2024 Silicon Valley Index

The Joint Venture Silicon Valley Index has been providing insights on our strengths, weaknesses, opportunities, and threats for over 25 years. It provides an honest and holistic view of life in Silicon Valley. You can download the 2024 Silicon Valley Index over here.

Have a quick look at the comparison between Silicon Valley and San Francisco in the image below. Here are some of my notes from the key findings:

• We're growing again with 11,300 new Silicon Valley residents last year.
• VC dollars going into AI have risen 220% year-over-year. Generative AI represented 44% of all 2023 VC investments in AI companies.
• Silicon Valley just had four IPOs last year. San Francisco had one.
• We're still generating more patents by far than any other place in the nation. San Jose is the top city in the nation yet again for patent filing.
• Silicon Valley's 20 largest tech companies were 7% smaller at the end of 2023 than than the previous year, but employment in tech still ended up being 37,000 employees more than pre-pandemic figures. Tech is now 28% of the workforce.
•  If wealth was evenly distributed in Silicon Valley, it would amount to $2 million per household.
• Silicon Valley's population continues to age, with those over 65 years old up by 32% since 2012 and the number of children down by 13% over the same period.
• The number of births each year in Santa Clara and San Mateo counties has declined steadily since the 1990s, dropping by 33% over 33 years.
• 51% of Silicon Valley speaks a language other than English at home
• The two largest office projects in Silicon Valley last year were both in Downtown San Jose, 200 Park (965,342 SQFT) and Adobe's 4th Tower (700,000 SQFT). The 3rd largest was a 350,000 SQFT building in South San Francisco.
• Silicon Valley childcare costs have quadrupled over the past 20 years, rising twice as fast as regional inflation.
• There were no unhealthy air days in the past three years, showing an improvement in air quality.
• Total solar capacity increased sixfold over the past decade, from 174 MW in 2013 to 983 MW in 2023. Batter storage grew twentyfold in the past 5 years.
• Gasoline and Diesel sales have steadily declined and are still 19% below pre-pandemic levels (presumably due to EV sales)
• 17% of all Californian EV charging outlets are in Silicon Valley, over 5,000 in Santa Clara County alone.
• Life expectancy is several years higher in Silicon Valley versus California or the United States.

2023 Silicon Valley Index

The Joint Venture Silicon Valley Index has been providing insights on our strengths, weaknesses, opportunities, and threats for over 25 years. It provides an honest and holistic view of life in Silicon Valley.

You can download the 2023 Silicon Valley Index over here.

Below are some of the key findings:

• The region continued battling surges, but the COVID death rate per capita declined in 2022.
• COVID-19 dropped to Silicon Valley’s sixth leading cause of death in 2022, down from third in 2021.
• The region recovered from pandemic job losses by April 2022. Unemployment hit an historic low. Tech is becoming more highly concentrated.
• Silicon Valley added 88,000 jobs between mid-2021 and mid-2022, a growth rate of 5.4%. An estimated 22,000 jobs were added in the second half of the year. The 30 largest firms account for 42 % of tech employment (19 % are at Google, Apple, and Meta alone).
• The rise and fall of the stock market drove large shifts in venture funding and IPOs.
• Pandemic-period stock market gains of nearly $9 trillion proved transitory as the market tumbled in 2022. Half of all venture capital flowing to Silicon Valley or San Francisco companies was in the form of megadeals ($24.7 billion spread across 116 megadeals).
• Demand for commercial space is tempered by remote work, but specialized R&D space is hot.
• Though remote work is shifting the dynamic, leasing activity remained strong throughout 2022. While there was a 45% increase in the number of lease agreements, the average amount of space per lease has sharply declined.
• Remote work is increasing, creating extra capacity on roadways and decimating public transit.
• The share of remote workers grew to 35% in 2022, up from 28% in 2021. Private commuter shuttles are being put out of service. Caltrain ridership fell to 4,100 daily riders, down from 67,000 (-92%). BART recovered 35% of its pre-pandemic riders.
• Silicon Valley’s population is declining; the share of young people is also falling.
• Silicon Valley’s population declined by 38,900 residents between mid-2020 and mid-2021, the highest figure ever recorded. The decline was due to a 74% rise in domestic outmigration, a reversal of the net flow of foreign immigrants (-103 %), declining birth rates, and rising death rates.
• The pandemic and patterns of outmigration haven’t affected soaring home prices
• Silicon Valley’s high home prices rose 7% in 2022, reaching a record-breaking median price of $1.53 million. The share of first-time homebuyers who can afford a median priced home fell to 27% and is as low as 14% for the region’s Black or African Americans and Hispanic or Latino residents.
• Inflation outpaced income gains; assistance programs scale upwards
• Increases in the regional Consumer Price Index since 2019 outpaced household income gains, resulting in a $550 decline in median household income in 2021. Childcare costs rose twice as quickly as the regional inflation rate since 2010 (+85%). Average wages vary significantly across racial and ethnic groups, with the largest disparity between Hispanic or Latino and White, not Hispanic or Latino residents.
• Silicon Valley has the nation’s largest gaps, and they are increasing.
• For the first time ever, ultra-high net worth households are included in regional wealth data. Through this lens, inequality is even more stark, with the top 0.001% of Silicon Valley’s households holding more wealth than the nearly 500,000 households in the bottom 50%.
• In 2022 the top 10 % of Silicon Valley households hold 66% of the wealth; eight Silicon Valley households residents hold more wealth than that of the bottom 50% combined (nearly half a million households).
• While income inequality was lessening in the state and nation (down 1 and 3%) it rose in Silicon Valley by 5% in 2021.
• 28% of Silicon Valley households are below income-adequacy; those households include 42% of the region’s children. 42% of children in San Mateo and Santa Clara counties live in households that are not self-sufficient; the most influential factor for these households is the cost of childcare.
• Income adequacy varies significantly by race and ethnicity. Among those most likely to live below Self-Sufficiency Standards are Hispanic or Latino non-citizens and those with limited English.

