Part 1: Joint Venture Silicon Valley’s State of the Valley Conference

The 2016 “Forecast” season is in full swing. We’ve been making the rounds to hear what’s in store and will report on our findings in a two-part series. We start off with Joint Venture Silicon Valley’s (JVSV) annual State of the Valley Conference and its companion, “2016 Silicon Valley Index.”

This year, JVSV President Russell Hancock proclaimed that Silicon Valley is “the most prodigious of regional economies.” He also reminded us that it is less about specific geography, and more about a state of mind. In other words, its amorphous nature has made it difficult to replicate anywhere else. Following are a few key takeaways from this year’s index that are particularly relevant to our corner of the Valley.

  • Job growth was robust, to say the least, with the largest annual increase on record! What really caught our attention were the sectors that added the most jobs, and right at the top of the list was “computer hardware/manufacturing,” which demonstrates the impact of the Internet of Things (IoT).
  • Speaking of job growth, it was interesting to see sectors whose job gains may not have been the highest in number, but who saw the largest year-over-year percent changes. The winner on this list? Warehousing, with a whopping 22.3 percent increase in employment from 2014. Thank you e-commerce and just-in-time delivery! Also heartening was the runner up, biotechnology, which scored a 19.1 percent increase in employment and a reference as “the Bay Area’s ‘other’ tech.” While it may not receive as much attention as Uber and Pinterest, biotech is arguably making an even bigger impact with lifesaving technologies.
  • Innovation activity continued to proliferate with Silicon Valley claiming 47.7 percent of California’s patent registrations and 43.2 percent of its IPOs. The valley also had a strong showing in venture capital and angel investment. However, our neighbors to the north in San Francisco beat us out in both categories for the second year in a row, as the result of a handful of very large deals (Airbnb, Uber, and online lender, Social Finance).
  • Silicon Valley is not only creating the latest clean technologies, but is among the strongest markets for them, too. With over 25,000 EVs, we account for 20 percent of the state’s total. Also, cumulative installed solar capacity increased by 20 percent from 2014, reaching 272 megawatts!
  • Of course, it’s not all rosy. Low housing inventory continues to challenge our entire region, reinforcing the need for greater density where it makes sense. Longer commutes have led to extreme traffic congestion, a problem that guest speaker, Dr. Stefan Heck, explained could be partially addressed by putting more jobs near transit. We agree!

Later this week, we will recap the Colliers 2016 Trends Forecast and the Silicon Valley Business Journal’s 2016 Economic Forecast, which reflect diverse perspectives from Washington insiders to local leaders. Stay tuned.