Silicon Valley gears up to change its course

February 12, 2010 6:44:52 PM PST
Silicon Valley is planning to hire what some people are calling a secret agent to do "special ops" -- undercover reconnaissance and intelligence gathering to bolster its competitiveness and to win more federal funding. The special ops person will report to a steering committee made of top Silicon Valley organizations vested in the economic vitality of the region.

Joint Venture: Silicon Valley Network president & CEO Russell Hancock and Silicon Valley Community Foundation CEO Emmett Carson made the announcement Friday morning at their "State of the Valley" conference at McEnery Convention Center in San Jose.

The two organizations on Wednesday released their annual economic report card, and it pointed out a number of danger signs that the region's innovation engine has stalled. Among the key findings: the number of patents registrations has slipped, venture capital investments have dropped 35 percent and the Valley has seen a 25 percent growth in five years of independent contractors who do not employ anyone.

Another key finding was that growth in federal funding of research projects in the Valley is down -- that is what prompted the creation of a special ops position.

The special ops person will investigate why Huntsville, Alabama and the Washington DC area are seeing dramatic growth in federal funding (Huntsville, up 4 percent; DC, up 7 percent). The special ops person will also keep tabs on federal funding projects.

The steering committee that will oversee this effort is comprised of Stanford University, the Silicon Valley Leadership Group, the Bay Area Council, Joint Venture: Silicon Valley Network and the Silicon Valley Community Foundation. The Foundation is providing a one-time grant of $100,000 to fund the position, hoping to spur other contributions to support the effort. The Foundation's Emmett Carson said he expects it will take several years to see positive change.

The purpose of Friday's conference was to provide a wake-up call to educational, business and nonprofit leaders to start solving the region's problems before it's too late. Several of those leaders told ABC7 that they know action is needed, but they cannot identify specific solutions.

San Jose Mayor Chuck Reed says he will continue to lobby for federal dollars from Washington.

"Silicon Valley should get more of the spending of the federal government on technology. This is where the creativity is. This is where the innovation is. They should be spending more federal dollars here," says Reed.

At the same time, the Valley is being accused of complacency.

"We did coast for quite a while about how unique we are. We're not," says venture capitalist John Gage.

While clean tech is being touted as the job engine of the future, it is expected to create work mostly for installers.

"I don't think there's a lot of jobs purely in clean tech manufacturing. Economically, a lot of it is going to go where energy is cheaper, labor costs are cheaper, land is cheaper," says Barry Cinnamon, from Akeena Solar.

The analysis by Joint Venture: Silicon Valley Network and the Silicon Valley Community Foundation also urges Valley leaders to address education funding cuts, which could impact the quality of the future work force.

"There's a little too much micromanaging both by the state and the federal government. If they would give us the resources we need and let us do our job, I think things would work very well," says school board president Andrew Ratermann.

The problems and issues have been identified. The next step is addressing them with alacrity.

Just like a large ship, changing course could take time, perhaps years for Silicon Valley. So the prevailing thought is that the sooner action is taken, the sooner Silicon Valley can be back on course.