The high cost of innovation
Silicon Valley continues to lead the country in innovation, according to the latest update to the Silicon Valley Leadership Group’s comprehensive report on regional competitiveness and innovation. But our regional challenges — especially in housing, transportation and education — are quickly catching up with us.
In partnership with the Silicon Valley Community Foundation, the Silicon Valley Leadership Group measures important indicators like migration, transportation and business costs to assess how the region of Santa Clara, San Mateo and San Francisco counties is doing at providing jobs and opportunities. This year’s just-released report, which looks at 2016, contains more than a few surprises for anyone who cares about the region’s future.
In some ways, the region is doing better than ever — but fewer and fewer people are able to enjoy it.
Silicon Valley’s “innovation industries” (a category that includes software, biotechnology, aerospace and similar technology-enabled fields) continued to do better than everywhere else in the country in 2016, posting a whopping 5 percent growth over 2015.
But an average of 42 people left Silicon Valley every month in 2016. That’s a huge change from 2015, when an average of nearly 2,000 people were moving in every month.
“The number of people who left increased dramatically,” said Brian Brennan, senior vice president of the Silicon Valley Leadership Group. “The dynamics that drive those decisions have been around for a while, but we saw a really big shift in 2016.”
The “dynamics” to which Brennan refers won’t be news to anyone who lives here.
“The single biggest takeaway for policymakers is that we really need radical action when it comes to the production of housing,” Brennan said.
Brennan cited SB35, state Sen. Scott Wiener’s (D-San Francisco) 2017 legislation that forces local governments to speed up affordable housing production, as an example of the kind of big changes California needs.
The region also needs to make traffic more manageable — preferably through sustained investments in mass transit. Commute times, which are a crucial factor both for business productivity and residents’ quality of life, keep increasing year over year.
Finally, the region has to focus on providing future opportunities for its young people through education.
The 2018 update found that Silicon Valley area students have made slight gains during key developmental points in their K-12 education. In 2017, 55.1 percent of local third graders were proficient in language arts, up from 51.7 percent in 2015. Eighth-graders were doing better in math, too — 53.3 percent were proficient in 2017, compared to 49.4 percent in 2015.
“It’s wonderful to see this positive trend in our educational system,” Brennan said. “But we’re still leaving too many students, especially African American and Latino students, behind.”
As the report makes clear, the region still has a lot to offer its residents in terms of cutting-edge opportunity and economic dynamism. But if our policymakers can’t get costs and congestion under control, only a select few will be able to reap the benefits.