Study sees signs of recovery in the Silicon Valley

February 14, 2011 10:19:28 PM PST
A new study of the Silicon Valley economy shows early signs of recovery, but it also forecasts a public sector crisis that could impair economic growth. The report projects that revenue generated by job creation and new businesses will not provide cities and counties in Santa Clara and San Mateo counties with the money to maintain vital public services. Public safety and social programs have already seen cutbacks as a result of falling revenues and the two sponsors of the Index say new priorities will need to be set.

The Index is the work of two organizations -- Joint Venture: Silicon Valley Network and the Silicon Valley Community Foundation. The economic analysis was prepared by Collaborative Economics in San Mateo.

Programs at stake, for example, might include senior meal programs or child protective services, says Dr. Emmett Carson, CEO and president of the Silicon Valley Community Foundation. He and Joint Venture president and CEO Dr. Russell Hancock said that this may likely lead to more consolidation of services, such as contracting out police and fire protection or combining back office functions. However, those are sometimes difficult and controversial choices that require public input and consensus.

The 72-page Index is filled with statistics and analysis about Santa Clara and San Mateo counties. Among the key findings:

  • 12,300 jobs were added in 2010, matching employment levels in 2004
  • 4,200 public sector jobs were lost in 2010 (1200 in education, 1100 in city government)
  • Food stamp participation increased 59% since the economic downturn began in 2007
  • Residents without health insurance has gone from 14 to 18% in the past three years
  • Median income dropped 3% in 2009 to $86,400.
  • Silicon Valley cities have lost $24 million in revenue and have seen an increase of $119 million in expenditures over the past eight years

The Index will be the centerpiece of a town hall meeting this Friday in San Jose where senior executives, community leaders, public officials and other stakeholders will gather to begin to address the trends and issues raised in the report. The "State of the Valley" conference is expected to draw 1,000 attendees at the McEnery Convention Center.