Silicon Valley Annual Check-up

In the video below Joint Venture CEO Russel Hancock summarizes the key learnings from the 2021 Silicon Valley Index. This year, special attention was paid to the impacts of the Coronavirus on our local economy. Other topics include income inequality, racial demographics, housing imbalances, patent registrations, and venture capital funding. The presentation provides an objective look at how our region is doing compared to previous years as well as the rest of the country.

If you find the content interesting, you can also read the whole 150-page study over here.

2020 Silicon Valley Index

The Joint Venture Silicon Valley Index has been providing insights on our strengths, weaknesses, opportunities, and threats for over 20 years. It provides an honest and holistic view of life in Silicon Valley, with the obvious exception that it was published before COVID-19. It's worth reading for a reminder of where we were at the start of 2020. We can use today's events as a chance to reflect on what we can do differently when we hopefully return to normalcy sometime later this year.

You can download the 2020 Silicon Valley Index over here.

Below are a few items that stood out for me:

• We have had nine continuous years of expansion since the last recession, adding 821,000 jobs in the Bay Area.
• Over that same time period, we only permitted 173,000 new homes and have 100,000 megacommuters [Josh: hopefully the option to work remotely continues for many post-COVID].
• Labor productivity reached a record $241,000 per worker, a 53% increase from 2001.
• Unemployment hit 2.1%, a 19-year low.
• More people are leaving the region than coming in.
• Home prices declined 6% in 2019, yet median home sale prices are still the highest in the country (over $1 million).
• Income inequality hit a historic high with 13% of households holding 75% of the region's wealth.
• Internet speeds are slow compared to SF, California, and the country as a whole [Josh: this is shocking for living in the middle of Silicon Valley].
• Individual median income is $117,000 and 82% of the population is above 150% of the poverty level.
• Silicon Valley's ethnic breakdown is 35% Asian, 33% White, 25% Hispanic/Latino, 5% Multiple/Other, and 2% Black/African American.
• 24% of Silicon Valley residents have Graduate or Professional Degrees.
• 51% of families speak a language other than English at home (vs. 41% for SF, 45% for California, and 22% for the US).
• The Bay Area has by far the largest number of tech jobs and greatest % of people employed in tech out of any region in the US.
• 9% of Silicon Valley Residents lack access to adequate food and nutrition
• San Jose generates more patents than any other city in California (11% of all CA patents in fact).
• In 2019, traffic delays cost as much as $3.4 billion in lost productivity for Silicon Valley workers.

San Jose Development Projects

The SJ Economy blog has released a slick interactive map showcasing major development projects in the area. The map was developed along with the City of San Jose's Public Works GIS team.

The number and scope of projects in the pipeline right have to be an all-time high. We're talking tens of millions of SQFT of development. When using the interactive map, don't forget to use the tabs to see ALL of the projects.

Check out the map over here.

San Jose ranked fastest-growing city in the world, 2019-2035

As we already know, San Jose has one of the best performing economies anywhere. That does not seem destined to change anytime soon based on a new report from Oxford Economics. They are predicting that San Jose will have the fastest growing urban economy in the world over the next 16 years.

