Silicon Valley hasn't experienced the same booming energy and rapid growth as the local tech economy continues to adjust to the post-pandemic reality, but researchers say the region remains a powerful innovation hub.
Although Silicon Valley is a place of enormous wealth, chronic inequalities persist. With most of the wealth and resources concentrated at the top, many residents struggle with the rising costs of housing, food and childcare.
According to the Silicon Valley Index, Silicon Valley's annual high-profile monitoring report is a collaborative effort that researches trends in the region. This year's index examines how the Valley will fare in 2023.
Chief executive Russell Hancock said the region had added nearly 8,000 jobs last year.
“We grew from 10,000 to 50,000. There were a few years where we grew to 100,000. It's clear that's not happening. We're not growing in Silicon Valley, but we're not shrinking,” Hancock said during a media call on Monday's annual report.
Hancock emphasized that he sees the cuts as a “restructuring” while tech sector layoffs have drawn attention since the pandemic last year, and said technology remains one of the region's most powerful economic pistons.
“There was strong hiring during the pandemic because it became a bonus for these companies. It actually led to hiring, so with the pandemic in the rearview mirror, these companies have been downsizing since then,” Hancock said.
The Bay Area's 20 largest tech companies will lose 7% of the region's workforce, or about 18,800 workers, by 2023. But when the dust settled, about 37,000 people worked for tech companies in the Bay Area at the end of last year, compared with pre-pandemic numbers, according to the index report.
“It's like these tech companies are reinventing efficiency as a path to profitability, and that's absolutely happening,” Hancock said.
Another indicator of a region's overall health is its population. Silicon Valley net migration began to decline in 2015, but between mid-2022 and mid-2023, the region saw nearly 1,800 more arrivals than leave. This change accounts for a 52% decrease in the net number of people moving and an approximately 37% increase in the net number of foreign migrants, the report says.
The gap in wealth and opportunity
However, a strong tech economy and overall low unemployment, an uneven playing field for opportunity and a lack of affordable housing have widened the region's wealth gaps and deepened the affordability crisis.
“There are obvious differences by race,” Hancock said.
About 30% of all Silicon Valley households in 2023 are not self-sufficient, meaning they do not earn enough money to meet their basic needs without help from the government or other informal support networks such as friends, family or faith. Social. groups.
For white households, about 22% are not self-sufficient, compared to about 50% for African American households and about 54% for African American households. Latino or Hispanic families, the report said.
With the median home sale price in Silicon Valley expected to reach $1.76 million by the end of 2023, the report estimates that 74% of first-time homebuyers in the region are “not taking” a home.
The story isn't so pretty for renters in Silicon Valley, who tend to be more “burdened” by housing costs than other areas, meaning they spend more than 30% of their gross income on rent. According to the report, about 41% of renters were burdened by 2023, and about 23% of renters spent more than half of their income on rent.
While the region's leaders promote equity initiatives, white workers hold 59% of leadership roles and 49% of technical roles at Silicon Valley's largest tech companies, while they make up only 31% of the region's total workforce. Asian workers make up 38% of technical positions at the largest tech companies and represent 1 in 5 employees.
“In stark contrast, Hispanic or Latino workers, while representing 24% of the civilian workforce, represent a disproportionately small share of 17% of employees at these same organizations,” the report states. Including Amazon, the stock falls 9%.
The share of African-American workers at the largest tech companies is 6% without Amazon and 18% with Amazon. The report notes that 18% comprise 6% of technical roles and 7% of leadership roles.
Overall, women make up 44% of the Silicon Valley workforce, but they hold only 33% of leadership positions at top tech companies.
Some have fabulous wealth
The top 10% of households in Silicon Valley own 70% of the region's wealth, the report says.
“Both income and wealth inequality have been affected by rising housing demand, with a growing proportion of ultra-high-net-worth households and the world's largest concentration of billionaires outside of New York and Hong Kong,” the report said. He says.
The total wealth in Silicon Valley, both liquid assets and real estate, is approximately $1.7 trillion. If that amount of wealth were distributed equally among all households in the region, it would contribute about $2 million to each, the index notes.
