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 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.

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?

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.

Dear Friends:

2009 was a rough year. We learned the hard way that Silicon Valley is not immune to the larger forces at work in the global economic recession. Like other regions, we have lost tens of thousands of jobs, absorbed thousands of home foreclosures, and seen our incomes decline. Despite our many strengths—from talented people to world-class technology—we could not insulate ourselves from the larger economic downturn.

Now we are at a critical moment. We must face facts and address the vulnerabilities that put our economy and community at risk.

This year’s Index provides a sobering picture of our current situation and contains critical information we will need to move forward. In addition to the Index itself, we present a Special Analysis which is a call to action based on these facts. It suggests Silicon Valley has entered a new era of uncertainty, with a set of vulnerabilities that could compromise our long-term prosperity. Our continued ability to import and develop talent, fund innovation, and rely on state government for overall support are seriously in question. We are a region at risk.

This is not a time for complacency. At a time when we need to engage more actively in the global economy, the very foundations for that engagement are weakening. We’re disinvesting in education and we’re not cultivating talent. Our state is no longer able to make crucial investments in infrastructure. Gridlock in Sacramento has become a major barrier to our ability to compete abroad and solve problems here at home.

Of course we still have many strengths as an innovation economy, and as a vibrant community. Silicon Valley competes at a very high level with other advanced regions in the global economy. But we must continue to build on these strengths if we are to maintain our position in a world that is rapidly rising to challenge us. From the rise of Asian economies to California’s budget meltdown, our future will in many ways depend on how we respond to forces emanating beyond our region.

To maintain our customary place in the world economy we must face the facts, challenge our assumptions, and address these new realities with the ingenuity and drive that has always been a hallmark of our Valley. Joint Venture and Silicon Valley Community Foundation are working together to help our region meet these challenges. We hope this year’s Index and Special Analysis will be a catalyst for action.

Sincerely,

Russell Hancock, Ph.D.
President & Chief Executive Officer
Joint Venture: Silicon Valley Network

Emmett D. Carson, Ph.D.
CEO & President
Silicon Valley Community Foundation

Other regions closely follow the Silicon Valley Index and many have emulated it to create their own set of indicators and data reporting.

One such example is described in this article that appeared in Florida Trend, a business magazine, in 2005.

Silicon Valley: A synonym for economic success

One of the traits of successful people, businesses and communities is the ability to engage in an open, honest examination of where they are, where they want to go and what they're doing to get there. In 1992, business leaders in Silicon Valley, the region that's become a synonym for economic success, started an organization called Joint Venture: Silicon Valley Network in response to what they saw as unnecessary government bureaucracy and a generally unhealthy business climate. Since 1995, the network has published an annual "index" that measures how the region is doing on what it believes are the most important indicators of its civic health. (Download a copy at jointventure.org.) There are several notable things about the effort that should interest economic developers in Florida:

1. It's regionally based and not confined to one town. The Silicon Valley region includes Santa Clara County and parts of three others, with a population of 2.4 million. Florida is a state of regions, and approaches to problems will increasingly originate with regional-based organizations rather than the state.

2. In addition to thinking regionally, the Valley's business leadership thinks beyond next week. Executives at companies like Calpine, Apple, Comerica Bank and a host of big-time venture capital finns that are part of the network look beyond mindless, simplistic indicators like "housing starts" and "numbers of new jobs" in measuring success. The network's index is organized around four areas of concern: Innovative Economy; Livable Community; Inclusive Society; and Regional Stewardship. The indicators the network traces are sophisticated and deep; they range from the number of patents generated by area finns to crime rates to corporate R&D expenditures to per capita income to numbers of students enrolled in intermediate algebra to mercury levels in the water, traffic delays, voter registration levels and the financial health of arts organizations.

If the network's leadership considers data from a particular indicator alarming, it organizes task forces of businesspeople, government representatives, academics and other subject-matter experts to get results. Like startup businesses, these task force initiatives must generate their own funding and momentum.

3. The Silicon Valley Network sees diversity--both ethnic and political--as an asset. In the Valley, two out of five residents were born outside the country. The share of Hispanic residents has grown flora 15% in 1993 to 23% in 2003. Financial supporters and board members come from a huge range of public and private universities, cultural organizations, foundations, high-tech companies, local governments, hospitals and non-profit groups, including the David and Lucile Packard Foundation and Planned Parenthood. "We're all about inclusivity and having a big umbrella," says Russell Hancock, the network's president and CEO.

It's rare to find that level of inclusiveness in Florida. Local economic development groups here, even good ones, can get knotted up real fast in Republican-Democrat foolishness or whether someone's a 'Nole or a Gator; it's hard here to get even some of the better economic development groups to truly integrate cultural affairs in economic development. Other disconnects abound: Every economic development official I've ever spoken with says the first thing that companies ask about in considering relocation is the quality of an area's educational system; but if one of the economic development groups has mounted a high-priority, focused effort to make its local school system first rate, I've missed it.

4. The Silicon Valley Network's leadership insists on a completely honest and unflinching annual report, regardless whose feelings it hurts. Successes and imperfections are both reported in positive but unblinking language. Hancock explains that the Valley's business leadership lives in a business culture of measurement and results and "just wants the facts. We feel we have big problems we have to solve. There's no fluff here, no hoo-hah. We decided we need to have a solid analytical foundation. We needed benchmarks."

The group's Index 2005 report includes good news, for example, about venture funding and child immunization rates. But it's also full of sobering data about low-income households losing ground faster than others, job losses and shortages of certain professions, and low internet connection rates(!). In his summary, Hancock isn't afraid to write that the region "has lost ground" since 2000.

A number of areas in Florida have begun to produce index-like tools, but it remains to be seen whether they're willing to be as ambitious and unafraid as the Silicon Valley Network. Jacksonville's attempt isn't. Pensacola's initial effort stumbled over politics; it's now trying again. The Tampa Bay Regional Partnership group will likely have a first draft of an index out soon.

What I've seen and heard of the various index efforts in Florida leaves me worried that the leadership may not get the point of doing them. They key to success in this kind of effort, aside from the willingness to hear the truth, is getting past the inclination to use the indexes to sell a region or to keep score in a competition against other communities. That's where the Silicon Valley Network index shines. It is, as Hancock says, neither sales tool nor scorecard. It is, instead, a road map to reach internal goals the region has set for itself. "We want to know how we're doing," he says. (Hancock is willing and available to help Florida communities; call him at 408/298-9330.)

Being willing to develop that kind of road map takes sophistication and self-confidence--the willingness to go about building your own economic identity without aping someplace else. Areas like Silicon Valley, North Carolina's Research Triangle Park and Route 128 in Boston didn't use some other "park," "route" or "valley" as a template. They coupled their respective natural attributes with vision, leadership, hard work over many years and lots of public and private investment. And they each built something distinctive, cutting-edge and economically successful.

Florida's regions must understand that mimicking only the form of the Valley's report without adopting its function will produce some nice copy for their next recruitment brochure but won't help build community, which is the ultimate business success.

Mark Howard can be reached by e-mail at: This e-mail address is being protected from spambots. You need JavaScript enabled to view it