If the 3% GDP growth rate is correct, that means our economy will be 50% larger by 2035. The growth rate dwarfs San Francisco but would still not put us anywhere near New York or Tokyo in total economic contribution. However, those cities have much larger populations to work with. We do have the highest GDP per capita in the United States, which contributes positively to salaries and investment.

For more info check out the link below.

Source: SJ Economy Blog

San Jose's economy continues to amaze

We are now at an all-time high when it comes to the state of the economy. Business Insider once again ranked San Jose as the #1 metro in the US when it comes to economic performance (GDP growth was an astounding 6.9%). In the first half of 2018, San Jose companies received about $400 million in venture funding through 14 different deals. Oh, and our unemployment rate is a jaw-dropping 2.4%. The only other time we were ever in that zone was during the .Com shenanigans of 1999-2000. In fact, we have added over 70,000 jobs in the past 8 years, which more than makes up for the 35,000 jobs lost during the Great Recession.

Yes, it is very expensive to live here and traffic is horrible. However, the root cause of these two issues is a positive thing--our economy is at its pinnacle. 

Source: SJEconomy

Saturday Stats: 2017 Meta Post

It's that time of year again to look back and see the top "Saturday Stats" of 2017. The list is pretty impressive yet again. San Jose ranked as the top city for productivity, tech jobs, and economic momentum. Happiness and health are also up there. 

You can also see the full list of "Saturday Stats" (including previous years) with article links over here.

San Jose has the fastest-growing economy in California

The San Jose metro continues to grow despite already having one of the most booming economies in the US (and perhaps the world). The Center for Continuing Study of the California Economy (CCSCE) released a report last month showing that our GDP--essentially how productive each worker is--increased faster than any other region in California.

We grew our local economy by 5.9% while SF grew by 5.4%, Sacramento came in at 3% and LA at 2.1%. While this is a great indicator for jobs and salaries in the area, it also will continue to put upward pressure on housing costs. Overall this is a big win and shows that we are still on an upward trajectory.

Oh, and there was also a random fun fact in the report. If the Bay Area was a country (not Califonia, but just the 9-county Bay Area), we would have the 18th largest economy in the world just behind Turkey and surpassing the Netherlands.

Source: SVBJ, CCSCE

Saturday Stats: San Jose has momentum

JLL released a report earlier this year stating that the San Jose metro has the strongest "momentum" in the country when it comes to the economy and commercial real estate. Momentum is comprised of 42 factors grouped into three categories--socioeconomic momentum, commercial real estate, and the region's ability to maintain momentum over the long term. Here is a deeper breakdown:

• Socioeconomic momentum
• Gross Domestic Product
• Population
• Corporate HQs
• Foreign direct investment
• Commercial real estate
• Commercial space absorption
• Construction
• Rents
• Investment in office, retail, and hotels
• Region's ability to maintain momentum over the long term

After everything was computed, the San Jose metro was by far the leader in the report. Austin came in second and San Francisco did not even place in the top 10 (it was #21).

Source: SVBJ

San Jose was ranked as the most productive area in the US

This one is way to good to go in the Saturday Stat bin. According to The Brookings Institution, the San Jose Metro is the most productive in the whole country. Our economic output per employee is an epic $173,971 per year. This compares to $156,812 in Houston and $152,562 in the San Francisco metro. It is also one of the many reasons why many jobs in the Valley command such high salaries.

What is just as impressive is the rate of growth that labor productivity improved in San Jose versus every other metro in the country. Between 1978 and 2015, our average rate of growth is 2.72%. If you ask any economist, that is an insane rate of productivity growth--especially considering all of our bubbles and recessions. Constant innovation is now well ingrained in our culture and our bet on technology has certainly paid off.

Source: SJ Economy News

Saturday Stats: 2016 Meta Post!

It's that time of year again to look back and see the top "Saturday Stats" of 2016. The list is yet again quite impressive. San Jose ranked as the top city for salaries, jobs, life expectancy, and economy. Even Trick-or-Treating got a shout-out this year. Below are my favorite rankings for the year.

You can also see the full list of "Saturday Stats" (including previous years) with article links over here.

