By John Melville
As we stated last year, The Silicon Valley Competitiveness and Innovation Project (SVCIP) focuses on a subset of industries in the regional economy that are important export-oriented sectors with positive ripple effects on other parts of the economy. We call them “innovation industries” because innovation is their shared core business. While their products and services vary widely—from software to hardware, internet-based services to biotechnology, and many more—what they also share is a core need to operate in a supportive community environment, including talent, financing, and other resources. They directly account for 26% of the jobs in Silicon Valley, and their success is an important measure of how well Silicon Valley and other regions are providing an effective “innovation ecosystem.”
We hear a lot about competition for jobs, and how innovation industries are thriving in other regions like Seattle and Austin. What we find is that innovation is not a zero-sum game. Many regions can and do participate and thrive in the innovation economy. As the chart below shows, Silicon Valley and all the comparison regions continued to grow their innovation industries in 2016.
There has been a slight deceleration of growth in the innovation economy in Silicon Valley between 2015 and 2016. However, as the chart below shows, all of the specific industry sectors that comprise the innovation economy in the Valley continued to grow in 2016, except for medical devices. Whether the overall deceleration can be chalked up to volatility or lifted up as evidence of the beginning of a slowdown is too early to tell. What we do know is that over the long-term, despite the enduring challenges of housing, transportation, and educating a skilled workforce, Silicon Valley has continued to thrive as an innovation economy. Let us know what you think is likely to happen next.
John Melville is CEO of Collaborative Economics.