ever subject to boom-bust cycles, has returned to prosperity after a five-year downturn.
The region, the nation's headquarters for technology innovation, has revitalized itself economically, even as it continues to evolve, going ever more global and pioneering new industries such as clean tech, according to a major study to be issued this week.
Globalization is helping to expand the valley's economy, rather than threatening it, according to the 2007 Silicon Valley Index, produced by Joint Venture: Silicon Valley Network, a public-private partnership.
One of the study's principal findings is that the area is thriving as it both competes and collaborates with tech centers around the world. Despite some predictions that Silicon Valley would lose out because of globalization, the region is keeping its lead as a capital of technology investment and employment.
For the first time since the dot-com collapse, Silicon Valley added a substantial number of jobs in the year ended June 30, the report showed.
The 33,000 new payroll jobs _ a 2.9 percent increase _ spanned a broad range of technology sectors. They reflect a significant turnaround in a business cycle where employment had been declining or stagnant since 2000. Meanwhile, the region's unemployment rate fell to 4.1 percent, and its share of U.S. venture capital continued to grow.
"We've reinvented ourselves for at least the fifth or sixth time since the 1950s," said Russell Hancock, chief executive officer of Joint Venture, in a preview of the report.
The study will be released Friday at a State of the Valley conference featuring former Vice President Al Gore and Google CEO Eric Schmidt.
The job growth shows valley tech companies expanding to construct "all the stuff you need to make the Internet ubiquitous the way electricity is ubiquitous," Hancock said.
Despite larger payrolls, the index shows that productivity per employee continues to rise, increasing by 4.1 percent from 2005 to 2006 for Santa Clara and San Mateo counties. By contrast, overall U.S. productivity was up 1.9 percent for the same period.
Hancock describes the index, which slices and dices data on jobs, income, housing, education and other factors, as an annual physical exam for the region. Joint Venture defines the valley as Santa Clara County plus adjacent parts of San Mateo, Alameda and Santa Cruz counties _ 29 cities in all.
"Silicon Valley is back, but it's coming back looking different," said Doug Henton, a Mountain View economist and principal author of the report.
Notably, the valley's ties to the rest of the globe have strengthened. With 36 percent of its residents born abroad, the San Jose area has supplanted Los Angeles for having the second-most international population in the country. Miami remains No. 1. The immigrant impact is particularly strong in the arena of science and engineering: 55 percent of valley workers in those occupations are foreign-born.
The global flavor extends to the flow of ideas and capital.
International co-patenting _ patents with co-inventors from Silicon Valley and abroad _ increased sixfold in the valley from 1993 to 2005. India, China, Italy, Hong Kong, Finland and Taiwan are the countries providing the most co-inventors.
Venture capital from around the globe pours into Silicon Valley, with the United Kingdom, Taiwan, Japan, Israel and Singapore investing the most.
Conversely, Silicon Valley venture capitalists continue to extend their reach internationally, investing most heavily in China, the United Kingdom, Israel, South Korea, India, Japan and Germany.
Besides collaborating with other regions, Silicon Valley also competes with them to attract companies, talent and funding.
The index looked at how Silicon Valley stacks up against other high-tech hubs. The area ranked No. 1 in per-capita employment in information technology and computer manufacturing, with Austin, Texas, second and Singapore third. It also ranked first in venture capital per capita, and was fourth in patent registrations per capita.
The valley long ago shifted its focus from manufacturing to idea generation. The report shows that it continues to expand into new fields, some of which may provide an economic engine of the future.
A new generation of Silicon Valley companies has sprung up to work on improved energy generation, storage and efficiency, a field known as clean tech. Venture investment in clean-tech Silicon Valley companies increased a staggering 929 percent over the past two years, albeit starting from a low base. It hit $290.5 million in the third quarter of 2006, almost double the $150 million invested in the preceding quarter.
(Distributed by Scripps Howard News Service, www.shns.com.)