Rank

Stat

Source

Year

Notes

#1	Longest Life Expectancy in the US	SVBJ	2016
#10	Best Place to Live	US News & World Report	2016	SF #9
#1	Fastest Growing Private Economies	Headlight Data	2016	SF and NY not in top 10
#2	Best City for Young Professionals	Forbes	2016	SF #1
#10	Best Place to Live	U.S. News	2016	SF #9
#3	Best Places for STEM Grads	Nerdwallet	2016	SF #6
#1	City for Jobs	Glassdoor	2016	SF #2
#2	Best City for Jobs	Forbes	2016	SF #1
#1	Top City for Small Business	CNBC	2016	NY #2, SF #3
#3	Best Metro for Entrepreneurship Growth	Kauffman	2016	SF #6
#2	Healthiest City in America	24/7 Wall St.	2016	SF #14
#3	Most Educated City in the US	WalletHub	2016	SF #7
#1	Fastest Growing Economy in the US	CNBC	2016	SF #5, NY #23
#1	Best City to Trick-or-Treat In	Zillow	2016	SF #3
#1	Best City for Web Developers	Zippia	2016	SF #5
#1	Best Performing City in the US	Milken Institute	2016	SF #3

San Jose Metro unemployment is holding below 4%

For the second straight month, unemployment in Silicon Valley has stayed under that magical 4% threshold. It did tick up a tenth of a point from 3.8% in September to 3.9% in October. California is at 5.3% unemployment while the nation is averaging 4.7%. So the net of it is that the nation as a whole is doing quite well, but San Jose is in an exceptional position when it comes to jobs. The rate is even more impressive when you consider we have the highest paying jobs for any large city in the country, if not the world. Now let's find a way to fix those potholes.

Source: SVBJ

San Jose Metro led the nation in economic growth for 2015!

Out of the 382 metros tracked by the Bureau of Economic Analysis, only 292 saw their economies grow in 2015. Of the 20 largest metros, guess which had the most growth.

The San Jose Metro grew its economy by an incredible 8.9% last year. This is miles away from the next city which is Houston at 4.6%. For all the buzz San Francisco got, they grew their economy by 4.1% last year, less than half of San Jose and putting them fifth on the list. New York barely made a dent at 1.7%.

What is even more impressive is that if you look at ALL 382 metros, including the smaller ones where it is easier to have big economic swings, San Jose still had the 2nd fastest growing economy in the US. Only Midland, TX with a population of 140k had a faster rate of growth.

The bubble chart below the grid shows economic performance versus the size of the metro (larger bubble = more population). San Jose is still performing like a fast-growing startup (hot small city) despite the fact the metro has 2 million people.

To paraphrase a Twain quote: the reports of Silicon Valley's death are greatly exaggerated. Every economy in the US would love to be where San Jose is today.

Source: CNBC, Hillrise from the San Jose Development Forum

Chamber announces Silicon Valley IDEA (Initiative to Drive Economic Advancement)

The San Jose Silicon Valley Chamber of Commerce announced a new initiative a couple weeks
ago to strengthen the Chamber’s regional economic development efforts. This includes a regional branding initiative and creating a shared voice for local businesses to identify and address issues related to regional business operations and quality of life.

The goal is to help maintain Silicon Valley's role as the world's top innovation powerhouse and market our area as such to the rest of the globe. Below are five short videos that introduce 'silicon valley IDEA.'

For more information on 'silicon valley IDEA' or to become directly involved in the program, please visit: https://siliconvalleyidea.org

Air China is coming to San Jose International!

SJC is on fire when it comes to landing new international routes. In 2012, ANA announced their nonstop to Tokyo. Then 2013 and 2014 came and went without any additional big news. The floodgates opened January of last year when Hainan announced a nonstop to Beijing. That was followed by British Airways announcing a direct flight to London in September. Then SJC scored a surprise hat trick the following month when Lufthansa revealed a flight to Frankfurt. In November, Air Canada announced they are returning to San Jose with a twice-daily nonstop flight to Vancouver. 

While 2015 was incredible, 2016 has been off to a slow start. That all changed last week when Air China officially got the green light to launch flights between San Jose and Shanghai. The direct flight will take to the skies three times per week on an Airbus A330, bringing two of the most innovative cities in the world closer together.

Shanghai will be San Jose's 8th international route (Guadalajara, Cabo San Lucas, Tokyo, Beijing, London, Frankfurt, and Vancouver are the others). This ties us with Oakland International in terms of international routes. However, Oakland's flight to the Azores is seasonal (summer-only and it requires a refueling stop) and five of its international routes are in Mexico. If we look at unique countries, San Jose is up 6 to 4.

Source: The Merc

Saturday Stats: San Jose metro has the best job growth in 2015

Private sector jobs in the San Jose area grew by a staggering 4.8% last year. That is enough to beat out every other metro in the United States by a significant margin. Texas usually dominates these rankings, but Austin came in second with 4.4% growth in 2015. San Francisco and New York did not make the top 10. The only other California metro on the list is Riverside at #7.

