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Hundreds of Silicon Valley elected leaders, government officials, business groups and nonprofit workers turned out at San Jose State University on Friday for the State of the Valley conference, a one-day meeting about the region’s trends.
The annual conference focuses on the plethora of data about the region in the Silicon Valley Index, an annual report published by the research arm of Joint Venture Silicon Valley — a San Jose-based organization that researches trends in the area.
Each annual index report looks at indicators about the region from the year prior, akin to a snapshot of Silicon Valley and how it’s faring in a variety of categories.
Joint Venture CEO Russell Hancock led brief discussions with regional experts across a range of topics including employment, technology and innovation, housing, safety net programs and more.
The tech sector has long been a major economic force in Silicon Valley, but layoffs have sent waves of concern across much of the region, with 36,000 tech company layoffs in the Bay Area since August 2022.
But Hancock said it’s important to see the larger context, including that the region’s tech sector currently has 37,000 more workers than it did before the pandemic, even after the waves of layoffs.
He also said the valley has seen worse.
“When the dot com came crashing down in 2000, we lost, in one fell swoop, 150,000 jobs, and then those losses continued in the succeeding years. So what we’re experiencing right now is nothing of the sort,” Hancock said.
Hancock added that while many sectors of the tech economy that scaled up in the pandemic to respond to global need are now scaling down, yet the region’s value remains strong. The total value for all publicly traded stock of Silicon Valley companies — the region’s market cap — hit $14.9 trillion this week, he said, a record figure.
“So we leave it to you to tell the story. Is Silicon Valley in crisis? Well, yes, we’re readjusting, yes there’s transitioning, but if you look at results in terms of increase in headcount, stock market performance, competitive advantage, it seems pretty clear that Silicon Valley is still firing on most of its cylinders,” he said.
Hancock spoke with Tom Lounibos, president of Accenture Ventures, who highlighted the importance of artificial intelligence to the valley’s growth. He said while there is a lot of hype, “the hype is real,” comparing AI’s level of potential impact to other major innovations like the PC, internet and cloud computing.
“Generative AI and AI is not just a Mavericks wave, it’s a 100-foot wave. The transformation potential, the productivity gains,” Lounibos said. “I think it’s scary to a lot of folks, and it should be for all of us. We need to have responsible AI. We have to be curators of that, all of us here in the valley as we go forward. But it is a major wave that’s going to impact every part of our society.”
The massive wealth Silicon Valley’s innovation economy has created for some has long left others behind, contributing to a significantly higher cost of living, especially for housing. There are nine counties in the U.S. where the median home value is $1 million or more, and five of them are in the Bay Area, Hancock said.
Based on state-mandated housing goals, Silicon Valley cities and counties collectively saw less than one-third of the needed homes for people earning very low incomes built from 2015 through 2023. For low-income earners, less than half of the needed homes were produced, and for moderate-income earners, nearly two-thirds were produced.
“What we are doing is building luxury housing,” Hancock said.
The region has seen 210% of the needed amount for luxury or market rate homes built in that same time period.
The lack of affordable housing has affected the daily life of many residents, making it harder to afford child care, groceries and other necessities, at the same time as the prices for necessities continue to increase post-pandemic.
About 37% of children in Santa Clara and San Mateo counties live in households at risk for food insecurity, the index reported.
“Based on enrollment in CalFresh, the need for food assistance in Silicon Valley increased sharply at the onset of the pandemic and has continued to rise steadily ever since,” the index said.
In Hancock’s conversation with Regina Celestin Williams, executive director of housing advocacy organization SV@Home, Williams underscored that the stakes are high.
“The challenge is multifaceted. We are grossly behind in the number of housing units that need to be built,” Williams said. “And the folks who are most vulnerable are folks who are getting pushed out of the housing altogether and living unhoused. But we can’t just solve the housing crisis by building market rate alone.”
Contact Joseph Geha at [email protected] or @josephgeha16 on Twitter.
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