In a Forbes article about the best cities for tech jobs by Joel Kotkin in Forbes an interesting pair of numbers jumped out: Silicon Valley peaked in its number of tech jobs in 1997.
Equally critical, it seems clear that simply being a high-tech magnet does not make a region a prodigious job creator. The San Jose metropolitan area, better known as the heart of Silicon Valley, boasted over 960,000 jobs in 1997. Last year, even after the ballyhooed Version 2.0 of the dot-com boom, that number had actually declined--to barely 900,000. According to figures from economic-strategy firm Praxis Strategy Group, other traditionally tech-heavy areas, including San Francisco and Boston, also did poorly in terms of growth through the balance of this decade.
The article provides a list of cities which have experienced high percentage growth in tech jobs since 2000. Most of the high percentage growth cities have low absolute numbers of tech jobs. But a few (e.g. Seattle, Orlando Florida) stand out as having a lot in total terms, though still far smaller than Silicon Valley.
My impression is that the internet is reducing the value for a firm to co-location near other firms in the related lines of business. Also, companies increasingly use labor in lower cost areas (e.g. India) to do many projects or parts of projects. So a company can be headquartered in Silicon Valley while having a larger percentage of its work force elsewhere.
Granted, there are still advantages to a place like Silicon Valley, most notably in the form of a labor pool that has lots of specialists when the need arises. But while the advantages of the place are substantial they aren't as big as they used to be. At the same time, California's problems are weighing on the Valley.
|Share |||By Randall Parker at 2009 July 11 11:56 PM Economics Labor|