Monday, January 29, 2007

Silicon Valley is rebooting

Wall Street Journal published an article based on a report by Joint Venture Silicon Valley, nonprofit group in California.

Conclusion of the report: Silicon Valley's nascent economic recovery gathered steam last year, with the nation's technology capital adding more than 30,000 jobs and showing gains in areas such as average annual wages and household income.

Doug Henton, a co-author of the report, says Silicon Valley is undergoing a structural shift in which lower-skilled jobs are moving out of the area to be replaced by jobs requiring higher skills such as design and specialties in certain technologies.

The report comes as Silicon Valley, which prospered during the dot-com frenzy in the late 1990s, has struggled to remake itself in the wake of the tech crash in 2000. In the years since, the region has experienced job losses and a slowdown in growth at many tech companies. The area began to turn the corner in 2005 when a net gain of 2,000 jobs was recorded, the first time since 2001 that there had been an overall increase in jobs. Start-up activity has also become widespread again, with Internet firms specializing in online video, social networking and "clean technology" springing up.

For the 12 months through the second quarter of 2006, Silicon Valley added a net total of 33,252 jobs, which translated to a 2.9% rise in jobs, according to the Joint Venture report. Meanwhile, the region's unemployment rate declined last year to about 4% from nearly 5% in 2005 and down from a peak of nearly 8% in 2002. Many tech companies, from start-ups to larger companies, have recently complained that it has been difficult to hire and fill open jobs. Wow… That’s nice…for a change!

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