By Reuters InformationWeek
feb 3, 2007 01:45 PM
SAN JOSE, Calif. - Silicon Valley is on track to regain the 200,000 jobs lost in the Internet bust of the early 2000s but will likely see fields other than the Internet lead the way, the new mayor of the region's biggest city said Friday.
"The best days of San Jose and Silicon Valley are ahead of us," San Jose Mayor Chuck Reed told Reuters in an interview. "We are going to get the growth back but I think it's not going to be a bubble kind of growth."
"People can still remember how silly it was to pour money into a company with no product and not even a good business model," he said. "I don't think that's going to happen again."
Reed spoke after opening the State of the Valley conference, which presents an annual report on the technology-rich region's economy.
Notable in the report was the growth of 33,000 jobs in the region from the second quarter of 2005 to the second quarter of 2006, the first increase in local payrolls since 2001.
Silicon Valley will continue to add jobs as local companies aim to tackle a number of global issues through a variety of technologies, Reed said.
"It's not going to be the Internet that drives it. I think it's this convergence of multiple technologies that are going to result in products and things that deal with problems like the energy crisis, getting off of oil and finding a cure for AIDS," Reed said.
HIGH COST OF BUSINESS
Home to technology companies including Google Inc. , Hewlett-Packard Co. and Apple Inc., Silicon Valley has long been a leader in technology innovation, but its effect on the region's economy can be volatile.
"Every time we have a lull or are on our backs we think, 'Well, geez, it's never going to happen again,' but we've done it over and over again as the valley has evolved from one kind of technology to another," said Reed, whose city is the 10th largest in the United States.
"The Internet part of the boom would not have been possible without the preceding computing power and integrated circuit," said Reed. "I think there will be other things that will happen that will be as different as the Internet was from integrated circuits in terms of technologies that build on it."
But Silicon Valley faces problems as well, including a high cost of living and an expensive housing market that makes it difficult to afford to live in the region.
"Our productivity compared to the rest of the country has always been a very strong point," Reed said. "But when you chart productivity versus cost of living, we're losing our edge there, so it is something that we have to worry about."
He noted California in general is an expensive place to do business, reflected in a loss of 1,253 computer and communications hardware manufacturing jobs in Silicon Valley between the second quarters of 2005 and 2006.
"Our primary growth in the future is going to be in the brain power part of the equation," he said. "The bulk of the manufacturing is going to be done elsewhere."
By: Adam Tanner
To: Mayor Chuck Reed
From: Jobs and Economy Subcommittee, Mayor Reed Transition Committee
Date: January 8, 2007
Subject: Final Recommendations
Greg Jamison, Chair, Bill Baron. Maryles Castro, Tak Chang, Pat Dando, Rich De La Rosa, Bob Dhillon, Barry Do, Dave Fadness, Dan Hoang, Mahesh Iyer, Johnny Khamis, Mahnaz Khazen, Shirley Lewis, David Mac, Connie Martinez, Michael Mulcahy, Suzanne Salata, Mike Splinter, Yosh Uchida, Helen Wang
Restore the Pride in the City of San José:
• The City should coordinate the public relations activities of its agencies and businesses when they are promoting the City.
• The Mayor should lead a change of attitude within the City of San José. The City needs to embrace a positive customer service attitude and streamline its requirements when dealing with residents and businesses. A "customer-first" work ethic and attitude needs to be instilled in all City employees.
• The City needs to improve its customer relations. A simple "welcome" and "thank you for doing business in the City of San José" is not a hollow start.
• The City needs to remove litter and graffiti from all public facilities and right-ofways.
• "City Pride" is anchored in honest and open government, excellent customer service, a vibrant image and a great quality of life.
Transform the business climate with measurable improvements and accountability
• The permitting process needs to be evaluated and measured. We need to know how long it takes for different types of developments to get through the process and then we need to eliminate red-tape and work on making that process faster. The permitting process also needs to be put on-line and additional technology investments should be made. The City needs to conduct a third-party audit of the permitting process to understand how long it takes for ALL types of permits to get through the process with a key goal to make the process more efficient and customer friendly.
• The Mayor needs to take a leadership role in recruiting and retaining businesses in San José.
• Communication between the Mayor and major company CEO’s is critical. Regular meetings between the Mayor and CEO’s should be hosted so the Mayor can better understand the needs of the business community and the business community can better understand the needs of the City. We need to engage these CEO’s and others to help improve the quality of life for all San José residents. Emphasizing the mantra…"it’s good for the City." Listen to the "market makers" in addition to the CEO’s.
• The business incubator program needs to be expanded.
• The Mayor needs to listen with the intent to understand the needs of the business community, share his appreciation, and articulate a vision for a better future.
• Continue to grow San José as a tourist city that has various cultural ethnic towns as a part of the visitor’s experience.
Invest in a Capital and Building Plan
• Airport service needs to be expanded and the number of direct and international flights need to be increased. Parking, taxi services and security need to be improved.
• The tent at the Convention Center needs to be replaced with a permanent structure. The Mayor must provide the leadership to improve the current facility to Class A and implement a strategy for the permanent expansion.
• San José needs to work toward acquiring an NBA team and an MLS franchise that will draw more people into downtown and help the restaurants and businesses thrive.
• The City’s infrastructure needs to be improved. Parking downtown needs to be improved and the streets and highways throughout the City are in desperate need of repair. The City also needs to improve sewage treatment plant conditions and capacity. Facility deferred maintenance programs need to be reviewed and prioritized. Residential and commercial developments need to be monitored for traffic flow and safety.
Improve Fiscal Management of the City
• The City needs to improve the cost effectiveness of City expenditures.
• Performance measures need to be instituted to measure how well the City is
meeting its goals. Once the City’s performance is measured, a baseline for
improvements will exist and must be acted upon.
• The Mayor and Council need to hire a City Manager to run the organization with
clear goals and objectives to pursue. The Mayor and City Council also need to
allow the professional City staff to do their job while challenging the City Manager
to show marked improvement over time.
Create a rolling 5-year strategic plan for San José’s future
• San José needs to have a job for every employed resident and a tax base that
supports the City’s expenses.
• The City needs to utilize technology in a superior fashion to improve permitting
services and within all areas of City governance.
• The City should coordinate the public relations activities throughout the City and
• Develop a comprehensive, rolling 5-year strategic plan that details funding and
strategy for implementation of our City’s adopted infrastructure and urban
• Integrate strategic plan for "growing jobs" into a strategic plan for the City.
• San José needs to work at reducing the loss of commerce, jobs, and the
resulting tax revenues, to neighboring cities and locations out of state. Although,
there are many factors beyond our control, global, national and state, we need to
be in control of our "own land use designations" and our own destiny. In
particular, the increase in our industrial and tax base, north, south, and
Downtown, must once again take priority in the regional balance of jobs and
housing. A San José without a good quality of life, police officers and librarians,
parks and youth workers, is a grave negative to the valley. And, of course, we
need a highway and streets system that works.