Katie Benner writes: Silicon Valley’s economy is booming, but according to one economic report there’s not a bubble in sight. Silicon Valley Index
According to the think tank Joint Venture Silicon Valley, Silicon Valley’s job growth rate, at 4.1 percent, is the highest it’s been since 2000, adding nearly 58,000 jobs. Average annual incomes in Silicon Valley and San Francisco were $116,033 and $104,881, respectively, compared to $61,489 in the United States, the study shows.
On the investment side, Silicon Valley and San Francisco lured $20.2 billion in venture capital in 2014, according to the Silicon Valley Index, a report tallying economic indicators since 1995.
More than half the VC investments were in software, a figure that has grown steadily for five years, the report says. The share of U.S. investments shot up nearly 7 percentage points to 43 percent. The report says there were were 275 U.S. Initial Public Offerings in 2014, 23 of which were Silicon Valley companies, and five of which were San Francisco companies.
The report defines Silicon Valley as Santa Clara and San Mateo counties and adjacent parts of San Mateo, Alameda and Santa Cruz counties. San Francisco was factored into some data because of the city’s quickly expanding tech sector.
But not all the news was good. Thanks to a growing wage gap, nearly 30 percent of the region’s population does not make enough money to meet their basic needs without public assistance, the report finds. The median income for high-skilled workers in the region is $118,651, while the median wages for low-skilled workers is $28,847.
And the income gap between the sexes is worse in the region than nationwide, the report shows. For workers with bachelor’s degrees, median income for men was 61% higher than for women in Silicon Valley – for a difference of $34,233. That gap is growing, and compares with 48 percent in the United States as a whole.
Not everyone agrees with Hancock’s sunny outlook. Skeptics point to public valuation of internet companies such as Twitter, and private valuations such as Facebook’s $19 billion purchase of WhatsApp as evidence of a possible bubble.
“There are enormous amounts of money sloshing around,” says Stanford University business professor Jeffrey Pfeffer. “The valuations are high, that’s for sure.” Pfeffer also cited the income gap as a concern. “I don’t believe it’s a healthy economy when service workers can’t afford to live here.”
