Prop 23 Update: Silicon Valley will not save CA economy

Russ Steele

Do you remember the Prop 23 debate when our local left defended AB-32, and assured Nevada County voters that Silicon Valley would lead us out of our economic recession. Here is a reality check from Joel Kotkin’s in NewGeography: SILICON VALLEY CAN NO LONGER SAVE CALIFORNIA — OR THE U.S.

 “Silicon Valley’s job creation numbers are dismal. In 1999 the San Jose-Sunnyvale-Santa Clara area had over 1 million jobs; by 2010 that number shrank by nearly 150,000. Although since 2007 and early 2010 the number of information jobs has increased substantially — up roughly 5000 to a total of 46,000 — the industrial sector, which still employs almost four times as many people as IT, lost around 12,000. Overall the region’s unemployment stands at 10%, well above the national average of 9.1%.

This is partly because Apple, Intel and Hewlett-Packard have shifted their production — which offered jobs to many lower- and medium-skilled Californians — to other states or overseas. With its focus just at the highest end, the Valley no longer represents the economically diverse region of the 1970s and 1980s. Indeed, it increasingly resembles Wall Street — with a few highly skilled employees and well-placed investors making out swimmingly.”

“Silicon Valley has become hyper-efficient; the region doesn’t create jobs anymore,” says Tamara Carleton, a locally based fellow at the Foundation for Enterprise Development. “In terms of revenue per employee, Facebook’s ratio is unprecedented. Even Apple hasn’t grown significantly this last decade, despite the successful launch of many products and services. While commendable, greater efficiency doesn’t put more jobs in the California economy.”

So, if Silicon Valley is no longer up to the challenge, how do we get out the economic hole our Democratic Legislature, former RINO Governor and Governor Brown have created?  I recommend killing AB32 and then adopt the North Dakota model, “drill baby, drill.”

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About Russ Steele
Freelance writer and climate change blogger. Russ spent twenty years in the Air Force as a navigator specializing in electronics warfare and digital systems. After his service he was employed for sixteen years as concept developer for TRW, an aerospace and automotive company, and then was CEO of a non-profit Internet provider for 18 months. Russ's articles have appeared in Comstock's Business, Capitol Journal, Trailer Life, Monitoring Times, and Idaho Magazine.

One Response to Prop 23 Update: Silicon Valley will not save CA economy

  1. gjrebane says:

    Adding to this is Steve Malaga’s piece in the 15oct11 WSJ about ‘How California Drives Away Jobs and Business’. It seems that there are still some high-tech companies started in Silicon Valley because of their proximity to Sand Hill Road VCs, but these outfits don’t create many jobs or revenues for the state. As soon as they begin expanding, the expansions are located in other states, and not the business hell hole that California has become.

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