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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.
  • Learn more about 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.

Dear Friends:

There is much to celebrate in the 2014 Silicon Valley Index. We’ve extended a four-year streak of job growth, we are among the highest income regions in the country, and we have the biggest share of the nation’s high-growth, high-wage sectors.

Our innovation engine is driving this prodigious growth. Once again we registered more patents than any previous year, increased our share of venture capital and angel investment, saw more IPOs emanating from our region, and have large and growing shares of merger and acquisition activity.

By just about any measure our performance is remarkable, and it leads the nation.

So why does the Index also make us feel uneasy?

There are two reasons, at least. One is that growth has its challenges, and despite recent efforts on the housing and transportation fronts, our region is not making enough progress. Our infrastructure isn’t keeping pace with the demand placed upon it, and we haven’t found a way to adequately increase the stock of housing. Though we’re reporting the highest number of residential units permitted in recent years, it is discouraging that it doesn’t even come close to meeting demand. As a result, housing prices continue to soar, rental expenses outpace income gains, and fewer than half of our first-time homebuyers can afford the median-priced home.

Without doubt, Silicon Valley’s success has also made it a less hospitable place.

The second reason why the Index is troubling is because our prosperity is not widely shared. It is a story the Index has been telling for many years, but in this 2014 installment the gaps and disparities are more pronounced than ever. These are the hard facts: our income gains are limited to those with ultra high-end skills. Median wages for low- and middle-skilled workers are relatively stagnant and the share of households with mid-level incomes has fallen in Silicon Valley more than in the state and nation. Disparities by race are more persistent than ever. We also saw a sharp increase in homelessness.

While job growth is important, it can never be the single measure of our region’s health when it is confined to a limited number of sectors. The ultimate measure is a steady increase in real income, raising the standard of living for all of our residents.

Our two organizations are committed to providing analysis and action on these vexing problems, even as we celebrate our region’s incredible dynamism.

Sincerely,

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


 

Chris Augenstein

CMA Deputy Director, Santa Clara Valley Transportation Authority

Bob Brownstein

Policy Director, Working Partnerships USA

JoAnna Caywood

Director, Programs & Partnerships, Lucile Packard Foundation for Children's Health

Jo Coffaro

Regional Vice President, Hospital Council of Northern & Central California

Leslie Crowell

County Budget Director, Santa Clara County

Fred Diaz

City Manager, City of Fremont

Jeff Fredericks

Managing Partner, Colliers International

Tom Friel

Board member, Silicon Valley Community Foundation

Corinne Goodrich

Manager, Strategic and Long Range Planning, samTrans

James Keene

City Manager, City of Palo Alto

Tom Klein

Shareholder, Greenberg Traurig, LLP

James Koch

Professor, Center for Science, Technology, & Society at Santa Clara University

Rocio Luna

Director of Planning, Policy, & Assessment, Santa Clara County Public Health Dept

Connie Martinez

Managing Director, 1st ACT Silicon Valley

Rich Napier

Executive Director, C/CAG

Sanjay Narayan

Attorney, Sierra Club

Dan Peddycord

Director, Santa Clara Couty Public Health Dept

Jeff Ruster

Deputy Director, work2future

AnnaLee Saxenian

Professor, University of California Berkeley

Susan Smarr

Physician-in-Chief, Kaiser Permanente Santa Clara Medical Center

Gautam Srivastava

Senior Vice President/Human Resources, LSI Corporation

Kris Stadelman

Director, NOVA

Anandi Sujeer

Data Manager, Santa Clara County Public Health Dept

Michael Teitz

Senior Fellow, Public Policy Institute of California

Lynne Trulio

Professor, Environmental Studies, San Jose State University

Kim Walesh

Assistant Director, Office of Economic Development, City of San Jose

E. Chris Wilder

Executive Director, Valley Medical Center Foundation

Linda Williams

CEO, Planned Parenthood Mar Monte

 

About the Silicon Valley Index

grey and yellow banner announcing the 2014 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 2014 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.
  • 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.
  • Read an example of what other people say about the Index
   

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

COPYRIGHT 2005 Trend Magazines, Inc.

 
   

Joint Venture produces and provides supporting documents and research for a wide array of Silicon Valley interests. We also help to support our initiatives through the publication of the annual Silicon Valley Index and a variety of other periodic reports and white papers.

2014 Index of Silicon Valley cover

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