A message about the 2012 index

Dear Friends:

Silicon Valley is making an impressive recovery—impressive because our region was the last to succumb when an historic recession gripped our nation, and now it appears to be the first to emerge. The growth is led by a few key sectors which fueled the overall creation of more than 42,000 jobs over the past year, and this report chronicles those developments in careful detail. It also shows how our innovation engine—measured by venture capital, patent registrations, new firm formation, and even IPOs—is clearly revving up again.

Though encouraging, we don’t see the report as cause for celebration. The gains are sector specific and not widespread; small businesses are clearly not out of the rough; the public sector is still in the throes of a fiscal crisis; and median household income continues to fall as the gap between those succeeding and those struggling grows wider and wider. It’s as if we’re becoming two valleys.

When we’re at the top of our game the region will be creating jobs across the board, our workforce will be able to move up the mobility ladder, and there will be robust growth in the mid-range professions. This requires both a strong economy and a strong community, with thriving public institutions and a first-class infrastructure.

Unfortunately, even a stunning economic recovery won’t address our fiscal woes. That is because our tax system, geared to a 19th century economy, doesn’t track with the 21st century economy that is being invented (and reinvented) in Silicon Valley. We highlighted the fiscal crisis facing our local governments in last year’s Index.

This year’s Special Analysis builds on that report and analyzes a key component of our revenue model, property taxes and the long-term impact of Proposition 13. The findings are sobering: we can’t count on property taxes to drive a public sector comeback any time soon.

Our hope is that 2012 is the year when a real conversation about reform takes hold, and that Silicon Valley’s is an outspoken voice in that conversation. The creativity that we rightly celebrate in our private sector needs to take hold in our public sector as well. When it does, we will truly have cause to celebrate.

We’re pleased that the Index and Special Analysis can provide the analytical foundations for these important conversations.

Sincerely,

Russell Hancock, Ph.D. President & Chief Executive Officer Joint Venture Silicon Valley	Emmett D. Carson, Ph.D. CEO & President Silicon Valley Community Foundation

A message about the 2013 index

Dear Friends:

Silicon Valley has rebounded from the recession, but persistent challenges remain. How we use this recovery to address these challenges will determine our future competitiveness and quality of life. The region is adding jobs faster than it has in more than a decade, and at a faster rate than the rest of California and the nation. Over the past year the Valley grew by 42,360 jobs and the quarterly growth rate reached four percent, the highest we’ve seen in over a decade. Those numbers swell dramatically if we add San Francisco into the head count.

San Francisco’s impressive performance raises interesting and important questions about the Bay Area’s growing connectedness and interdependencies. It’s clear that technology, innovation, and entrepreneurship are no longer clustering in the South Bay alone, and the spread of these activities forces our region to address questions of integration that have long been ignored. This year’s Special Analysis looks at those issues in depth and suggests it is time Silicon Valley and the greater Bay Area take a fresh look at regional planning and decision making. This year’s Index also makes it clear that our current economic growth, however widespread, is not a cure-all. The rebound has not reached all our residents, and it is not addressing the most serious challenges there were here before the recession and which remain with us today. A large and growing education deficit keeps too many residents from sharing in the new prosperity. The high school drop-out rate is rising. Incomes continue to slip for our Hispanic and African American populations, while rising for other groups. Housing starts have not recovered to pre-recession levels, and the percentage of income spent on rent has reached a decade high (46 percent).

The Index shows Silicon Valley maintaining its status as the world’s major innovation hub, with solid gains in patent registrations and IPOs. And yet it is also clear we cannot take those advantages for granted. Our report also shows a decline in venture capital investment, and though there has been growth in angel financing and conventional loans, we may be on the cusp of a disruptive shift in the Valley’s financing model. As our economy continues to grow, and as that growth takes on a wider footprint, the 2013 Index challenges us to think more expansively about all the associated challenges, to become more regionally integrated, and to ensure that our growth is more widely shared.

Sincerely,

Russell Hancock, Ph.D. President & Chief Executive Officer Joint Venture Silicon Valley	Emmett D. Carson, Ph.D. CEO & President Silicon Valley Community Foundation

ABOUT THE SILICON VALLEY INDEX

The Silicon Valley Index is a nationally recognized publication that has been telling the Silicon Valley story since 1995. Released by Joint Venture and Silicon Valley Community Foundation every February, the indicators measure the strength of our economy and the health of our community--highlighting challenges and providing an analytical foundation for decision making.

You can download a PDF of the entire 2013 report by clicking the cover image. We're also pleased to announce that the complete Index is now available on its own dynamic website at www.siliconvalleyindex.org. There, you can click on the charts and access their underlying data.

What is an Indicator?

Indicators are measurements that tell us how we are doing: whether we are going up or down, going forward or backward, getting better or worse, or staying the same. Good indicators:

• are bellwethers that reflect fundamentals of long-term regional health;
• reflect the interests and concerns of the community;
• are statistically measurable on a regular basis; and
• measure outcomes, rather than inputs.

How are the Indicators Chosen?

Every year a team of advisors recommends approximately 60 indicators to the Joint Venture board. More than half of these are retuning indicators that we track systematically over time; the remaining indicators are chosen for their ability to tell how our region is faring across a broad range of goal areas, that were adopted by the organization in 1998 as the Joint Venture Framework for Regional Progress.

Reach and Impact

• We're gratified that more than 1,200 people - from every sector of the community - gather for the State of the Valley Conference, where we release the Index, every February.
• Thousands of copies are downloaded from our website and distributed worldwide.
• Click here to see other indicator projects that have been started around the country.
• The information surfaced by the Index becomes the point of departure for all of the programs and initiatives that we undertake at Joint Venture.
• Click here to read an example of what other people say about the Index.

The Silicon Valley Index is a nationally recognized publication that has been telling the Silicon Valley story since 1995. Released by Joint Venture and the Silicon Valley Community Foundation every February, the indicators measure the strength of our economy and the health of our community—highlighting challenges and providing an analytical foundation for leadership and decision making.

What is an Indicator?

Indicators are measurements that tell us how we are doing: whether we are going up or down, going forward or backward, getting better or worse, or staying the same. Good indicators:

• are bellwethers that reflect fundamentals of long-term regional health;
• reflect the interests and concerns of the community;
• are statistically measurable on a regular basis; and
• measure outcomes, rather than inputs.

How are the Indicators Chosen?

Every year a team of advisors recommends approximately 40 indicators to the Joint Venture board. More than half of these are retuning indicators that we track systematically over time; the remaining indicators are chosen for their ability to tell how our region is faring across a broad range of goal areas, that were adopted by the organization in 1998 as the Joint Venture Framework for Regional Progress.

Reach and Impact

• We're gratified that more than 1,200 people - from every sector of the community - gather for the State of the Valley Conference, where we release the Index, every February.
• Thousands of copies are downloaded from our website and distributed worldwide.
• Click here to see other indicator projects that have been started around the country.
• The information surfaced by the Index becomes the point of departure for all of the programs and initiatives that we undertake at Joint Venture.
• Click here to read what other regions say about the Index.