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Index, White Paper Offer Foray into Silicon Valley

February 22, 2002

While Silicon Valley lost jobs last year — the first decline since 1992 — value added per employee, a measure of productivity, increased 4.6 percent to $170,000 compared to $56,000 nationally, according to the Index of Silicon Valley 2002 released in January by Joint Venture: Silicon Valley Network.

The above figures and other economic data contained in the Index measure annual progress toward the long-term goals of an innovative economy, livable environment, inclusive society and regional stewardship established by Joint Venture in Silicon Valley 2010.

The Index suggests that while the Valley faces short-term economic challenges, its long-term prospects remain strong, given continuing innovation and productivity gains. Important progress also is being made on long-term goals.

Though the slowing economy has eased some pressure, people are still under strain, the Index observes. The gap between high income and low income households narrowed for the first time in seven years, although the standard of living for the region's poorest households has not increased over 1993 levels. Since then, the cost of living has increased 20 percent. Annual average pay in Silicon Valley fell an estimated two percent but remains the highest in the nation.

Innovation continued with the awarding of 6,800 patents to Silicon Valley inventors, eight percent of those awarded to U.S. residents. Though venture capital investment tumbled from a record high of $21 billion in 2000 to $6 billion last year, 2001 investment still topped the 1998 level.

The Index follows the December 2001 release of the Joint Venture: Silicon Valley Network White Paper Next Silicon Valley: Riding the Waves of Innovation. The paper highlights several challenges facing Silicon Valley as it deals with a short-term impact of the boom/bust cycle, longer-term requirements of adjusting to new waves of innovation, and economic shocks from the September 11 terrorist attack.

Understanding opportunities presented by new innovation waves will be critical for the Valley's future success, according to the paper. Areas highlighted include:

  • deepening information and communication technology in the economy and society as the U.S. moves past the first phase of the Internet toward the mobile Internet, productivity tools and new applications in education, government and the community;
  • major advances in biotechnology that will converge with information technologies and lead to new opportunities in bioinformatics, biomaterials and biochips; and
  • commercialization of nanotechnology, which has the potential to revolutionize chip and computer manufacturing.

Copies of the Index of Silicon Valley 2002 are available at http://www.jointventure.org/resources/2002Index/index.html The White Paper Next Silicon Valley: Riding the Waves of Innovation is available at http://www.jointventure.org/nsv/summary.html.