What are we doing?

We are launching an initiative to grow and improve Silicon Valley’s partnership with the federal government.

Why are we doing it?

The 2010 installment of the Silicon Valley Index contained a special analysis section, “Silicon Valley’s Engine: At Risk?”.  The analysis surveyed a number of features comprising our region’s innovation “habitat,” one of which was our historic relationship with the federal government as an investor, procurer, and incentivizer. 

The analysis observed that Silicon Valley has been slipping in its attraction of federal  funding, since peaking in 1994.  We also observed that, while total federal procurement spending has increased at an average annual rate of nearly 4 percent since 1994, spending in Silicon Valley has decreased over that same period, to the point where spending here falls below the national average.

We also observed that federal funding for small business innovation research (SBIR) has been on the decline since 1994, dropping precipitously (27 percent) since 2004.  The drop is steeper than the 19 percent reductions in total SBIR spending since 2004. 

To be sure, Silicon Valley research dollars continue into our institutions of basic research and into the national research labs located here.  Overall Silicon Valley continues to receive federal investment dollars and they can be considered one key driver of our overall innovative capacity.

And yet the competition for these dollars is greatly increasing, and the trends overall raise some concern.

Nowhere is this more apparent than in the area of Department of Energy stimulus funding. Though the DOE is funding states and firms across the nation, to date Silicon Valley has been relatively unsuccessful at attracting these funds.  For example, one especially promising new program at DOE is the Advanced Research Development Program (ARPA-E), modeled after the original ARPA which is credited with enabling the internet and numerous other innovations.  ARPA-E will allocate $388 million, but so far Silicon Valley has not received a single grant, despite several attempts.  Another example is DOE’s Smart Grid Investment Grant Program: though numerous states have already received these funds, only two California firms have been awarded, both located in Southern California.

Who’s involved?

Steering Committee Members:

• Ryan Adesnik, Stanford University
• Bill Berry, University of California, Santa Cruz
• Emmett Carson, Silicon Valley Community Foundation
• Ben Foster, Optony
• Carl Guardino, Silicon Valley Leadership Group
• Jean McCown, Stanford University
• Bill Miller, Stanford University
• Sean Randolph, Bay Area Council Economic Institute
  

What are the next steps?

• Developing a strategic work plan
  

Where do I find out more?

For more information, contact Indira Balkissoon at This e-mail address is being protected from spambots. You need JavaScript enabled to view it