Silicon Valley Still a Force

How has the fall and subsequent realignment of the dot.com segment changed the technology landscape? Is Silicon Valley still king?

By Chris Alfe, Thingamajob Staff Writer

Silicon Valley - Still Breathing

Silicon Valley is far from dead, but it is grieving a bit. Although still the entrepreneurial leader and technological epicenter in the U.S, the valley suffered through the recession in early part of the decade, and of course was hit by the collapse of the dot.com bubble.

Silicon Valley, the region located south of San Francisco in Northern California, was considered invincible in 2000. Surrounding the San Francisco Bay and including the city of San Jose with over 900,000 residents, as well as Santa Clara, Sunnyvale, Palo Alto and other mid-sized cities, it was far and away the place to be to gain venture capital and public buzz as a technology firm.

Businesses there wrote their own rules. Not wanting to be stifled by the traditional business models and values of the old economy that operated in cities like New York, Chicago, Boston and Philadelphia, they redefined business culture from the ground up. Money and ideas flowed, and national intrigue soon followed.

Today, with a stiff hangover and egg on its face, as well as some empty parking spaces in front of its buildings, the Valley has reinvented itself as a more responsible and practical place.

It hasn't been easy. Just when tens of thousands of dot.com job losses wotrked their way through the market, Silicon Valley was slammed again by the nearly 200,000 telecom job cuts in 2002 and 2003.. Plus the IPO market, once a terrific source of funds for fledging Valley firms, has dried up almost completely since September 11th.

So does Silicon Valley have reason to be optimistic among such dismal news?

Absolutely.

Silicon Valley will likely never again enjoy the status it once had as the only place to be to conduct cutting edge commerce. Dallas, Boston, Washington D.C, New Jersey and others have emerged as strong contenders. Yet, the Valley is still a force to be reckoned with thanks to some strong underlying factors:

* It's wired. The San Jose metropolitan area ranks #1 in overall Internet penetration (Internet use per resident), and boasts the third largest Internet population overall, higher than Chicago, Boston and Washington D.C. Plus, the commercial properties are already wired for high speed media, giving them an advantage over upstart regions.

* It's young and wealthy. The median age in San Jose is under 35, and the median household income was nearly $80,000 a year in 2004. This is the perfect demographic formula for upstart businesses like tech firms.

* It works. The San Jose area ranks as the third most productive city in America, as judged by the Spirit Study, a comprehensive productivity study of all major metropolitan areas. Only Dallas and the Valley's neighbor to the north, San Francisco, rank higher.

* It's educated. Almost half of all San Jose area residents hold a bachelor's degree, the highest percentage of any area in the nation.

Thanks to a solid infrastructure, desirable climate and motivated population, Silicon Valley is down but by no means out. No one should be surprised when this phoenix rises again; it's well poised for a comeback.

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