Average private sector job growth for the nation is 2.3%, meaning San Jose grew its job market at more than double the national rate. I hope the growth can continue for a at least another year or two. The tech market is beginning to cool a bit, but there is still huge potential for job growth in the area.

Source: SVBJ, Headlight Data

Robots Less Likely to Replace San Jose Jobs

There have been several reports floating around claiming that robots are going to make a large number of jobs obsolete. The unfortunate reality is that those reports are likely correct. However, there is a silver lining.

San Jose will feel less of an impact on the robot uprising than other cities. Why is that? Skilled labor is the least likely to be replaced in the immediate future, and that is exactly where most of San Jose's jobs lie. A secondary, almost ironic reason is that San Jose area companies are most likely to be the ones designing and developing robot hardware and software. In this context, our region might end up becoming one of the largest beneficiaries of these upcoming changes.

Source: SVBJ

Robot at Orchard Supply in San Jose

Saturday Stats: 2015 Meta Post!

It's that time of year again to look back and see the top "Saturday Stats" of 2015. The list is yet again quite impressive. San Jose ranked as the top city for salaries (both before and after cost of living adjustments), tech jobs, job opportunities, job market, advanced industry sector employment, tech hub innovation, college students, and have the most future-ready economy in the US. Those were just the #1 rankings. There are many more below.

You can also see the full list of "Saturday Stats" (including previous years) with article links over here.

Rank	Stat	Source	Year	Notes
#1-10	Top 10 Happiest Cities in the World	National Geographic	2015	SF and NY did not rank
#13	Best City to Find a Job	WalletHub	2015	SF #20, NY #90
#7	Healthiest Place in America	NerdWallet	2015	SF #2, NY #15
#3	Highest GDP Per Capita in the World	SiliconBeat	2015	SF #12
#1	Advanced Industry Sector Employment	SiliconBeat	2015	SF #5
#1	Most Innovative Tech Hub in the US	NerdWallet	2015	SF #3
#6	Most Racially and Linguistically Diverse City in the US	WalletHub	2015	NY #4, SF #13, Oakland #14
#1	Best Place for Tech Jobs	Nerdwallet	2015	SF #6, NY #67
#1	Top Metro for Job Opportunities	Glassdoor	2015
#1	Hottest Job Market	SiliconBeat	2015	SF #2
#3	Best City to Raise a Family In	Healthline	2015	SF #9
#7	Economic Growth between 2008 and 2014	WalletHub	2015	SF #15, Oakland #13
#2	Best City to Trick-or-treat In	Zillow	2015	SF #1
#1	Highest Salary after Cost of Living Adjustments	SVBJ	2015	SF #9
#1	Future-ready City Economy America	Dell	2015	SF #2, NY #3
#1	"Richest City" in America (Greatest Gross Metropolitan Product [GMP])	Bloomberg	2015	SF #3, NY #8
#1	Best Mid-sized Region for College Students	American Institute for Economic Research	2015
#7	Best Place to Own a Home	Porch	2015	SF #47, NY #26

Air Canada is Returning to San Jose!!!

SJC is on a tear when it comes to landing new international routes this year. Five years ago, San Jose International Airport was barely earning the right to use the word "International." The only routes outside the US were to Mexico. Then in 2012, ANA announced their nonstop to Tokyo. While that was a significant milestone, 2013 and 2014 came and went without any additional big news. Then the floodgates opened this January when Hainan announced a nonstop to Beijing. That was followed by British Airways announcing a direct flight to London in September. If that wasn't enough, SJC scored a surprise hat trick the following month when Lufthansa revealed a flight to Frankfurt. What a year for the airport, how could it get any better? Well it just has.

Air Canada just announced they are returning to San Jose with a twice-daily nonstop flight to Vancouver! The airline ceased operations at SJC shortly after 9/11 fourteen years ago. It's great to have them back.

The route will use a Bombardier CRJ705 regional jet. It is a smaller plane than what is used on San Jose's other international routes, but the flight is only two hours and 15 minutes long. It also means there are no middle seats (see second image below). The plane will have 65 coach seats and 10 business class seats. Every single one of them will have a personal video screen and a USB port. 

Air Canada flights will leave San Jose at 7:30am and 1:25pm seven days a week starting on May 9th. Flights will return home from Vancouver at 10:35am and 5:15pm. You can already book flights today.

This will become San Jose's 7th international route (Guadalajara, Cabo San Lucas, Tokyo, Beijing, London, and Frankfurt are the others). 

Source: SVBJ