Loading ...Another reminder why it is improbable that the Pleasanton area real estate market will experience significant price declines… In a report to be released this week, Silcon Valley has added significant jobs for the first time since the dot com bust of 2000, with 33,000 new jobs added in the year ending June 30, 2006. Silicon Valley continues to be the driving force in the bay area economic engine. And while it slumped after 2000, it also reinvented itself, becoming more globalized and pioneering new industries, including promising fields such as alternative energy, medical devices, and media & entertainment. Silicon Valley continues to be ground zero for innovation, technology research, and venture capital.
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.
“In the future, this will be Energy Valley,” said T.J. Rodgers, CEO of San Jose’s Cypress Semiconductor Corp., who will appear on a clean-tech panel at Friday’s conference.
He has a personal case in point: In 2002, Cypress bought a majority share in a small Sunnyvale company called SunPower Corp., and spurred it into high-volume manufacturing of solar panels and cells. Rodgers, who is chairman of SunPower, said the company will approach $1 billion in sales this year.
“Solving the energy problem is a huge economic opportunity,” Rodgers said. “Electricity is a trillion-dollar with a T market.”
He says the valley’s system of capitalism — seed capital, entrepreneurial spirit, technology talent and free enterprise — is ideally suited to foster the emerging clean-tech industry.
“The game is not going to be won by building power plants more efficiently than PG&E, but by changing the rules — the way Silicon Valley always works,” he said.
Venture funding is what economists call a leading indicator — a harbinger of how well a region is likely to do in the future when nascent companies grow up and become major employers.
There’s no question that venture funding has declined nationally and locally since 2000, but Silicon Valley’s share has remained strong. In 2005, Silicon Valley drew 27 percent of all U.S. venture funding, up from 21 percent in 2000. For the first nine months of 2006, the area drew $5.2 billion in venture investment, up from $4.6 billion in the same period of 2005.
The biomedical field attracts significant dollars, accounting for more than a fifth of all VC funding, spread between biotechnology at 9 percent and medical devices and equipment at 12 percent. Other emerging areas for venture funding include media and entertainment at 6 percent. Still, the lion’s share of venture funding goes to the region’s perennial moneymakers: software at 23 percent, semiconductors at 15 percent, telecommunications at 9 percent, and networking and equipment at 8 percent.
Indeed, the future looks bright for Silicon Valley, and for the East Bay.
Popularity: 5% [?]
RSS
Silicon Valley Thriving